Water bills of Ministries, Departments and Agencies (MDAs) would from this year be paid directly by the Ministry of Finance to the Ghana Water Company Limited.

The Deputy Minister of Works and Housing, Madam Theresa Ameley Tagoe said the MDAs have for some time been unable to honour their water bills to the detriment of the service provider.

She was speaking at the opening of a bidder's conference on urban water sector restructuring and private sector participation.

Over 80 participants including four multinational bidding groups with others in the water sector and the utility regulatory commission are attending.

The conference is to discuss the availability of concessionary financing and deregulation of the water sector.

Madam Tagoe said the government is committed to the Private Sector Participation (PSP) programme in the urban water sector, "since it is the only sure way of providing affordable and equitable access to safe drinking water in the urban areas throughout Ghana on financially sustainable basis."

She said the ministry would facilitate the disconnection of all consumers for non-payment of water bills, with the exception of some critical institutions, such as hospitals.

Government, Madam Tagoe said, intends to achieve the objectives by setting water rates at levels which would reflect the full cost of supplying water, including the cost of operating and maintaining assets and reasonable returns for future investment.

"We will also maintain a uniform tariff in which the rates are the same within a particular class of customers throughout the country," Madam Tagoe said.

Madam Tagoe said government was seeking support from the World Bank to address the GWCL staff rationalisation issue.

This, she said, was to ensure that private operators who would win the bid would not be overburdened with an excess labour force.

"We are determined to make the transfer of the water supply systems from GWCL to the private operators as smooth as possible."

The chairman of the Water Sector Restructuring Advisory Committee, Mr Osei Kyei Mensah-Bonsu said under the Private Sector Participation Strategy, GWCL would be transformed into an asset-holding company, which would lease "Business Units" to the operators.

The business units have been divided into two. Unit A comprises Greater Accra, Volta, Northern, Upper East and Upper West regions while Unit B covers Ashanti, Brong Ahafo, Eastern, Western and Central regions. The business units would be leased for an initial period of 25 and 10 years respectively.

Mr Osei-Bonsu said GWCL with the support of donor funding should be responsible for undertaking and financing the majority of extensions as well as planning and development of the sector.