Under-pressure Ghana cancels $2bn rail MoU for ‘breach of confidentiality’

Joe Ghartey, Ghana’s minister of railways development, says he has cancelled the MoU with the China Railway Construction Corporation Corporation (International) Nigeria Limited (CRCC-Nigeria) “for breach of confidentiality”. 

Ghana had signed an MoU with CRCC- Nigeria for the construction and rehabilitation of a 560-kilometre standard gauge railway line.

However, after a report in TheCable comparing railway contract costs in Ghana with Nigeria’s, the minister came under pressure to do “damage control”.

In a statement sent to TheCable on Monday, Ghartey acknowledged that the ministry signed an MoU with CRCC-Nigeria.

TheCable had reported that CRCC offered to rehabilitate and construct a 560-kilometre standard gauge railway line for Ghana at $2 billion, with terminals at Aflao and Elubo.

“Messrs CRCC-Nigeria expressed interest in supporting the Ministry to develop and modernise Ghana’s railway network, particularly the Trans-ECOWAS line, which runs along the coast between Aflao, on the border with Togo, and Elubo, on the border with Cote d’Ivoire,” the statement read.

“The purpose of the MoU is for CRCC-Nigeria to undertake feasibility studies through the use of independent consultants.

“CRCC-Nigeria is responsible for verifying the project cost as estimated by the feasibility studies and also raise capital to finance the project.”

However, the minister said his ministry was yet to respond to a proposal by CRCC-Nigeria to establish assembly plants for building locomotive coaches and wagons.

The ministry was, however, silent on the 340-kilometre Eastern line project that is estimated to cost $2.2 billion which will link Accra, Tema and Kumasi.

In March, Rotimi Amaechi, Nigeria’s former minister of transportation, had told reporters that the $1.5 billion allocated for the 146-kilometre Lagos-Ibadan project has been altered due to additional construction work on the project but refused to disclose the new sum.

TheCable understands that the new cost is $2 billion — which is exactly the amount CRCC-Nigeria is offering to construct and rehabilitate the 560-kilometre standard gauge railway line in Ghana.