Expansion Plans for Ghana Ports and Harbours Authority
|Thursday, 27 June 2013 20:56|
Interview with Richard Anamoo, Director General of GPHA (Ghana Ports and Harbours Authority)
Ghana is growing tremendously and is now "an example" to Africa. Could you tell us about your vision of Ghana’s development?
Well, Ghana is my beloved country and we’ve been blessed with people who have been well-educated by virtue of the vision of our first president Dr. Kwame Nkrumah who placed education at the forefront of his administration. As a result, a lot of Ghanaians have been educated and we are now seeing the effects of that, because formal education has been spread across the country in a very unprecedented manner and people have the opportunity to train abroad. There are now a number of Ghanaians in a lot of international positions - whether it is in the UN, where we have had the Secretary General, or whether it is in the military, where we provide international services, such as in Lebanon or Chad and other countries across Africa where we send troops. This is all because of education.
So the effects of that are that people are not fanatic and this has helped us to develop and grow. We now believe it is better to talk things through. For example, in the past there has been some trouble and military intervention in the policies of that time, which made Ghana to go through several years of military regimes. Then we entered the era of Ex-President Jerry John Rawlings, who after several years came to a realisation that we needed to go back to the book and work with constitutional means.
Since 1992, there hasn’t been any violence, mainly because of the fact that people have been educated and have gone out of coup doors. Some years back, it was really easy to make a coup in Ghana, all they needed to do at the time was to go and broadcast their message, to go there with an announcement and then you were the next President. Now with the several radio stations and broadcasting stations it is very difficult to do that. So this has helped to stabilise the situation. During those military years a lot of Ghanaians left to go to the developed countries and other areas. Now they are coming back, under the new system. The advantage is that there is a lot of room to grow, to understand that the only way we can develop is to talk things through, not with military combat. Democracy has come to stay and that is the yardstick which is the compelling force.
The port is a tool that grows with the economy. You are there at the forefront of everything, of all the economic changes in Ghana. So what is you assessment of the economic development of Ghana now, and what is the way forward?
You can actually see the economy’s growth through the eyes of the seaports, because as a port planner, it is important to be ahead of the economy, because infrastructure takes a long time to develop. Unfortunately, we have been a little bit behind because the economy has grown much, much faster than the port could keep up with. So you now enter the port and you see several vessels loaded with cargo sitting outside, waiting to come in. There may be several containers and other cargo ships looking for space to store cargo in.
There are several businesses based around the port that are looking for opportunities, trucks space to park and transport their cargo. We know that the economy is certainly growing. A lot of more export cargo is on the move, and there are a lot of beans and rice containers and a lot more fruits, which are being exported through the fruits’ terminal. There are also many more imports. A few years ago we were dealing with 200,000 container units per annum. But today we are dealing with one million. And that is highly significant; we have grown something like 80% continuously for the past three years. When you come to cement, years ago we only had one cement factory, now we have an additional one. And even with all these, there is still a shortage. You can see that the economy really is growing and so from the point of view of the port, traffic is growing.
So you are lagging somewhat behind the economy. What can you do about that?
What we are doing now is embarking on the expansion of the existing ports. As a first step, we have signed contracts with two companies to expand the current port. We’ve also advertised in the papers for Expression of Interest to expand the port, where we will be reclaiming several hectares of land and constructing over 6km of breakwaters, to create more depth, creating a deeper berthing facility so that we can take in vessels drawing 16m of water i.e. trans-Atlantic vessels. We are going to deepen the port to 16m so we can take the major carriers.
All these plans are intended to take effect in the medium - long term. The long-term is to expand the port and build new ports. At the same time we will create a facility in Takoradi to cater for the oil industry, because Takoradi is much closer to the oil fields so there will be the need for some services that the port can provide. So in that light, we plan to invest millions of dollars.
In Takoradi alone we’re going to spend about 450 million dollars and in total we are looking at 800 million to 1 billion dollars. These projects once constructed, will last several years and decades to come. The issue is since the construction of the Tema port in 1962, there hasn’t been any major development by way of expansion and this is a real challenge for us now.
Development work always has its counterpart, it has an environmental and social impact, and you have the benefit of being able to see what has been done in other parts of the world and not repeating their mistakes. What are your policies regarding the environmental and social aspects?
The principal impact will be the social issue. We have several vehicles, trucks and businesses based around the port area which will have to be relocated. And then of course we also have the issue of facilities access. We need to expand the port and build new access means, because we cannot have an expanded port with no access to receive or discharge the cargo. To construct these access facilities we need access to land, and this might entail some human re-settlement and some interference with the communities around the port. However, fortunately for us, most of the expansion will be made through reclaiming land from the sea and our sea area is relatively clean: we do not have very much discharge from industry or water coming in to pollute the environment, or anything like that.
The seabed is basically rock with a small amount of sediments. So the reclamation is going to be very good and beneficial to everyone, because you are not likely to disturb any kind of environmental issue with regard to the fish, or any other social issues. In addition, the government also plans to construct eleven fish landing sites along the coastline that will reach from the far west in Axim to the far east in Keta. And these fish landing sites are more of the social benefit facilities intended to address the concerns and the challenges facing the indigenous fishermen whose livelihood is always subject to storm, breakages and strong waves. Therefore these landing sites are going to be constructed to afford the opportunity to fisher folks to handle, store, process and market the fish in a very good environment, a niche environment. Of course, in constructing this fish landing sites, some of them will be constructed in areas where there might be the need for some kind of social mitigating activities such as re-settlement or the relocation of some businesses. So these are the major challenges that we will be facing. And of course there are construction fears: there is likely to be some annoyance and other issues that may come up. In all these matters we have carried out environmental studies in accordance with the law and we will be taking care of whatever social measures that needs to be implemented to ensure that the project can be run to reflect our success.
