Ghana/Burkina Faso Rail Project : Model for ECOWAS Connectivity

By Olawale Rasheed 

Capitals of members states of the Economic Community of West African States (ECOWAS) are not connected by rail decades after the establishment of the body. Attempts made in the past were jetissioned despite enthusiastic support of donor organisations.While private effort to rail connect the capitals is gathering pace,Ghana and Burkina Faso have taken the leading role ,creating a model connectivity that is progressing with commendable results.

The governments of both countries have made significant progress in the development of railway connectivity between the two nations. The rail ministers in both nations have put in enormous amount of coordinated work that has finally driven the implementation to a major point of realisation.

Recent press briefing on the state of the project by the Railway Minister of Ghana ,Hon Joe Ghartey clarified misconceptions ,succinctly captured progress of work,listed clear timelines from the beginning to date ,explained the accountability structure governing the process,spelt out adherence to international best practices and confirmed the seriousness attached to the project by both countries.

Certain take aways are critical from the briefing.First is that the timeline can only be achieved with real hardwork which both governments are confronting with determination. Second is that to consortia from China and Europe may eventually duel it out in the next stage of request for proposal.The project which is a groundbreaking model for the ECOWAS region is tasking the energy and attention of both Accra and Ouagadougou with observers commending the incredible level of attention to best practices and details in the multinational project.

But what are some of the specifics of the project. We republished below project update statement from the Minister of Railway in Ghana:

The Governments of the Republic of Ghana and Burkina Faso, led by their respective leaders, H.E. Nana Addo Dankwa Akufo-Addo and H.E. Roch Marc Christian Kabore, during a State visit to Burkina Faso in May, 2017, agreed that railway interconnectivity between the two West African neighbours is an important factor to accelerate economic growth and development for the mutual benefit of the two nations. 

Further to the decision of the Heads of States, a Joint Committee of Experts was established by a Memorandum of Understanding dated January 16, 2018, between the two States, to facilitate the implementation of the railway interconnectivity. The Joint Committee have since its establishment held twelve (12) meetings, alternating between Accra, Ouagadougou, Bolgatanga, Manga and Koudougou.

The two countries upon the recommendation of the Joint Committee of Experts, agreed on the need to engage Transaction Advisors, whose role is to assist the Governments of the Republic of Ghana and Burkina Faso to review/undertake various studies and also assist in a procurement process to engage a private sector investor(s) to develop the proposed Railway Interconnectivity Project between the Port of Tema and Ouagadougou, on a Build, Operate and Transfer (BOT) basis.

Subsequently, on 16th November, 2018, a consortium of two firms, Messrs TEAM Engineering S.p.A. of Italy and Messrs Vision Consult Limited of Ghana were engaged as the Transaction Advisors for the project after going through the procurement process under the Ghana Public Procurement Act, 2003 (Act 663) as amended. 

Messrs TEAM Engineering S.p.A. developed the Ghana Railway Master Plan in 2013 and are currently reviewing the plan to expand the rail network to meet present demands and to create an efficient rail transportation that will link important mineral potentials and centres of economic development; such as, free zone enclaves and industrial parks. Messrs Vision Consult Ltd. is currently leading a consortium to undertake feasibility studies for the Central Spine Railway Line from Kumasi to Paga.

The combined expertise of the two (2) firms, who are already conversant with the proposed existing alignment and also already possess the primary data to execute the assignment, cannot be over-emphasised.

The development of the project is being carried out in the following four (4) phases:i. Phase 1: Feasibility Studiesii. Phase 2: Procurement of Private Sector Partneriii. Phase 3: Analysis of Technical Studies by Private Partneriv. Phase 4: Construction and SupervisionFeasibility Studies

The Feasibility Studies, which commenced in December, 2018, as part of the first phase of the project development are at the final stages of completion. So far, the Transaction Advisors have submitted three (3) deliverables or reports, which have been reviewed and validated by the Joint Committee of Experts from both countries.The Inception Report was submitted by the Transaction Advisors and was discussed and approved here in Bolgatanga on 5th April, 2019.

Subsequent to the Inception Report, the Transaction Advisors submitted a Pre-Feasibility Report, including the preliminary alignment for the proposed railway line as the second deliverable. 

The report was reviewed and validated by the Joint Committee of Experts on 9th October, 2019 in Manga, Burkina Faso. The alignment or route of the proposed railway line between the Port of Tema and Ouagadougou has been approved by both countries to allow for the acquisition of the right-of-way for the construction of the railway line.

Proposed Route/Alignment

The proposed route or alignment starts from Tema through Mpakadan, which is currently under construction and expected to be completed by August, 2020. The line will continue from Mpakadan and will go through Hohoe, Nkwanta, Bimbila, Yendi, Tamale, Walewale, Bolgatanga, Paga, Po, Zabre, Tenkodogo, Manga and terminate at Ouagadougou.

In line with Government policy to connect all regional capitals by rail, a connection to the capital cities of Ho, Dambai and Nalerigu will be done. A branch line will also be constructed to Sheini to provide rail access to the huge iron ore deposits that have been discovered. The total length of the line, including the branch lines is approximately 1,200km. 
Economic Potential of the Line

The corridor has huge economic potential following the discovery, in commercial quantities, of mineral resources like iron ore, bauxite and manganese. Other potential traffic include, petroleum products, agricultural products, manufactured goods, construction materials, containerised cargo and passengers.

