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GPHA works on funding for ports infrastructure

The Ghana Ports and Harbours Authority (GPHA) is working on a legislation which will outline the modalities for funding port infrastructure.

This follows recommendations from a committee that was set up to come out with how to fund port infrastructure projects in the country.

The move, according to the acting Director General of GPHA, Mr Paul Asare Ansah, is geared towards ensuring local participation in the development and operation of port facilities.

Presently, the sector is highly controlled by foreign entities, a situation Mr Ansah described as “pricing off local nationals in the development, operations and management chain.”

That, he said, had as well seen financing bodies in the area of port infrastructure development enforcing strict rules (conditionalities) which went to totally exclude local participation.

Mr Ansah made this known when members of the Parliamentary Select Committee on Transport visited the Tema Port last week to keep themselves abreast of operations in the port.

The committee, led by its Chairman, Mr Samuel Ayeh-Paye, also included the Vice Chairman, Mr Kofi Brako, and the ranking member, Mr Kwame Agbodza.

The team was taken on a tour of the Tema Port expansion project site as well as the Tema Shipyard, where they expressed worry at the sorry state of the facility.

New developments

Mr Ansah mentioned a recent development within the sector where a transactional advisor appointed by the World Bank on the development of a multi-purpose container terminal at the Takoradi Port excluded the participation of local companies as it set a high threshold.

The threshold, he said, required that a local company must have an experience in handling some 250,000 Twenty Footer Equivalent Units (TEUs), whereas a local entity seeking to participate in the operation of a bulk port ought to have handled three million tonnes.

“Obviously, there is no Ghanaian operator that has had the experience of 250,000 TEUs, thus going by the criteria, they do not qualify, and we at GPHA felt it was not right for Ghanaians to be priced out of the sector which is heavily controlled by foreign entities,” Mr Ansah indicated.

Following the transactional advisor’s report, which clearly outline conditionality’s indigenous companies must met if they want to participate in new developments within the sector, the GPHA, Mr Ansah said, truncated the Takoradi Port development funding arrangement with the World Bank on the advice of the Public Procurement Authority (PPA).

“When we found out that a local company, Ibistek Ghana, had the needed capacity to raise funding to develop and operate a multi-purpose container terminal at Takoradi Port, we felt this is an opportunity to ensure the inclusiveness of local entities,” he said.

Funding

He suggested that whereas the GPHA appreciated the assistance of the World Bank in providing a guidance for port development in Ghana over the years, “we will appreciate and expect that the bank would create equal opportunities for both Ghanaians and non-Ghanaians”.

Mr Ansah pointed out that whereas port funding was capital intensive, officials had realise that the conditionality that came with the insurance premium as part of security were often not favourable.

The cost of borrowing, he said, was becoming higher, while crediting countries often would always want to ensure that the bulk of the expenditure in terms of what goes into the award of contracts would always return to the crediting.

Port Fund

The introduction of the port development fund was to provide a sustainable means of financing port infrastructure and modernisation.

“You will realise that not all areas that require investment are attractive to foreign investors, so our goal is to identify alternative sources of funding that will also ensure respectable equity shareholding across board,” Mr Ansah stressed.

“Presently, we are in contention with the Meridian Port Services (MPS) which requires that the port authority makes some financial commitment to perfect the equity shareholding for which we are holding discussions,” he added.

MPS

The Chief Executive Officer (CEO) of MPS, Mr Mohammed Samara, indicated that work on the port expansion was about 40 per cent complete.

He said officials had so far reclaimed some 100,000 hectares of land from the sea, while platforms were also being laid to hold the multipurpose gantry cranes that would be fitted at the facility for container movement.

Mr Samara said the existing port would reach its saturation period by 2020 and may not be able to receive bigger vessels; hence, the need for the expansion.

He told the delegation that the first berth was expected to be completed by December 2019 so as to be able to receive the gantry cranes for installation.

“By the first quarter of 2020, a fully fledged new harbour of three berthing facilities will be ready for commissioning and subsequent commencement of operations in June 2020,” he said.

Committee kept in dark

For his part, Mr Ayeh-Paye commended the management of the GPHA for the various initiatives.

He, however, expressed worry that the authority had kept the committee in the dark about developments.

“Don’t wait until you need a bill to be passed into law before you approach us, rather endeavour to at all times provide adequate information to the committee so that members will be well informed on issues,” Mr Ayeh-Paye advised.
Source: Graphic Online

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