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Dec 6, 2018 | Business & Finance

US646.63 Billion Sinohydro Deal Approved By Parliament

By Modern Ghana
US646.63 Billion Sinohydro Deal Approved By Parliament

Ghana is set to see a major road intervention following the approval by parliament an agreement involving an amount of US 646.63 billion between the Government of the Republic of Ghana and Sinohydro Corporation in respect of construction and rehabilitation of selected roads and interchanges in Ghana.

Parliament by a majority vote on Wednesday approved the deal.

The first phase projects, which is under Engineering, Procurement and Construction (EPC) Contract Agreement, will cover road and infrastructure projects, such as the Accra Inner City Roads, Kumasi Inner City Roads, Tamale Interchange Project, the PTC Roundabout Interchange Project, Takoradi; and the Adenta-Dodowa Dual Carriageway.

The rest are the Sunyani Inner City Roads, the Western and Cape Coast Inner City Roads, upgrading of selected feeder roads in Ashanti and Western Regions, rehabilitation of Oda-Ofaose-Abirem and Hohoe-Jasikan- Dodi Papase roads.

Engineering, Procurement and Construction (EPC) is a particular form of contracting arrangement used in some industries where the EPC Contractor is made responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the End-User or Owner.

According to a report of the Finance Committee of Parliament, the projects will be financed by Sinohydro by way of deferral of payments under the EPC Contract, with the support of refinancing by one or more financiers and export credit insurance underwritten by Sinosure (an export credit agency in the People's Republic of China).

The report states further that Sinohydro has agreed to use its best endeavours to procure such refinancing equal to 85 per cent of the cost and to finance the project upon availability whereof.

'The Government of Ghana undertakes to pay the total EPC contract price to Sinohydro, using the proceeds from the sale of refined bauxite as source for funds' and 'Sinohydro will be reimbursed the total cost of the EPC Contract by way of deferral of payments.'

By the agreement, the payments would be effected over a period of 12 years after a three year deferred period.

It is expected that the construction of the roads would enhance the movement of people and goods while reducing vehicle operating costs, travel time, accident rates, pedestrian and vehicular congestion in the cities.

---GNA

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