What can international investors expect? What opportunities are there here?
The good thing for us is that a number of industries and business enterprises are looking for space inside the ports. And what we can tell them is that all this work that we are going to do is intended to clear space. As a port authority, our target is to clear the environment, to create space for vessels to come in, to create space on the land for terminal operation to take place, to create space so that goods and services can be rendered in a secure environment. So the business environment is quite good. with the Expression of Interest advertised, we received 55 applications from across the globe: from Canada, Brazil, West Africa, South Africa, to the North of Africa, the whole of Europe, Britain, Germany, the Netherlands, Greece, etc., right down to the Far East, China, India.
And these are projects that are intended to attract direct investment in the port. We are asking for financial and EPC [Engineering, Procurement and Construction] contenders who will provide the financial package as well as provide for the construction. And we have been fortunate to have received 55 very serious companies.
And among these 55 you have to select...
We are going through the selection process now.
Can you tell us a little bit more about this process?
We are currently in the first stage where we have an actual expression of interest. So we have received these 55 applications. We will then have prepared all the necessary terms of reference and all the financial and technical offer packages, and we will send them out within the next two or three weeks, and then take the 55 down to perhaps 10, then we fill them out and expect their proposals to come in. So that hopefully before the end of the year or thereabouts we should be able to bring the financial negotiations to a close.
At this stage of the process you have all the cards in your hands. You select 10 from the 55, and then start negotiations with these 10 possible ones. What are the challenges in this last stage of negotiation, when you are in front of them and then have to balance what they are asking against what you are asking? What do you have to try to defend on your side?
Well, it’s not necessary to defend, but to convince the investor that it is worth investing in Ghana. We are asking for direct capital investments. We know that we have the waters, so we can say “hey, come and give us about 700 million dollars, that we will put that into the sea and then we will guarantee that we will get revenue and pay you plus your interest over the next few years to come”. So our target would be to try and convince you that first, this is a safe environment to invest in, and second, that it is worth investing in. And that’s enough.
Most importantly, that there’s a potential for many more businesses: more jobs will be coming up, the economy will have an opportunity to grow and it is likely that there will be a lot more oil finds to the east of Ghana, right across the upper entrance down to Keta and probably in the water lakes, so the entire coast line is going to be very busy. We have rig repair facilities, dry-dock facilities. These are all opportunities that should interest any investor.
So this is a global challenge, because you are going to try to convince them not only about the port but about Ghana, to sell Ghana. And to say that the future is not only you in terms of potential, you want to show them everywhere, show them the infrastructure - not only yours, but the rest of it as well...
... and the opportunity that once we have these facilities, we will be attracting a lot more traffic into Burkina Faso, into Mali, and into Niger, into the sub-region. You go out there and see a lot of trucks: that’s our transit market there and all of them are heading to west Mali, Niger and Burkina Faso. Some few years ago we couldn’t do business with Burkina Faso. We couldn’t do business with Mali. But now we do. We have a permanent ambassador in Burkina Faso - a GPHA ambassador - our business representative in Burkina Faso, who is talking to the business community in Burkina Faso, in Mali and Niger.
We intend to expand that facility right into Niger, even though Niger is a little bit to the east and top of Ghana, but we can infiltrate that. Because everything is a question of reliability: your cargo is passing through Ghana, you can be rest assured that the cargo will get to its final destination, that you can travel throughout the night and not be dangerously concerned about what will happen to me and so on, compared to other countries.
Our shores are relatively safe, if anything goes wrong, the police is there to assist you, you can go to court, you can see GPHA, we are insured, you can do all sorts of things and our law is no respecter of citizenship we respect everyone in the same way once we are inside the country. So I think this is an environment worth investing in. And those are the things that we will be getting the private investor to understand, that there is no cause for worry.
You have a lot of convincing to do, regardless of the fact that you have good potential and are in a strong situation. What is your communications strategy for these investors?
We communicate through our marketing department, through our website and then through media like you, where you have print and radio media, where you can write and talk about us. And we also take the opportunities provided by webshops or symposiums and so on.
And what other themes can you talk to them about? Are you going to talk about more than just the economy?
Yes. We are also going to talk about the volume of traffic that will be passing through the port. We have attractive projections into the future, both in terms of captive trade, that is, the trade that is coming into Ghana as a whole, and then transhipment and transit is the bonus. But the focal point is the Ghanaian market, we have a good level of consumption. We are discharging cars, currently about 2,000 cars every week. And we have not even started spending the oil money. The benefit of the oil has not yet started spilling into the national economy and yet the roads are already choked. Everyone is driving a car. The whole system is choked, so naturally we can say “look, this is the place to do business”.
There is a high level of consumption and the market is there. More and more bigger vessels are coming into the country. The construction industry will be setting up more roads and bridges. That means that a lot more traffic is going to be coming in to the country.
What are your personal challenges?
Principally, how to get these potential private investors to believe that this is not like any other African country, because you will always come across the “African factor”. Incidentally, we are also in West Africa, where there have been historic issues of war and tribal conflict and so on. To what extent can I convince these investors about the situation? To what extent can I convince them that the Ghana Ports and Harbours Authority is the kind of institution that can run itself? We don’t depend on central governments. We pay dividends to the government. The government by law has given us the opportunity, even though we are 100% state-owned, to behave and operate on a purely commercial basis. To what extent can I convince them to trust in that legal, or operational, philosophy?
These are the challenges that I will be facing. And the challenge of getting the rest of the communities surrounding the ports development on board, because, naturally, we will be kind of interfering with their communities, especially as we go to the rural districts and townships, to go through with the development. We need to be talking to them, to appreciate that change is coming and change is necessary and that we have to do this. Those are the main challenges that I will be facing.