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Mahama Cuts Sod For $1.5billion Tema Port Expansion Project To Take Off

President John Mahama has commissioned the $1.5billion Tema Port expansion project which is considered as the biggest investment of the almost 70yrs history of the International Finance Corporation (IFC), a member of the World Bank Group.

The project which is expected to be completed by the 4th quarter of 2019 is being executed by the Meridian Port Services (MPS), which is a consortium of three main institutions, Bolore Africa Logistics, APM Terminal and GPHA.

The expansion is expected to increase the capacity of the port of Tema to three times its current size.

Meridian Port Services (MPS) subsequently awarded the contract for the construction of the project to the China Harbour Engineering Company (CHEC) ltd. and AECOM professional services (Ghana) ltd for the physical construction of the expansion project.

In September, the IFC announced the availability of money allocated for the 1st phase of the project.

Speaking at a ceremony in Tema to commission the project, the Director General of the Ghana Pots and Harbors Authority (GPHA), Mr. Richard Anamoo indicated in his welcome address that Ghana’s economy will continue to grow at an average 5% for few years to come and the trade volumes through the ports will likely match the GDP growth.

He said, “MPS and GPHA observed that with this level of growth maintained, the port would be saturated within three years; hence the consequent need to expand the port.”

According to him, GPHA and its partners are currently upgrading and expanding the Tema Port in response to the growing trade demands in Ghana and the sub region.

Mr. Anamoo also indicated that, when the expansion project is completed, the Tema Port will have 1.4Km qua with four deep berths equipped with sophisticated container handling gantry cranes and Terminal Operating System, since its capacity would have quadrupled and have the ability to handle some of the world’s biggest container ships, carrying up to 18,000 containers.

The President of Ghana, H. E. John Mahama who commissioned the project said, government is considering making Ghana’s Railway sector, a subsidiary of the Ghana Ports and Harbours Authority, and that it will coordinate activities in the transport sector.

He said, government is seeking to amend the current legislation establishing the Ghana Railway Authority and its role in facilitating the movement of goods and persons via efficient rail infrastructure.

“It is my intention to begin the process of amending our legislation covering the railway sector to create a new Ghana Railway company as a subsidiary of the Ghana Ports and Harbours Authority (GPHA),” President Mahama stated.

According to him, the port expansion project which will increase the capacity of the Tema port in the handling of cargo, will also require similar infrastructure such as roads and railway network to facilitate movements to and from the site.

He noted that although Ghana’s railway sector in the past served as a very important link between the two ports in Tema and Takoradi, the industry has been defunct for some time now over management challenges, and the development has also culminated in workers threatening several strikes over non-payment of salaries.

He is however hopeful of a revamp in the railway sector in the short to medium term as he lauded GPHA for self-financing project Meanwhile the President has highly commended the management of the GPHA for its ability to fund the expansion of the Tema port on the company’s own balance sheet.

“Government has no contribution or financial liability in respect of this project; the entire financing has been by the GPHA and its partners, Meridian Port Services (MPS),” he stressed.

The President also indicated that the completion of the Tema Port expansion project will result in government’s objective of improving Ghana’s Maritime industry, and will attract other maritime services from across the sub region.

“The Authority will be responsible for the navigation of vessels, pilotage, stowage and overall security of the container terminal. Unlike the past that the GPHA used to depend on government subvention and sovereign guarantees, the Authority has overtime developed the financial muscle to contract loans on its own balance sheet to develop the relevant infrastructure and develop sustain the Maritime industry.”

The project will also come with the redevelopment of the Accra Tema motorway.

The whole expansion project came about when in 2004, the government of Ghana signed a contract with Meridian Port Services Limited (MPS) to run the Tema Port in a 20-year concession agreement.

MPS is a joint venture between Ghana Ports and Harbours Authority and Meridian Port Holdings Limited, which is in turn a joint venture with Bolloré Group and APM Terminals – a subsidiary of Maersk – as the two main shareholders.

The joint venture share is comprised of Bolloré 35%; APM Terminals 35%; and Ghana Ports & Harbours Authority 30%.

As part of the concession agreement, MPS was to invest in the Tema Port, expand facilities and make it a productive national asset.

In November 2014 an initial Memorandum of Understanding was signed by MPS and the GPHA for the expansion plans.  The MoU was signed after about five months of work between MPS and the Ghanaian government representatives to complete contractual details, and finalize preparations for the project’s required design and engineering studies, according to a statement by the Bolloré group.

The expansion was intended to make the Tema Port the most preferred in West Africa and to some extent Africa. It was to expand the capacity of the port by developing four deep-water berths, a new breakwater and an access channel able to accommodate the world’s largest container ships, providing a world-class port infrastructure to support the country’s economic growth.

This was to add 3.5 million TEUs in annual throughput capacity and create 5000 additional jobs. The container throughput capacity in 2014 was about 732382 TEUs, according the GPHA’s reports.

Also, in June 2015, the GPHA and MPS signed the actual contract for the Tema Port expansion project. The contract saw the coming into effect a new 35-year concession agreement between the government of Ghana and the joint venture partners.

By: Prosper Agbenyega

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