18 January 2013

Ghana: $80 Million World Bank Cash Lies Fallow

For decades now, urban dwellers, especially those living in Accra, Kumasi and Takoradi have been carrying jerry cans, which were recently christened 'Kufuor gallon', searching for water from all sources due to the scarcity of the commodity.

The World Bank (WB), apparently worried over the development, voted a whopping $153 million in 2004 to help the government of Ghana solve the problem and make water available all year round to the people.

Unfortunately, due to administration bottlenecks, only $73 million, out of the budgeted $153 million has been disbursed since 2005, when the first tranche of the money was released. Information pieced together by The Chronicle indicates that the government, realising that the pipes carrying treated water to various homes in the cities were inadequate, whilst the existing ones were rusty, approached the WB for assistance to lay new pipes and also replace the outdated ones in the system.

The bank agreed to the proposal, and on July 27, 2004, approved US$153 million to execute the project. Per the agreement, the project should be executed within six years, with the closing date fixed at December 31, 2010.

The Project Development Objectives, according to the World Bank office in Accra, were to (i) significantly increase access to the piped water system in Ghana's urban centers, with an emphasis on improving access, affordability and service reliability to the urban poor; and

(ii) restoring long-term financial stability, viability and sustainability of the Ghana Water Company Limited.

Under the terms of the agreement, Ghana was to do all the paper work, and submit them to the bank, and if approved, the amount would be released. It was through this that the WB released $73.4 to execute aspects of the project.

The Chronicle, however, gathered that because Ghana failed to meet the strict conditions for the release of the funds, the project that should have ended in 2010, has now been extended to 2015, whilst the struggle for potable water in the urban centres continues unabated. The cost of the project has also ballooned from $153 million to $203 million.

A source at the World Bank office in Accra told The Chronicle that even though he was not holding brief for the Ghana Water Company, the implementing agency, a number of factors have contributed to the delay in the execution of the project.

According to him, the implementing agency first has to appoint a consultant to design the project, open tenders to select a suitable company or companies to execute the project, and do pre-qualification before the actual work starts. All these, he argued, takes time.

The source also noted that when the tenders for the various aspects of the project were opened, it was discovered that the contractors had quoted figures which were higher than what the World Bank was prepared to pay. The government, therefore, had to re-negotiate with the bank for an additional $50 million, which shot the cost of the project to $203 million.

He, nevertheless, partially blames the government for contributing to the delay. According to the source, the decision by the government to review the Procurement Act, meant that procurement for the project would delay.

The Ghana Water Company has already secured a loan from China to expand the Kpong Headworks to increase the capacity of the facility from the current 44 to 88 million gallons per day. The project, which is estimated to cost $273 million, is scheduled for completion in 2015.

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