Bulk Oil Storage and Transportation (BOST) Company Limited, a State-Owned Enterprise(SOE) , has been adjudged the beacon of corporate governance by Vice President Dr Mahamudu Bawumia for its operational excellence and strategic growth into a profitable company.
BOST, in 2017 was saddled with liabilities of $624 million, Legacy loans of GHS284 million, Bulk Distribution Companies (BDCs) claims of $37 million, and GRA Tax Liability of GHS47 million, making the company unattractive for credit lines to stay in business.
The Vice President speaking at the commissioning of the new Head Office of BOST, said 30 per cent of the company’s tanks had been decommissioned with three out of the company’s 6 depots non-operational.
“Four river barges were out of commission, the entire network of pipelines of 361km across the country were out of service and 77km of 12-inch pipes procured under US Exim facility had been detained in Huston for over 10 years as a result of a contractual dispute.
“There was a picture of a company that was being run down. To complete this chaotic picture, the BOST account had been unaudited for 3 years, making it very difficult to determine the company’s financial position and no bank was going to extend a credit loan to a company which had no audited account”, he narrated.
Dr Bawumia applauded the Board under the chairmanship of Mr Ekow Hackman for the approval of a 5-year turnaround strategy from 2020 to 2024 prepared by the management of BOST led by the Managing Director, Mr Edwin Provencal to save the company from insolvency.
He added that “the strategy between the board and management which focused on enhancing operational excellence and aggressively growing the business sought to make BOST profitable, ensure the development and effective implementation of policies fully utilised all BOST assets and automate the company’s processes and most importantly be the beacon of corporate governance in the country."
He said the implementation of the BOST strategy made it possible for the company to repair 13 out of the 15 defective tanks, all four river barges which were out of commission, all pipelines which were out of service had been repaired and the obsolete pump meters and loading machines replaced at BOST depots.
“The result has been an increase in the utilisation of BOST revenue-generated assets from 34 per cent in 2019 to its current level of 97 per cent. That is remarkable. The increase in BOST margin from 3 pesewas to 6 pesewas per litre in 2019 and subsequently to 9 pesewas per litre in 2020 has contributed significantly to the execution of these projects, ” he commended.
Commenting on the operational efficiency of BOST, Vice President Dr Bawumia noted that the company had paid $611 million with its internally generated funds, comprising about $423 million from a debt position of $624 million owed to suppliers and related parties.
“I was elated when I heard that an internal committee of BOST vetted the claims of eight BDCs for products stored with BOST, a loss from 2009 to 2014, amounting to $37 million and after the vetting, the internal committee succeeded in reducing this figure to $11 million, resulting in a saving of $26 million…This is worthy of emulation and worthy of congratulations, ”he stated.
He again stated that BOST, for the first time in 11 years made a profit of around GHS164 million, congratulating the board, management and staff for ensuring stewardship and prudent management of resources on behalf of the government and people of Ghana.
He, therefore, implored other State-Owned Enterprises to emulate BOST’s blueprint to enable them to contribute to the execution of government policies.
“Imagine if 100 State-Owned Enterprises had made a profit of GHS164 million, that will be some GHS16 billion for the nation. This only goes to show that with good leadership and a vision, state enterprises can be profitable. It only takes a few good men and women for that turnaround to happen and that is exactly what is happening at BOST, ”he said.
Dr Mahamudu Bawumia however, commissioned the $39 million new Head Office of BOST to mark the company’s 30 years historical milestone to find its permanent location.
“Today marks a significant milestone in the 30 years history of BOST, having transitioned from Diamond House through Heritage Towers to Roman Ridge, Airport Residential and Dzorwulu; finally, the company has found its permanent location, ”he said.
The building was conceived around 2015 as part of plans to ensure that BOST staff work in a conducive environment.
On 15th June 2015, BOST engaged a construction company to design, build and finance the construction of a new Head Office building, 7-storey twin blocks at a total cost of $39 million, exclusive of VAT and all taxes.
The building was to be completed in 24 months. This project which has transitioned from the previous government to this government has been bedevilled with many challenges.
Between 2016 and 2022, the project underwent a value-for-money audit, an EOCO audit, a re-evaluation by an independent valuer, PPA ratification and a valuation for the updated scope. But notwithstanding all these challenges, the building has finally been completed and commissioned.