The lease negotiation between Tema Oil Refinery (TOR) and Torentco Asset Administration Restricted (TAML) is the most effective proposal on the desk inside the brief to medium time period, Govt Director of the Institute for Power Insurance policies and Analysis, (INSTEPR) Mr Kwadwo N. Poku , has stated.
Mr Poku who can be an power knowledgeable additional acknowledged that for a refinery that’s making month-to-month losses, the BOD and authorities permitted the next proposal from Torentco, TAML can pay TOR $1.067 million month-to-month ($12.8 million yearly) to cowl month-to-month working bills (employees renumeration, taxes, statutory money owed and so on).
It can additionally pay the yearly insurance coverage of the refinery $6 million and can additional make a one-time cost of $22 million to enhance and repair the refinery, additionally $2.5 million to staff Provident Fund.
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As well as, the corporate can pay an annual ground-rent of $1 million upfront for every year and likewise will reserve 40 UScent per barrel of oil processed for upkeep of the plant (estimated at $3.2 million) in addition to assume the utility value estimated at USD $200,000 each month.”
With this proposal to lease the refinery, Mr Poku stated, TOR will nonetheless retain it’s present yearly income from GPMS dividend estimated at $9 million, Proper of approach income of $2.13 million and laboratory $663,000.
This can give TOR a complete income of $11.793 plus the above funds from TAML.
“The refinery will transfer from a loss-making firm to a internet optimistic cashflow of $14.79 million a 12 months whereas all their payments and monetary obligations absolutely paid. Over the 6-year lease interval TOR will obtain a complete cashflow of $88.7 million with all GRA , ECG, Employees renumeration, Ghana water paid. Plus the one time cost of $22.5 million earlier than the lease contract begins.
“TAML in flip will assume the duty of importing 8 million barrels of crude oil a 12 months to be refined on the refinery and the sale of the refined merchandise. Whether or not TAML makes a loss or revenue of their refining and commerce of merchandise isn’t the priority of the Authorities or TOR. This proposal was envisaged as a cease hole measure to maintain the refinery working for the subsequent 6 years whereas authorities appears to be like for a everlasting answer.
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“TAML proposed and agreed that through the 6-year lease, authorities can terminate the settlement in the event that they discover an funding proposal which is long run and higher phrases than what they proposed.
“INSTEPR is of the view that this proposal is the most effective proposal on the desk inside the brief to medium time period. The federal government has not stopped any firm from expressing curiosity and to that impact we now have sighted a letter dated 18th April 2023 from the Workplace of the President, asking the Ministry of Power and TOR to have interaction an organization referred to as Legacy Capital from Dubai.
“We all the time say we need to construct Ghanaian wealth and enterprise however the minute an organization from Ghana expresses curiosity in doing a transaction, all hell breaks free. You’ll hear ‘he’s politically related, he doesn’t have the capability, buddies with the president’s household’ and so on.
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“In the meantime, if you happen to examine the historical past and competence of all these corporations registered in Dubai, they’re empty as nicely however I suppose in Ghana we ask much less questions when it’s the white man or the Arab.
“The federal government doesn’t have the $100 million wanted to revamp TOR or sovereign assure to be given to any firm to convey crude oil to TOR. So with the present dialogue, we should as nicely shut down the refinery and all staff search for different jobs. Because the refinery stands, it has damaging cashflow so any transaction that may result in optimistic cashflow is welcoming information,” he stated in a press release on Friday, June 23.
