THE WRONG ROUTE TO MARKET?

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The development of the new container/multipurpose terminal at the port of Takoradi, Ghana is advancing but questions remain about the process – or lack of process – which is bringing it to the market.

As of mid-October, the development of the new integrated container/multi-purpose terminal at the port of Takoradi, Ghana, was around the mid-way point.

The project is being watched with interest, not least because of the controversial process via which the development and operation of the terminal was awarded to local company IbisTek under a 25-year Build-Operate-Transfer (BOT) concession.

The award was greeted with some surprise due to IbisTek’s lack of experience in the sector. It also drew substantial criticism due to the method of IbisTek’s selection by the Ghana Ports and Harbour Authority (GP&HA), which is politely described as more “single source” than via competitive tender.

ENVISAGED ROLE AND PROGRESS

Takoradi is Ghana’s second largest port located 225 miles to the west of the capital city of Accra. Tema, situated in the east of the country and only 30 kilometres from Accra, enjoys the mantle of number one port and it is here that container handling operations have traditionally taken place. It too has recently been the subject of expansion works.

On April 30, 2020 Meridian Port Services, a joint venture company between GP&HA and Meridian Port Holdings (which is in turn a joint venture between APM Terminals and Bollore) completed, ahead of schedule, the Phase 1 works of the Tema Port Expansion Project (also known as Terminal 3 of Tema Port). The works included building and equipping a 1000m quay and a supporting extensive terminal area.

The new terminal in Takoradi – known as the Atlantic Terminal Services Container and Multipurpose Terminal - serves Ghana’s northern hinterland and the international trade of the three Sahelian landlocked economies of Burkina Faso, Mali and Niger.

Its future role is also talked of as a container transshipment hub but the jury is out on whether theory becomes reality in this respect, especially given the ever slimmer margins now involved in transshipment activity.

In 2019, the port of Takoradi handled 38 per cent of Ghana’s seaborne traffic, 75 per cent of Ghana’s seaborne exports and 17 per cent of seaborne imports., including manganese, bauxite, clinker, wheat, bulk and bagged cocoa, quicklime, containerised cargo, and equipment for the mining and oil/gas industry.

The scheduled completion date for Phase One of the terminal, providing 600m of quay, is September 2021.

LONG SHADOWS

As stated at the outset, the development of the terminal and its subsequent operation are the focus of some interest due to the non-conventional route taken to implement a Public-Private-Partnership (PPP) scheme in conjunction with it. It went something like this:

January 2017: The Director General of the GPHA – the person who had largely overseen the assembly of the Takoradi concession process – was relieved of his post by direct order of the President. No reason was given but allegations of corruption including in conjunction with both port expansion projects were made.
January 2017: Calls made by the Junior Staff Union for the government to investigate the ownership and directorships of local companies involved in terminal companies that form part of the port expansion projects.
August 2017: GPHA signs a 25-year concession agreement with local company IbisTek for the development and operation of the new Takoradi container/multi-purpose terminal. This followed a more or less exclusive focus by GPHA on IbisTek.
March 2018: Ghana’s then Minister of Finance instructed the GPHA to cancel the concession agreement with IbisTek and stated: “Thereafter GPHA – together with the Transaction Advisor – should continue the competitive procurement process….”
The above initiative was undertaken following criticism from the World Bank regarding the lack of competition associated with the tendering process for the concession.
March 2018: Ghana’s Public Procurement Agency (PPA) pushed back on the Finance Minister’s views telling the Finance Ministry to write to the World Bank and point out that the cancellation of the concession agreement would evoke severe legal consequences for the state.

IbisTek has accordingly taken the project forward. In so doing it has also made overtures to experienced international terminal operators but the feedback from this sector is that the company’s demands in the context of establishing a working relationship are totally unworkable – unrealistic.

The tendering of port projects in Africa has generally improved – there being fewer questionable deals. It is to be hoped that the route GPHA has taken with Takoradi is one that delivers effective port service and real economic benefit to the country and is not impeded by lack of experience, knowledge and any questionable arrangements that underpin such a reality.