The Management of Bulk Oil Storage and Transportation Company (BOST) has described as misleading and inaccurate reports suggesting that the company has made a loss of Ghs400 million under the current Managing Director of the company, Edwin Nii Obodai Provencal.
Mr Provencal was appointed Managing Director of BOST in 2019 when most of the company’s assets were dysfunctional.
However, through resilient work and dedication, the new MD, with his team, managed to revamp most of the assets and are now working to rake in income for the company.
A couple of projects being undertaken during his tenure include rehabilitation works at the Accra Plain Depot Rehabilitation, Accra Plains Administration project, Repair of the B3P3 pipeline, Tema Akosombo Petroleum Pipeline (TAPP) refurbishment, Tema Akosombo Petroleum Pipeline (TAPP) surveillance system, construction of the Bolgatanga Bulk Road Vehicle Park, Kumasi Depot Rehabilitation works, repair of 12 out of 16 storage tanks at the Accra Plains Depot (APD), Kumasi, Buipe and Bolgatanga, Remedial works on twin 18 and repair of marine assets (barges and tugboats).
The rest are the construction of Bulk Road Vehicle (BRV) parking lot at APD, Tema-Kumasi Petroleum Pipeline-FEED, LPG FEED, supply & installation of mass flow meters, pumps and loading arms and maintenance of offloading platform at Kumasi Depot.
Although the company has, since 2016, consistently recorded losses, it was only in 2020 when the state oil stock holding company booked a profit of Gh¢9.844,673 before tax as stated by its audit report.
According to the audit report, BOST recorded a loss of Gh¢533,191,096 in 2016, Gh¢112,196,531 in 2017, Gh¢287,745,944 in 2018 and Gh¢158,478,676 in 2019.
In a statement responding to the awful impression created by the report, the management of BOST noted: “The report of the GH¢400 million losses made by BOST is not accurate. To measure the profitability and operational efficiency of a business, one must determine whether the underlying operations (core business) of the company are profitable.”
It continued that the Managing Director, in his submission at SIGA, was emphatic that the company achieved a profit before tax of GH¢9,844,673 versus an estimated GH¢30 million in 2020 as against a loss of GH¢158,478,676 in 2019.
The positive net profit before tax attained in 2020 implies a massive turnaround of the operational fortunes of the company.
The statement said: “This enhanced performance was driven by extensive operational efficiency initiatives including, but not limited to massive repair works of our storage tanks, pipelines and marine assets, replacement of outmoded parts across the facilities of the company in the last two years supported by improved marketing and customer service. In the past two years, our income-earning assets have improved from 18% to 91%.
“Any comprehensive and objective analysis of the audited statements for the past five years (2016-2020 profit before tax trend) will show a company on track to higher performance through enhanced efficiency and we look forward to capitalizing on these modest improvements to make BOST an example of a world-class state-owned enterprise.
“It remains uncontested that the debt to suppliers and related parties of $623 million has been paid down to $39 million, the debts owed the local banks of about GHS273 million have been fully cleared and our pipelines which were procured in 2011 and left to the mercy of the weather in the United States under the AT&V contract have arrived safely on our shores and we expect to complete the installation of the additional 12-inch pipeline between the Accra Plains and Akosombo depots. The cash flow position of the company is enhanced and the repair of the company’s infrastructure continues despite the reduction in our BOST Margin.
“We reiterate the fact that your company BOST is on its way to becoming a profitable state-owned enterprise and nothing will derail the resolve of management and staff to achieve this.”