Ghana- Burkina Faso Rail Inter-connectivity project: Conclusion on Private Investor to be determined by August 2020

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A final determination on a private investor for the 1,200km Ghana – Burkina Faso Railway Inter-connnectivity project is likely to be made latest by August this year. Skyy News has gathered that, negotiations with the private partner will commence within the speculated time when recommendations of the Committee of Eminent Person have been submitted and subsequently approved by the Heads of States of Ghana and Burkina Faso.

This, will pave way for the signing of a Public Private Partnership Agreement and Financing Closure. Should all go as planned, the project will commence the construction phase, within a period of one month.

So far, three firms/consortia have met the minimum evaluation criteria set by the Joint Evaluation Committee. They are; African Global Development Sarl / Race Consulting Engineering LP / Kalliergos O.T.M. Consulting Engineering Company S.A. / NS-A Corp / Stichting Actieve Ondernemers Begeleiding; China Railway No. 10 Engineering Group Co. Ltd. / China Railway Engineering Design and Consulting Group Company Ltd. / Strategic Initiatives Ltd.; and Frontline Capital Advisors / Mota-Engil Group / Deutsche Bahn (DB) / Siemens AG / AIIM / GIBB / Quadrante / AB & David.

However, Frontline Capital Advisors have had their operating license as a Fund Management Company withdrawn by the Securities and Exchange Commission. The question as to whether or not this will affect their further participation in the process is currently under review.

“We are seeking advice from the Attorney-General on the subject matter. We will however, not allow this to delay us unnecessarily” a report by the committee noted.

 

Background

The Governments of the Republic of Ghana and Burkina Faso, led by their respective leaders, H.E. Nana Addo Dankwa Akufo-Addo and H.E. Roch Marc Christian Kabore, during a State visit to Burkina Faso in May, 2017, agreed that railway interconnectivity between the two West African neighbours is an important factor to accelerate economic growth and development for the mutual benefit of the two nations.

Further to the decision of the Heads of States, a Joint Committee of Experts was established by a Memorandum of Understanding dated January 16, 2018, between the two States, to facilitate the implementation of the railway interconnectivity. The Joint Committee have since its establishment held twelve (12) meetings, alternating between Accra, Ouagadougou, Bolgatanga, Manga and Koudougou.

The two countries upon the recommendation of the Joint Committee of Experts, agreed on the need to engage Transaction Advisors, whose role is to assist the Governments of the Republic of Ghana and Burkina Faso to review/undertake various studies and also assist in a procurement process to engage a private sector investor(s) to develop the proposed Railway Interconnectivity Project between the Port of Tema and Ouagadougou, on a Build, Operate and Transfer (BOT) basis.

Subsequently, on 16th November, 2018, a consortium of two firms, Messrs TEAM Engineering S.p.A. of Italy and Messrs Vision Consult Limited of Ghana were engaged as the Transaction Advisors for the project after going through the procurement process under the Ghana Public Procurement Act, 2003 (Act 663) as amended.

Messrs TEAM Engineering S.p.A. developed the Ghana Railway Master Plan in 2013 and are currently reviewing the plan to expand the rail network to meet present demands and to create an efficient rail transportation that will link important mineral potentials and centres of economic development; such as, free zone enclaves and industrial parks. Messrs Vision Consult Ltd. is currently leading a consortium to undertake feasibility studies for the Central Spine Railway Line from Kumasi to Paga.

The combined expertise of the two (2) firms, who are already conversant with the proposed existing alignment and also already possess the primary data to execute the assignment, cannot be over-emphasised.

The development of the project is being carried out in the following four (4) phases:

  1. Phase 1: Feasibility Studies
  2. Phase 2: Procurement of Private Sector Partner
  3. Phase 3: Analysis of Technical Studies by Private Partner
  4. Phase 4: Construction and Supervision

Feasibility Studies

The Feasibility Studies, which commenced in December, 2018, as part of the first phase of the project development are at the final stages of completion. So far, the Transaction Advisors have submitted three (3) deliverables or reports, which have been reviewed and validated by the Joint Committee of Experts from both countries.

The Inception Report was submitted by the Transaction Advisors and was discussed and approved here in Bolgatanga on 5th April, 2019.

Subsequent to the Inception Report, the Transaction Advisors submitted a Pre-Feasibility Report, including the preliminary alignment for the proposed railway line as the second deliverable. The report was reviewed and validated by the Joint Committee of Experts on 9th October, 2019 in Manga, Burkina Faso. The alignment or route of the proposed railway line between the Port of Tema and Ouagadougou has been approved by both countries to allow for the acquisition of the right-of-way for the construction of the railway line.

Proposed Route/Alignment

The proposed route or alignment starts from Tema through Mpakadan, which is currently under construction and expected to be completed by August, 2020. The line will continue from Mpakadan and will go through Hohoe, Nkwanta, Bimbila, Yendi, Tamale, Walewale, Bolgatanga, Paga, Po, Zabre, Tenkodogo, Manga and terminate at Ouagadougou.

In line with Government policy to connect all regional capitals by rail, a connection to the capital cities of Ho, Dambai and Nalerigu will be done. A branch line will also be constructed to Sheini to provide rail access to the huge iron ore deposits that have been discovered. The total length of the line, including the branch lines is approximately 1,200km.

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