Identifier
Created
Classification
Origin
08ACCRA1515
2008-12-02 07:38:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Accra
Cable title:
GHANA TRANSPORTATION AND INFRASTRUCTURE HIGHLIGHTS,
how-toVZCZCXRO3618 RR RUEHLMC DE RUEHAR #1515/01 3370738 ZNR UUUUU ZZH R 020738Z DEC 08 FM AMEMBASSY ACCRA TO RUEHC/SECSTATE WASHDC 7312 INFO RUEHPC/AMEMBASSY LOME 2171 RUEHCO/AMEMBASSY COTONOU 0811 RUEHOU/AMEMBASSY OUAGADOUGOU 0552 RUEHAB/AMEMBASSY ABIDJAN 0808 RUEHUJA/AMEMBASSY ABUJA 0784 RUEHOS/AMCONSUL LAGOS 1777 RHEHAAA/WHITE HOUSE WASHDC RUEATRS/DEPT OF TREASURY WASHDC RUCPDOC/USDOC WASHDC 0660 RUEHLMC/MILLENNIUM CHALLENGE CORP
UNCLAS SECTION 01 OF 02 ACCRA 001515
WHITE HOUSE FOR USTR LAURIE-ANN AGAMA
DEPT EEB FOR USITC BRENDAN LYNCH AND MICHAEL FERRANTINO
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EAIR ELTN ELAB EWWT EINV EFIN KMCA GH
SUBJECT: GHANA TRANSPORTATION AND INFRASTRUCTURE HIGHLIGHTS,
DECEMBER 1, 2008
UNCLAS SECTION 01 OF 02 ACCRA 001515
WHITE HOUSE FOR USTR LAURIE-ANN AGAMA
DEPT EEB FOR USITC BRENDAN LYNCH AND MICHAEL FERRANTINO
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EAIR ELTN ELAB EWWT EINV EFIN KMCA GH
SUBJECT: GHANA TRANSPORTATION AND INFRASTRUCTURE HIGHLIGHTS,
DECEMBER 1, 2008
1. SUMMARY:
A. Ghana's civil aviation sector is poised for expansion, based on
the combination of increased passenger loads and the expected
increased demand for air travel associated with growth in the oil
and gas sector. An infrastructure expansion plan worth USD 122
million has been approved for three of Ghana's airports.
B. At Ghana's main international port, local stevedoring companies
blocked efforts to improve the port's efficiency, to be accomplished
by shifting additional cargo handling volume to the contracted
international consortia Meridian Port Services.
C. The Millennium Challenge Corporation Compact is financing the
14-km George W. Bush Motorway in Accra. Ghana's parliament also
approved loans to finance bridges and a municipal water system.
--------------
A. Civil Aviation: Great Expectations
--------------
2. (U) The GOG reports over 1 million passengers serviced at Kotoka
International Airport in calendar year 2007. The increase in
traffic was cited in parliament as supporting plans for expansion
and rehabilitation of airports in Kumasi, Takoradi, and Tamale.
Ghana has a total of 12 airports, seven with paved runways. Accra's
Kotoka, the largest, is Ghana's only international airport.
3. (U) Toward the goal of expanding airport facilities, a USD 122
million loan agreement was approved by parliament, from GK Airports
Company Limited, Ghana. (NOTE: although ostensibly a Ghanaian
company, the lender appears to be a joint-venture backed by a
consortium of Korean firms including Daewoo, Doosan, Rotem,
Kyungwon, and Bogomulsan. Canadian investment firm Delamore and Owl
are also shareholders. Econoffs are informed that Daewoo will be
the contractor for this work. END NOTE.) The reported terms of the
loan: 7 percent annual interest, a two-year grace period, and a 10
year repayment period.
4. (U) The expansion project includes extending the Kumasi Airport
runway from 2,320 meters to 3,000 meters, allowing it to accommodate
bigger aircraft, and to serve as a backup landing facility in the
event of an emergency at Kotoka. The loan would also finance a new
terminal building at Kumasi, including new passenger bridges, VIP
lounge, control tower, and emeregency response equipment. The
runways of the Sunyani and the Takoradi airports would also be
extended while new VIP lounges would be provided and the control
towers and fire stations refurbished.
5. (U) Like many operations in Ghana, Takoradi airport is
publicizing efforts to ready itself for expanded business associated
with the anticipated 'oil boom' in the Takoradi region. Although
unconfirmed by econoffs, the media reports that some oil companies
have received permission to use areas of the airport, and have
invested in some upgrades including compacting the ground and
grooving the asphalt extending from landing areas. Takoradi is
already hosting helicopter flights from Cote d'Ivoire and Nigeria,
ostensibly servicing the oil sector.
