BOST loses $5.1 million in procurement of pipelines from American firm AT&V
Bulk Oil Storage and Transportation (BOST) Company Limited is reported to have lost a contract sum of $5.1 million to American Tank and Vessel Inc. (AT&V).
Lack of proper financial planning to ensure that funds were made available for the completion of a project for which AT&V was contracted per the Auditor-Generals’ report occasioned the loss.
Per the information made available in the 2020 Auditor-General’s report, BOST, contrary to Regulation 78 of the Public Financial Management Regulations, 2019, (L I. 2378), contracted AT&V in July 2006 to supply storage tanks and pipelines and ship same to Ghana.
AT&V supplied and installed the tanks but failed to procure and ship the pipelines, forcing a team from BOST to revert to AT&V in 2018 to assess the status of the pipeline.
The team from BOST reported to management that due to the 13-year corrosion of the pipelines, the pipeline should be sandblasted and coated before they are shipped to Ghana.
The sandblasting and coating of the pipelines the report notes cost $4,430,116.84 with an additional change order of $653,254.61 and ancillary fees of $45,798.60 bringing the revised contract sum to $5,129,170.05 all of which have been paid by BOST.
“Management has since managed to complete the payment of the outstanding bill of $5,129,170.05 for the completion of the sandblasting and recoating of the pipes,” remarked the Auditor-General.
The Auditor-General however, notes that its audit team was not provided with the details and evidence of approval of the payment made.
“The audit team was not provided details and evidence of approval to the change order stated in the reconciliation with Bayou which was submitted for our review,” noted the report.
The Auditor-General adds in the report that, as at the time of audit in October 2020, the pipelines had still not been shipped to Ghana, though the intended sandblasting and coating had been done as far back as June 2019.
“Lack of proper financial planning to ensure that funds were made available for the completion of the project occasioned the loss.”
“This resulted in the loss of funds due to the inability of Management to ensure the completion of the initial contract between BOST and AT&V and the abandonment of the pipelines in Houston, USA,” stated the Auditor-General.
Adding that, BOST stands the risk of incurring another cost due to the delay in shipping the coated pipelines to Ghana.
