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Business & Finance | Apr 13, 2004

Parliament approves loans for PSI and other sectors

GNA

Accra, April 13, GNA- Parliament on Tuesday by a resolution of 130 votes, approved a 300-million dollar loan for the financing of projects under the President's Special Initiatives (PSI) and the road, transport and railways sectors.

The agreement is between the government and CNT Group Holdings Limited and the CNT Construction Investment Limited, a construction and investment financing company in the United Kingdom.

The credit covers the rehabilitation of the Eastern Rail Line, road works involving the upgrading of the Achimota-Kumasi road, PSI's Garment Village and the establishment of six cassava starch companies.

Mr. Eugene Atta Agyepong, Chairman of the Finance Committee presenting the Committee's report, said the repayment of the loan covers 15 years with 0.65 per cent interest rate, adding that the loan would attract a management fee and financing cost of four per cent.

He explained that fifty million dollars out of the loan would cover the rehabilitation of the Eastern Rail Line with 54 million dollars going to the establishment of six cassava starch companies.

Mr. Agyepong said the committee observed that the development of the Eastern Rail line "would yield good results in terms of the freight and passenger haulage."

"It would enhance the Ghana Railway Company's capacity to haul cement, cocoa, flour and petroleum products from Tema to Kumasi and also improve the sub-urban rail systems between Accra-Tema and Accra-Nsawam." "It was further observed that the rehabilitation of the Eastern rail would facilitate the movement of commuters between Accra and Tema and reduce the road congestion in the Accra-Tema Metropolis and on the Accra-Nsawam road."

Mr. Agyepong said the cassava starch project would increase foreign exchange earnings adding that the credit would assist in the establishment of a garment village, which would involve the construction of 120 factory units to be leased out to garment and textile manufacturers.

On road construction, portion of the credit facility would go in for the Accra-Kumasi road and the project, aims at constructing the entire road into a two-lane dual carriageway to provide better services for travellers along the corridor.

Mr. Moses Asaga, Minority Spokesperson on Finance, in his contribution, said the national debt was rising with the total external debt currently standing at 70 trillion cedis.

He therefore asked for circumspection in contracting loans. Mr. John Mahama, NDC- Bole-Bamboi, questioned the rationale for investing in cassava and starch since the world starch market was weak and incomes were low.

"Why invest in such commodities when prices were not encouraging?" he asked.

Parliament also through 131 votes approved an amount of 10 million Euros for the delivery of Multipurpose Mini and Compact Tractors for the agriculture sector. 13 April 04

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