-------------- --------------
B. On the Waterfront: Labor Trumps Port Efficiency
-------------- --------------
6. (U) The Ghana Ports and Harbor Authority (GHPA) unsuccessfully
attempted to shift more cargo handling volume to Meridian Port
Services (MPS) at the Tema Port, away from local stevedoring
companies. Tema Port handles 70 percent of Ghana's maritime
freight. MPS is a consortia, including 30 percent ownership by
Ghana's Ports and Harbour Authority, and 70 percent owned by an
international joint venture between AP Moller Finance (Danish, 46.75
percent),Bollore (French, 46.75 percent) and Sutton Investments
(6.5 percent). In 2002 MPS was awarded a 20 year concession for the
management, stevedoring and handling of all containers at Tema.
7. (SBU) In an effort to boost port efficiency and to phase in the
full service contract agreement with MPS, the GPHA sought to
restrict the operations of stevedoring companies to serving only
ACCRA 00001515 002 OF 002
vessels with less than 50 containers, from a lesser number of
berths. Six stevedoring companies of the Ghana Association of
Stevedoring Companies (GASCO) sued the GPHA and MPS to restrain the
GPHA from implementing the MPS element of the service contract. The
stevedores argued this decision would hurt their business, since the
majority of ships berthing at Tema carry more than 50 containers.
Ghana's nine licensed stevedoring companies, (relicensed annually by
GPHA) have been in operation since 2001. GASCO claims the GPHA did
not take their existence into consideration before signing the MPS
agreement in 2002, which they complained was not awarded in a
transparent manner.
8. (SBU) In the context of quayside tensions and legal gyrations in
court, the Minister of Harbors and Railways stepped in on the side
of the domestic stevedoring companies, with an order to indefinitely
suspend GPHA's decision. According to the Special Assistant to the
Minister, the suspension was merited due to insufficient
communication of the proposed change by GPHA to the stevedoring
companies. Meanwhile, GASCO promised to continue to pursue the case
in court, despite the Ministry's request that they withdraw the
case. COMMENT: The Ministry's handling of the case suggests a
pre-election sensitivity to harming local industry and workers in
favor of an international corporation. END COMMENT.
--------------
C. Infrastructure Projects: Fits and Starts
--------------
9. (U) Roads: Work on the 14.1 km "George Walker Bush Motorway"
connecting Accra's Tetteh-Quarshie with Mallam Junction was
inaugurated on October 29 by Ghanaian President John Kufuor and
Millennium Challenge Corporation CEO John Danilovich. A
construction contract for the first six kilometers (Lot 1) was
awarded at a cost of USD 42.4 million. This contract was awarded to
the China Railway (Wuju) Corporation and is scheduled for completion
in 30 months. The Lot 2 construction contract will be awarded in
early 2009.
10. (U) Bridges: The Parliament approved a USD 42 million loan from
the New York branch of Societe General for the design, supply and
installation of permanent steel modular bridges across Ghana. This
projects aims to correct transportation problems at river crossings
caused by seasonal flooding and associated damage to roads and
bridges.
11. (U) Water Supply: A USD 92.4 million loan was approved by
parliament with the Guandong Development Bank of China and BHP
Paribas for rehabilitation and expansion of the Sunyani municipal
water system. The facility includes USD 30 million from the
Guangdong Development Bank, and USD 62.4 million from BNP Paribas;
after a 2 year grace period, the repayment term is 8 years. The
project will benefit an estimated 350,000 people through increased
access to water.
TEITELBAUM
WHITE HOUSE FOR USTR LAURIE-ANN AGAMA
DEPT EEB FOR USITC BRENDAN LYNCH AND MICHAEL FERRANTINO
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EAIR ELTN ELAB EWWT EINV EFIN KMCA GH
SUBJECT: GHANA TRANSPORTATION AND INFRASTRUCTURE HIGHLIGHTS,
DECEMBER 1, 2008
1. SUMMARY:
A. Ghana's civil aviation sector is poised for expansion, based on
the combination of increased passenger loads and the expected
increased demand for air travel associated with growth in the oil
and gas sector. An infrastructure expansion plan worth USD 122
million has been approved for three of Ghana's airports.
B. At Ghana's main international port, local stevedoring companies
blocked efforts to improve the port's efficiency, to be accomplished
by shifting additional cargo handling volume to the contracted
international consortia Meridian Port Services.
C. The Millennium Challenge Corporation Compact is financing the
14-km George W. Bush Motorway in Accra. Ghana's parliament also
approved loans to finance bridges and a municipal water system.
--------------
A. Civil Aviation: Great Expectations
--------------
2. (U) The GOG reports over 1 million passengers serviced at Kotoka
International Airport in calendar year 2007. The increase in
traffic was cited in parliament as supporting plans for expansion
and rehabilitation of airports in Kumasi, Takoradi, and Tamale.
Ghana has a total of 12 airports, seven with paved runways. Accra's
Kotoka, the largest, is Ghana's only international airport.
