GPHA against $400m LONRHO ports project

By The Statesman
By The Statesman

10/19/2012 1:16:01 PM -



Information available to the New Statesman indicates that some management staff and workers of the Ghana Ports and Habours Authority are angry with the ruling National Democratic Congress government over attempts to undermine its mandate, by entering into an agreement with Lonrho Ports Limited for the development of a free port in the Western Region with the exclusive right to provide “specialised services” for the oil and gas industry.

 
According to insiders, the proposal to allow Lonrho Ports the exclusive right to develop and operate the only oil and gas service port in the country will be inimical to the interest of the nation.

 
A technical report by the GPHA on the proposal, sent to the sector minister, contends that “the intention to create and develop ports to be administered under the company name 'Lonrho Ports'...is inconsistent with our current law and maritime development strategy as a country.”

 
“The proposal further seeks to create an exclusive right to Lonrho Ports to develop oil and gas terminal facilities within the Western Region of Ghana. Unless directed otherwise, GPHA is convinced this is not the strategic objective of government even under a Private-Public-Private Partnership business venture,” the report adds.

 
They are therefore calling on President Mahama to open his eyes wide and put his foot down to prevent some few people from sacrificing the collective interest of the nation on the altar of pursuing their “narrow and short-sighted agenda.”

 
The $4000 million deal, which was said to have been stopped by the late President Mills, only to receive further impetus with the assumption of office by President Mahama, is being championed by Alhaji Collins Dauda, Minister for Transport, and Hannah Tetteh, Minister for Trade and Industry.

 
Fronting for Lonrho Ports Limited is Tommy Swanikar, local representative of Swani Motors, who is said to be a close buddy of Hannah Tetteh.

 
On August 16, 2011, the Government of Ghana signed a Memorandum of Understanding with Lonrho Ports, a 100% subsidiary of Lonrho Plc, to carry out the feasibility study for “a new, dedicated” oil services terminal in the Western Region.

 
Even though GPHA insists the plan by the NDC government to allow Lonrho Ports to operate a free port “will not be in the supreme interest of our country, either in the short or long term,” the company is said to have started mobilisation towards the project, located at Atuabo, 20 km west of Axim.

 
GPHA is particularly worried about the arrangement to allow Lonrho Ports to operate in the Tax Free Zone, which “means that all goods and services entering into that Port will be deemed not have entered Ghana and therefore will not attract tax as currently prevails in our existing ports.”

 
GPHA's technical report queried: “If the project is considered financially viable, why seek the status of a Freeport Tax Free status?”  

 
GPHA, currently operating in the Non-Tax Free Port Zone, paid GHC4million to government in 2010 as corporate tax, in addition to duty payments collected by CEPS.

 
The principal reasons advanced in support of the proposed project are the efficient vessel turn times in the Takoradi Port, increasing congestion on transport links, lack of open development land around and lack of international standard port facilities.

 
But, GPHA finds the reasons bogus. “Hon, Minister, it is regrettable that Lonrho Ports seek to justify their project proposal by making unprofessional and inaccurate submissions. Takoradi Port has been in existence since 1928 and currently has the potential to expand to provide 150 hectares of land for maritime operation at the first instance. There is no competing births, deep draft berths or sufficient operational yards in Takoradi Port. Therefore, the issue of turn round time and congestion does not exist,” the technical report states.

 
GPHA insists the right solution to the problems of Takoradi Port is the establishment of “an independent and autonomous port institution with the status of a 'Freeport' to simply create a green field to attract other private investors to develop and operate under the umbrella for the next 25 years or more. It is our humble opinion that this solution and proposal will not be in the supreme interest of our country either in the short or long term.”

 
GPHA sums up its verdict on the project in clear, simple words: “In our opinion, the entire proposal from the Lonrho Ports is but an Estate Development Plan intended to acquire land with government support, obtain a Freeport Status for tax exemption for the next 25 years, renewal for another 25 years, restrict all others including GPHA from developing similar facilities within the geographical region and take advantage of the 'huge' potential for Ghana's growth and invite terminal operators to invest in the facility after an initial investment of US$400m on basic infrastructure...There is nothing in the report that shows that Lonrho will bring additional traffic to Ghana.”

 
Can Alhaji Collins Daudu prove the claims that the selection of Lonrho Ports Limited for the project went through competitive tender processes? Did Lonrho Ports lie to financial institutions about how it won the bid for the project?

 
Stay tuned.