Massive Facelift For Roads, $1 bn to be sunk, Scheduled to be completed in 2 yrs

Lead Story, July 25, 2008
Story: Emmanuel Adu-Gyamerah
A significant portion of the country’s road network, identified by the government as the “priority zone”, has been earmarked for a massive uplift to enhance regional and national integration.
The exercise, which is expected to be completed within two years, is to be funded from a $1 billion loan from Goldman Sach International (GSI) of the United Kingdom (UK).
The priority roads include the Fufulso-Sawla, Wa-Han-Tumu, Chichuliga-Tumu, Agona Junction-Elubo, Elubo-Asemkrom-Enchi, Nkawkaw-Obomeng-Mpraeso, Koforidua-Bunso, Gambia No 2-Kyeremasu, Tepa-Goaso, the Sunyani outer Ring Road, Worawora-Dambai, the Cape Coast Ring Road, with an interchange at the Pedu Junction, Kumasi-Sunyani and the Mampong town roads.
Under the project, the following roads are also expected to be converted to dual carriageways: Kasoa-Cape Coast, Cape Coast-Elubo, Tema-Aflao and Kumasi-Techiman.
The Accra-Kumasi corridor will also be completed within the period.
Since majority of the roads fall within the country’s agricultural enclaves, the project is expected to boost socio-economic activities, while those that connect the regional capitals are expected to enhance administrative and commercial networking, lower vehicle operating cost, save travelling time and reduce accident rates.
The improvement of these roads is also expected to provide the country’s landlocked neighbours access to Ghana’s ports, in addition to facilitating regional co-operation and trade.
The Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, said in an interview that studies on the priority roads were either completed or ongoing and it was envisaged that procurement of works would be launched as soon as possible on all the roads in respect of which studies had been completed, while the others on which studies were ongoing would have their tenders as and when the studies were completed.
He added that some ongoing projects would be financed under the agreement to ensure that contractors’ cash flows were improved to ensure early completion of the projects.
Mr Baah-Wiredu stated that the government offered sovereign support in the form of indirect guarantees and undertakings which would be adequate security to support the repayment of the facility and accrued interest.
“It is expected that the facility and accrued interest will be amortised with revenue from the payment of tolls on the roads identified and according to traffic and revenue projections.
He explained that from traffic and toll revenue projections, $1.8 billion would be accrued from 2010 to 2018, as against the cost (debt servicing and maintenance) of $1.7 billion, while by the close of 2020 the revenue accruals would be about $2.5 billion.
The deal, which is yet to receive parliamentary approval, offers considerable benefits for the country, as it will guarantee the financing of essential road infrastructure to facilitate rapid socio-economic growth.
The Road Sector Development Programme (RSDP), which the Ministry of Transportation had been implementing over the last five years, with financial support from the International Development Agency (IDA), came to an end on June 27, 2008.
A document on the loan, which was made available to the Daily Graphic, indicates that another programme, the Transport Sector Development Programme (TSDP), which is being prepared may take a year or two to take off.
The government is, therefore, sourcing the $1 billion loan to fund the priority road projects which call for immediate interventions before the beginning of the TSDP.
The ministries of Finance and Economic Planning and Transportation, therefore, invited proposals from GSI for structuring and arranging a facility to provide funds for the implementation of the government’s priority road infrastructure projects.