3. (U) Toward the goal of expanding airport facilities, a USD 122
million loan agreement was approved by parliament, from GK Airports
Company Limited, Ghana. (NOTE: although ostensibly a Ghanaian
company, the lender appears to be a joint-venture backed by a
consortium of Korean firms including Daewoo, Doosan, Rotem,
Kyungwon, and Bogomulsan. Canadian investment firm Delamore and Owl
are also shareholders. Econoffs are informed that Daewoo will be
the contractor for this work. END NOTE.) The reported terms of the
loan: 7 percent annual interest, a two-year grace period, and a 10
year repayment period.
4. (U) The expansion project includes extending the Kumasi Airport
runway from 2,320 meters to 3,000 meters, allowing it to accommodate
bigger aircraft, and to serve as a backup landing facility in the
event of an emergency at Kotoka. The loan would also finance a new
terminal building at Kumasi, including new passenger bridges, VIP
lounge, control tower, and emeregency response equipment. The
runways of the Sunyani and the Takoradi airports would also be
extended while new VIP lounges would be provided and the control
towers and fire stations refurbished.
5. (U) Like many operations in Ghana, Takoradi airport is
publicizing efforts to ready itself for expanded business associated
with the anticipated 'oil boom' in the Takoradi region. Although
unconfirmed by econoffs, the media reports that some oil companies
have received permission to use areas of the airport, and have
invested in some upgrades including compacting the ground and
grooving the asphalt extending from landing areas. Takoradi is
already hosting helicopter flights from Cote d'Ivoire and Nigeria,
ostensibly servicing the oil sector.
-------------- --------------
B. On the Waterfront: Labor Trumps Port Efficiency
-------------- --------------
6. (U) The Ghana Ports and Harbor Authority (GHPA) unsuccessfully
attempted to shift more cargo handling volume to Meridian Port
Services (MPS) at the Tema Port, away from local stevedoring
companies. Tema Port handles 70 percent of Ghana's maritime
freight. MPS is a consortia, including 30 percent ownership by
Ghana's Ports and Harbour Authority, and 70 percent owned by an
international joint venture between AP Moller Finance (Danish, 46.75
percent),Bollore (French, 46.75 percent) and Sutton Investments
(6.5 percent). In 2002 MPS was awarded a 20 year concession for the
management, stevedoring and handling of all containers at Tema.
7. (SBU) In an effort to boost port efficiency and to phase in the
full service contract agreement with MPS, the GPHA sought to
restrict the operations of stevedoring companies to serving only
ACCRA 00001515 002 OF 002
vessels with less than 50 containers, from a lesser number of
berths. Six stevedoring companies of the Ghana Association of
Stevedoring Companies (GASCO) sued the GPHA and MPS to restrain the
GPHA from implementing the MPS element of the service contract. The
stevedores argued this decision would hurt their business, since the
majority of ships berthing at Tema carry more than 50 containers.
Ghana's nine licensed stevedoring companies, (relicensed annually by
GPHA) have been in operation since 2001. GASCO claims the GPHA did
not take their existence into consideration before signing the MPS
agreement in 2002, which they complained was not awarded in a
transparent manner.
8. (SBU) In the context of quayside tensions and legal gyrations in
court, the Minister of Harbors and Railways stepped in on the side
of the domestic stevedoring companies, with an order to indefinitely
suspend GPHA's decision. According to the Special Assistant to the
Minister, the suspension was merited due to insufficient
communication of the proposed change by GPHA to the stevedoring
companies. Meanwhile, GASCO promised to continue to pursue the case
in court, despite the Ministry's request that they withdraw the
case. COMMENT: The Ministry's handling of the case suggests a
pre-election sensitivity to harming local industry and workers in
favor of an international corporation. END COMMENT.
--------------
C. Infrastructure Projects: Fits and Starts
--------------
9. (U) Roads: Work on the 14.1 km "George Walker Bush Motorway"
connecting Accra's Tetteh-Quarshie with Mallam Junction was
inaugurated on October 29 by Ghanaian President John Kufuor and
Millennium Challenge Corporation CEO John Danilovich. A
construction contract for the first six kilometers (Lot 1) was
awarded at a cost of USD 42.4 million. This contract was awarded to
the China Railway (Wuju) Corporation and is scheduled for completion
in 30 months. The Lot 2 construction contract will be awarded in
early 2009.
10. (U) Bridges: The Parliament approved a USD 42 million loan from
the New York branch of Societe General for the design, supply and
installation of permanent steel modular bridges across Ghana. This
projects aims to correct transportation problems at river crossings
caused by seasonal flooding and associated damage to roads and
bridges.
11. (U) Water Supply: A USD 92.4 million loan was approved by
parliament with the Guandong Development Bank of China and BHP
Paribas for rehabilitation and expansion of the Sunyani municipal
water system. The facility includes USD 30 million from the
Guangdong Development Bank, and USD 62.4 million from BNP Paribas;
after a 2 year grace period, the repayment term is 8 years. The
project will benefit an estimated 350,000 people through increased
access to water.
TEITELBAUM