Over 230 investors across the world have expressed interest in partnering the government to revamp the country’s ailing railway sector, which includes the development of new lines that could include the North-South line, conceived in the 1950s but which has been left on the drawing board.

The investors are aiming to take a stake in the country’s railway sector master plan, which the Ghana Railway Development Authority (GRDA) estimates its full implementation to cost the country about US$21.5 billion.
The amount is needed to procure new coaches, refurbish existing lines and construct additional 4,007.6 kilometers of railway lines across the country.

Because the government at the moment does not have the funds required for the full implementation of the master plan, the Chief Executive Officer of GRDA, Mr Richard Diedong Dombo, said the authority had decided to market the plan in bits to attract investors under a build, own, operate and transfer (BOOT) arrangement.

He told the GRAPHIC BUSINESS that although the authority had not yet put out any tenders or any publications inviting interests, it had received “unsolicited bids from more than 230 investors” willing to take part in the revamping of the sector.

The bids came from individuals, groups and banks across the globe, Mr Dombo said in the interview on August 3.

“The nation does not have the resources to undertake this master plan in one stretch. As a country, we cannot prioritise just the railway sector as there are other priorities such as health, education and agricultural so the railway sector gets just a slice of the national resources and this means we have to think outside the traditional funding box, which is government funding,” he stated.

He said the railway sector was one of the most capital intensive sectors and it, therefore, could not rely on state funds only.

“We are, therefore, looking at various sources of funding and these include the build, operate and transfer arrangement and that is why we are marketing the master plan to investors in bits,” he noted.

To help contain the rising investor interest in the sector, Mr Dombo said the authority was in the process of hiring a transaction advisor to help with the screening of the bids.

The advisor is also expected to guide the government in choosing suitable investors based on financial strength, technical experience and track record, among others.

Local participation

The CEO said although he was yet to go through the entire list of bids received, he had not come across any bid from a Ghanaian investor yet.

He said whether or not they received any bid from local investors, the authority would ensure that any contract that would go forward would include a local representation in the project for the purpose of technology transfer.

“The rail sector is a highly technological area and technology that we do not have as a country at the moment so in any contract that we will sign, we will ensure that there is a requirement that they use Ghanaian participation and transfer the technology to them over the period of the contract,” he stated.

Railway master plan

The railway master plan, which was completed in 2013, proposes a new railway network comprising of 4,007.6 kilometers across the country.

The master plan is expected to be completed in six phases, with the first phase being the rehabilitation of existing rail lines.

The second phase will deal with the extension of the central corridor, whiles the third phase will tackle the extension of the transversal links.

While the fourth phase will look at extending the trans-ECOWAS line, the fifth phase will aim at extending the western line.

The sixth phase is also expected to help extend the eastern line.

Tema-Akosombo railway

Mr Dombo also disclosed that work on the construction of the 85km stretch from Tema to Akosombo railway, which is in the railway master plan, would commence in October, this year.

The project, which is part of the eastern corridor multi-modal transport system, seeks to link the Tema Port to Buipe via the Volta Lake at Akosombo.

It is being executed by M/S AFCONS Infrastructure Limited of India with a US$ 398.33 million loan from the Indian Exim Bank.

The overall objective of the project is to redress the imbalance between transport modes for long distance transit and domestic freight movement from Accra/Tema northwards and vice versa.

The Minister for Railway Development, Mr Joe Ghartey, had earlier told Parliament that US$40 million had been released to the contractor to commence construction in October.

Another US$ 40 million request by the contractor was being processed in line with the contract terms, the minister added.
Credit: Graphic Business