The managers of the Teshie Desalination Water Project have threatened to shut down operations if the Ghana Water Company Limited (GWCL) fails to pay an accumulated debt by the end of November this year.

The desalination water project is aimed at transforming seawater into potable water for Teshie-Nungua and surrounding towns.

The Public Utility Workers Union (PUWU) has indicated that GWCL’s debts exceeded GH?43 million at the end of August 2015.

The Deputy General Secretary of PUWU, Michael Nyantakyi, said the contract allows contractors to shut down the plant if GWCL fails to settle its debts.

“It is an unfortunate situation, but looking at the nature of the agreement that has been instituted, it will be in their legal right to do that and the unfortunate thing is that when the plant is working or not, GWCL will still have to pay. It is a watertight agreement, which is much in favour of the private party than the GWCL,” he said.

Responding to the issue, the communications manager of GWCL, Stanley Martey, confirmed that the water company was indebted to the contractors, but explained that they are paying in tranches.

“We are settling these payments except it is slow because of a lack of funds. We are engaging them and government is also engaging them to see the best way that the situation can be resolved.”

The company is currently producing at GH?8 per 1,000 litres of water, but is forced by the regulator, Public Utility Regulatory Commission, to sell that volume at one cedi 78 pesewas, a situation Mr Martey laments.

The main challenge that has resulted in the indebtedness, in Mr Martey’s view, is the low tariff charged, which is below the cost of production.

“I don’t think they will want to shut down the plant. They can issue threats but I don’t think they will do that,” he added.

He said the GWCL has submitted proposals for an upward tariff adjustment to enable the company operate efficiently, as they are currently running at a loss.

“We are managing the situation and have requested for an adjustment in tariff and hoping that it will be granted,” he explained to Joy FM in an interview on Friday, November 27.