Government has been tasked to initiate immediate steps to curb the Ghana National Gas Company’s (GNGC) growing debt and lack of clear accountability.
The Public Interest Accountability Committee (PIAC) has warned that, the financial sustainability of the Ghana Gas Company may be seriously compromised if nothing is done to ensure proper accountability.
PIAC, a group mandated with the oversight responsibility of monitoring and evaluating Ghana’s petroleum revenue, in its 2016 report questioned the whereabouts of more than US$40 million which was not accounted for by the Ghana Gas Company.
According to the report, the Company in 2016 paid only US$9.3 million out of receivables of US$56 million from the sale of raw gas to the state. The outstanding US$46.7 million was not accounted for.
The Technical Manager of PIAC, Mark Agyemang, is therefore asking Parliament to demand from management of the Company how the money could be traced.
On the management of petroleum revenues for the year 2016, the Ghana Gas Company’s outstanding receivable’s at the end of 2016 stood at US$456.22million with VRA alone responsible for US$434.70 representing 95% of the said amount.
The total outstanding receivable by Ghana Gas in 2016 amounted to US$203.40 added to the balance brought forward from 2015 which is US$253.42 resulted in cumulative balance of US$456.22million.
The report also stated that not only is the failure of VRA to pay for lean gas supplied threatening the viability of GNGC, it is also preventing GNGC from paying for the raw gas supplies export by GNPC.
The PIAC report also raised issues about why the Ghana National Petroleum Corporation (GNPC) was made to fund the Western Corridor roads among others.
“The 2016 allocation and utilisation shows GNPC was given GHC88.5 million which represents 38.64% for the total petroleum revenue for the year 2016. In actual fact, this is the lowest that GNPC has received since 2011 and it was able to cover only 95% of their cash requirement,” Mr Agyemang observed.
He explained that this development necessitated GNPC relying on its cash reserves to finance the additional 3% of its cash requirement.
“Notwithstanding this, there was 38% year-on-year in the staff course of GNPC from US$10.2 million in 2015 to US$16.4 million in 2016. An amount of US$12.64 million was used in refurbishing GNPC’s landed properties in Accra, Takoradi and Tema.
“An additional amount of US$7.58 million was also spent on the Western Corridor roads project and here PIAC has queried GNPC regarding the last item,” he said.
According to Chairman of (PIAC), Joseph Winful, all the organisations involved; Electricity Company of Ghana (ECG), Volta River Authority (VRA) and Ghana Gas Company are owned by the state and the authority that directs the funds has nothing to do with management.
“So if we are looking at the way we should be managing our state organisations to make them efficient then we should be looking at the management.
“I was not worried about the receivables, my worry was how much we have gotten from the oil and how we spent the money,” he bemoaned.
He suggested that government should examine the type of capacity GNPC has to buy compared to other players in the oil and gas industry to ensure there is value for money.
Contributing to the discussion, Executive Director of African Centre for Energy Policy (ACEP), Benjamin Boakye recommended that parliament becomes more efficient to forestall such development.
“The product of PIAC is going to feed into the work of parliament and parliament is supposed to extract that accountability from people who are not performing their roles.
“This will ensure that the resources are managed more prudently and efficiently,” he said.
He bemoaned the cycle of general mismanagement as government companies are dealing with themselves and there are debts that are not settled between the entities.
“If the government wants to do business, it must do business with any other entity which is responsible for its liabilities and pay or move away from doing business,” he maintained.
Source: Adnan Adams Mohammed