The Akufo-Addo Government has apparently prospected for a contractor to begin the second phase of the master plan to decongest Ghana’s cities starting with the roads in Tema by agreeing to a cut-throat loan of US$205 million which requires Ghana to repay US$ 707 million.
The first phase of the project was started by the administration of former President John Mahama.
Whatsup News has intercepted the concession agreement marked “secret” and it was sneaked into Parliament on Friday August 14, 2020 by the Ministry of Roads and Highways (MRH).The rather jaw-dropping arrangement is a Build Operate and Transfer (BOT) agreement.
Interestingly, the name of the concessionaire is not given and rather instantiated as “Proponent,” in what is suspected to be linked to government cronies and also sports what appears to be the logo of UK based international law firm, Allen and Overy.
It would be recalled that former President John Mahama had been implementing a Master Plan to ease congestion in Ghana’s cities towards the end of 2016 when the NDC lost power.
In line with this, he initiated a plan to tie the Meridian Port Services (MPS) Port expansion Project with the Reconstruction of the Accra-Tema Motorway and its interchange accessories.
MPS proposed to carry out the Motorway reconstruction as part of the Port Expansion. However, preparation for the Motorway component delayed. As a result, MPS decided to focus on its core mandate and went ahead with the port expansion project which is now completed and is in use.
The former President had secured a US$57million grant from the Japan International Cooperation Agency (JICA) for the project which was eventually commissioned by President Akufo-Addo this year. The project’s second phase is what the current government is moving to implement.
According to the secret concession agreement from the MRH, the project will cover the Ashiaman road and Ashiaman interchange which is approximately 1.3km; the Hospital Road Link junction to Rotary Avenue which is about 5.5km , the refurbishment of the Rotary Avenue Road linking the Harbor road to the roundabout with the new Tema port, which is 4km long; the Meridian Road linking Harbor Road roundabout with the new Tema Port which is approximately 4km, the beach road from the junction with Meridian Road to the crossing with the railway which is 0.6km and the Harbor road, approximately 11km.
Under the project’s life cycle cost, the project’s cost will be US$205million and this will include Capital expenditure (Capex) of US$150million. Capex is basically the cost for the materials, the tangible things that will be used for the project.
The document also states an Operation cost (Opex) of US$227.4million. Opex mainly entails costs incurred paying hired laborers, from designers, architects to day laborers.
Where it gets interesting is the amount quoted for the interest on the debt that Ghana will incur from the US$432.4 pre-financing loan. This amounts to a whopping US$191.24million.
Then there is a “Major Intervention Cost” component of US$84.5million. it is not clear if the intervention cost is cost that Ghana must pay simply because whoever is agreeing to the BOT concession agreement, agreed to undertake the project.
The secret concession agreement which only names the company which will undertake the project as the “Proponent,” states that the costs do not include any cost that the government will incur for the relocation of people who will be affected by the project.
“The project cost does not include any costs associated with the relocation and resettlement compensation of any affected properties and persons along the project area. These costs will be borne by the government of Ghana, which is customary for projects like this. The Government of Ghana will be expected to clear the right of way,” the agreement said.