Review of Draft Final Report for Phase 1

The Joint Committee of Experts, led by the respective Minister’s responsible for railway development in Ghana and Burkina Faso, have been meeting since yesterday, to review and validate the draft Final Report of the Feasibility Studies submitted by the Transaction Advisors.

The comments and inputs from the Technical Experts are expected to be incorporated in the Final Report and submitted by the Transaction Advisor to enable us proceed with the next steps. The submission of the Final Feasibility Study Report will conclude the first phase of the project development.

Procurement Phase

The second phase of the project development, involving the procurement process for the private sector partner has also commenced simultaneously with the conduct of the Feasibility Studies. The two countries, through the Joint Committee of Experts, agreed to the following procurement process. 

The process involves going through the following three (3) stages of screening:i. Expression of Interestii. Request for Qualificationiii. Request for Proposal

Expression of Interest Stage

Expression of Interest advertisements were simultaneously published in Ghana and in Burkina Faso in April, 2018 and a total of sixteen (16) firms expressed interest to undertake the project on BOT basis. The Expression of Interest Proposals were jointly opened in Accra on May 28, 2018.

After evaluation of Expression of Interest proposals, twelve (12) out of the sixteen (16) firms met the minimum evaluation criteria and were therefore, shortlisted to the next stage of the procurement process, that is the Request for Qualification (RfQ) stage.

Request for Qualification Stage

The RfQ documents were issued to shortlisted firms in January, 2019 and the deadline for submission of qualification documents by the firms was 6th May, 2019 after the initial deadline of 25th March, 2019 was extended by an additional thirty (30) working days following requests for extension by some of the bidders.

By the deadline of 6th May, 2019, four (4) consortia out of the twelve (12) shortlisted consortia submitted RfQ documents for consideration. 

The RfQ documents were opened on 6th May, 2019 in Accra, in the presence of representatives of the firms/consortia who responded to the invitation. The official Tender Opening ceremony was co-chaired by the Minister for Railways Development and the Burkina Faso Ambassador to Ghana, H. E. Pingrenoma Zagre. Also present were the Members of the Joint Committee of Experts from Ghana and Burkina Faso, the Transaction Advisors (Messrs TEAM Engineering S.p.A./Vision Consult Ltd.), officials from the Ministry of Railways Development, Ghana Railway Development Authority, Ghana Railway Company Ltd., as well as, members of the Press.

The Joint Evaluation Committee that evaluated the Expression of Interest proposals reconvened to evaluate the RfQ documents submitted by the four (4) Firms/Consortia using the criteria set out in the RfQ.

Following the evaluation of the RfQ documents submitted and based on the criteria for evaluation, the Joint Evaluation Committee recommended that three (3) firms substantially met the minimum criteria and should be pre-qualified for consideration for the next stage of the procurement process (i.e. Request for Proposal stage).

The three (3) Firms/Consortia that substantially met the minimum evaluation criteria, arranged are:

a) African Global Development Sarl / Race Consulting Engineering LP / Kalliergos O.T.M. Consulting Engineering Company S.A. / NS-A Corp / Stichting Actieve Ondernemers Begeleidingb) China Railway No. 10 Engineering Group Co. Ltd. / China Railway Engineering Design and Consulting Group Company Ltd. / Strategic Initiatives Ltd.c) Frontline Capital Advisors / Mota-Engil Group / Deutsche Bahn (DB) / Siemens AG / AIIM / GIBB / Quadrante / AB & David

However, Frontline Capital Advisors have had their operating license as a Fund Management Company withdrawn by the Securities and Exchange Commission. The question as to whether or not this will affect their further participation in the process is currently under review. We are seeking advice from the Attorney-General on the subject matter. We will however, not allow this to delay us unnecessarily.

Request for Proposal Stage

The recommendation by the Joint Evaluation Committee from the Request for Qualification stage is currently going through an approval process to enable the issuance of the Request for Proposal to the pre-qualified firms as the third stage of the procurement process. 

The draft Request for Proposal document has been prepared by the Transaction Advisors and currently being discussed for approval by the Joint Committee of Experts.

It is expected that the Request for Proposal will be issued within April, 2020 and the prospective investors will be given a period of two (2) months to study the relevant technical reports and submit Technical and Financial Proposals for consideration.

Heads of States’ Committee of Eminent Persons

A six-member Committee of Eminent Persons, three (3) representatives each from Ghana and Burkina Faso, has been constituted to be in charge of the last stage of the procurement process and will make recommendations to the two (2) Heads of States for their decision on the preferred private sector partner.

Timeline for Negotiations and Signing of Contract with Private Sector Partner

Upon the submission of the recommendation of the Committee of Eminent Persons and subsequent approval by the Heads of States of Ghana and Burkina Faso, negotiations will commence with the preferred private sector partner to reach a common ground for the signing of a PPP Agreement and Financing Closure.

“Without any hinderances, we expect the negotiations to commence in August and concluded within a period of one (1) month to pave way for the commencement of the construction phase of the project”,Hon Ghartey noted in the statement.

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