Joe Ghartey
Parliament yesterday approved the Supplier’s Credit Agreement between the government and Messrs Dongfang Electric International Corporation for an amount of US$243.6 million for the procurement of a standard-gauge rolling stock in line with the construction and provision of railway infrastructure for the development of the country.
The agreement was presented to the House on Monday, August 3, 2020 by the Minister of Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, on behalf of the Finance Minister, which the Speaker referred to the Finance Committee for consideration and report in pursuant to Orders 169 and 171(1) of the Standing Orders of the House.
Presenting the committee’s report, the Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, said the Ghana Railway Company Limited had rehabilitated the 56km section of the Western line from Kojokrom to Tarkwa and this had enabled the reintroduction of passenger service from Takoradi to Tarkwa in 2020 on narrow-gauge line.
According to him, the government has currently adopted a systematic approach to develop a new standard-gauge Western Railway Line from Takoradi to Kumasi, with a branch line from Dunkwa to Awaso.
In furtherance of this objective, he indicated that a contract was awarded to Messrs Amandi Holding Limited in December 2017 for the construction of a new standard-gauge line from Kojokrom to Eshiem, a distance of 5km.
“That project is currently ongoing. Subsequently in 2018, another contract was awarded for the continuation of the construction works for a further 17km standard gauge from Eshiem to Manso. The contractor is presently on site and work is ongoing,” he reported.
He said Parliament recently approved a loan facility from Deutsche Bank AG for the continuation of the construction works on some sections of the Western Railway Line from the Takoradi Port to Huni Valley on standard gauge.
“Another major ongoing railway project is the Tema-Mpakadan rail line construction which is also being done on standard gauge. It has become necessary, therefore, for the government to procure standard-gauge rolling stock to test and operationalize the standard-gauge lines being constructed as the country presently does not have any standard-gauge rolling stock,” he explained.
Purpose of the Agreement
Dr. Assibey-Yeboah disclosed that the purpose of the instant Credit Agreement is to finance the acquisition of standard-gauge rolling stock to enable the testing, commissioning and immediate operation of the new standard-gauge railway lines currently under construction in the country.
He said US$243.6 million loan has a grace period of two years and repayment period of 10 years with a 12-year tenor at an interest rate of 6M Libor + 2.5 per cent per annum, and a premium up to 7 per cent of the supplier’s credit.
Skills Transfer
He told the House that the committee was informed the acquisition of the new standard-gauge rolling stock would require training, skills and capacity development of the project staff to be able to operate and manage the new equipment. In this regard, there would be the transfer of technology from the suppliers to the local staff.
By Ernest Kofi Adu, Parliament House