Zoomlion Ghana Limited has defended its government sanitation contracts, arguing that payments received for waste collection services are inadequate and do not reflect the rising cost of operating in the waste management sector.
The company’s Head of Governmental Affairs, Ernest Morgan Acquah, said district assemblies currently pay an average of GH¢113,000 per quarter for waste collection services, an amount he described as insufficient to sustain operations.
Mr Acquah explained that the quarterly payment translates into about GH¢37,000 per month. “So an average amount of GH¢113,000 is paid per quarter,” he said.
“If you divide this by three, you are going to have thirty-seven thousand six hundred and sixty-six, so that’s roughly thirty-seven, thirty-eight thousand that is what we are paying per month,” he explained.
According to him, when the amount is calculated against the number of waste containers managed by each assembly, the payment becomes even smaller.
He said an average assembly operates about 11 waste containers, meaning the monthly payment translates into roughly GH¢3,400 per container.
Mr Acquah further argued that if each container is emptied daily over 30 days, the company receives approximately GH¢114 per lift.
“If you are lifting a container every day, you are going to have GH¢114 for lifting a container. If you rent a skip truck, how much will it cost you?” he questioned.
Responding to concerns that the cost of equipment such as trucks should be spread over their lifespan through depreciation, Mr Acquah maintained that the payment remains inadequate even when such factors are considered.
“That is why I mentioned that the amount is woefully inadequate,” he stated.
He explained that Zoomlion was previously able to manage under the old payment system because contract sums were paid as lump sums, allowing the company to use the funds as collateral to secure bank financing for operations and expansion.
“We were comfortable, and we were managing this because we were getting these amounts lump sum, so you can use that to even go to the banks for a loan,” he said.
However, he noted that the payment arrangement has since changed, with funds now being channelled through Metropolitan, Municipal and District Assemblies (MMDAs), making access to the money more challenging.
“It has been moved to the various assemblies. As we speak, the third quarter of last year has not been paid. And the money has moved from common fund to the various MMDAs,” he said.
Mr Acquah questioned how the company could use the current payment structure to secure financing from financial institutions.
“How can you take GH¢113,000 to any bank for a loan?” he asked.
He added that Zoomlion’s growth over the years had been supported by its ability to leverage government contracts to obtain financing and expand its services beyond basic waste collection.
“Zoomlion has grown because we were going for loans. We were using these lump sums and contracts to apply for other things. That is why we have moved from the normal sweeping to 360 waste management,” he stated.
