Multi-billion dollar local investment opportunity opens up

The Ministry for Railways Development in partnership with key stakeholders in the railway sector is currently working on a Ghanaian Participation Policy that aims to promote local content, indigenous labour and technology transfer as efforts to execute the various projects under the country’s ambitious railways development programme gather momentum.

Currently, in all the contracts the Ministry has signed, it has ensured at least 40 percent or more Ghanaian participation in the railway projects and the Ministry has taken steps to ensure that this provision in the contracts is adhered to by all parties. This will now form part of official state policy.

This opens huge investment opportunities up to Ghana’s indigenous private sector. For instance, the 99 kilometres Tema to Mpakadan railway project will cost around US$400 million whereas works on the 340 kilometres Eastern railway project is expected to cost around US$2.2 billion.

What this implies is that Ghanaians participating in the two projects are expected to get around US$160 million and US$880 million respectively in input supply and construction contracts if the 40 percent threshold is met. However, there are obvious doubts as to the capacity of the indigenous private sector to exploit the huge opportunities being thrown up.

However, with the coming into effect of a formal, official policy framework to support this threshold, it is expected that the level of Ghanaian participation most especially in engineering and welding will see massive improvement and this measure will largely result in technology transfer.

The framework is also expected to ensure localized labour participation which aims to benefit the people in each local area where the trains will be passing by employing them to work on that stretch of railway.

Involving the indigenes at the local level is seen as crucial in the sense they will come to see themselves as stakeholders. This will enable them be social actors rather than passive subjects, the Ministry asserts.  For instance, this would encourage them to protect their respective stretches of rail and accompanying infrastructure from encroachment or theft.

Speaking during the second railway dialogue in Accra last Wednesday to brief the public of the level of work on the Ghana-Burkina Faso railway interconnectivity, the Minister for Railway Development Joe Ghartey said his outfit is committed to encouraging participation by local citizenry.

“We have spent the last two years trying to do the impossible and now we have to locate everything we have done within a solid legal and regulatory framework to build the foundation of the sector”, he reiterated.

Dialogue

The discussion brought together stakeholders from the Ghana Railway Development Authority (GRDA), Ghana Railway Company Limited (GRCL), engineers and some technocrats to share ideas on the level of work done so far, lessons learnt as well as challenges.

A Deputy Minister for Railways Development, Andy Appiah-Kubi noted that the two countries drew inspiration from the Ethiopia-Djibouti railway line which is similar to the one currently under construction.

He said a freight train from the port city of Djibouti City in Djbouti to Addis Ababa, capital of Ethiopia, transported 70,000 tonnes of fertilizer within just 11 hours. Had it gone by road, it would have taken 75 trucks spending as much as three days. This is the kind of benefit Ghana and Burkina Faso stand to benefit after the completion of the project, he insisted.

The dialogue was organized on the topic: Developing a Greenfield Railway Project, the Example of Ghana-Burkina Interconnectivity Project: Lessons, Challenges and the Way Forward.