Cabinet Approves $600m Atuabo Port Project

Atuabo 1Cabinet  has given approval for the establishment of the 600-million-dollar Atuabo Free Port project in the Western Region, which is expected to create more than 2,500 jobs.

The construction of the free port, being promoted by Lornho, a leading British firm, will make Atuabo the West African hub for the servicing of vessels, especially those operating in the oil and gas industry.

Cabinet’s approval, which was confirmed by Energy Minister, Emmanuel Armah Kofi Buah to The Ghanaian Times yesterday, follows the completion of successful preparatory works which included feasibility studies, acquisition of land, productive community engagement and Environmental Impact Assessment.

Following Cabinet approval, Parliamentary ratification is in process following which, the active construction works are expected to take off soon.

The project has been structured to be 100 per cent funded by the private sector and without the requirement of a sovereign guarantee or funding from the government of Ghana.

Steven Gray, Development Director at Lonrho Ports, explained to The Ghanaian Times that the government had negotiated that in addition to the government’s free carry of 10 per cent of the project, a further 35 per cent of equity be made available for Ghanaian institutions.

“This is to secure a 45 per Ghanaian participation in Atuabo Free Port,” he said, adding that the Port’s Governing Board would be chaired by a person appointed by the government.

He further explained that “this is a significant private sector initiative that reflects the international appetite for private sector investment in infrastruc-ture projects in Ghana, such that no capital cost will be incurred by the Government of Ghana, and the project is totally off the government’s balance sheet,”

He said government’s conditions wet met by the company due to Lonrho’s determination to partner the government in developing the oil and gas services industry.

So far he said, the company has spent about 15 million dollars for the feasibility studies, land acquisition and other preparatory works.

Ghana, he said would be the ultimate beneficiary of the project, indicating that “once operational, the government as an equity shareholder in the project will earn dividend and royalty payments,” in addition to the thousands of jobs and skills transfer for Ghanaians.

Apart from benefits to central government, the chiefs and people of the area would also benefit. The company has agreed to use the leased land as the Atuabo community’s equity in the project.

He said as a condition from Cabinet, the name of the project had to be changed from Lonrho Free Oil and Gas Services Port to Atuabo Free Port as a way of promoting the economy of the region.

According to Mr. Gray, the project, which has been welcomed by chiefs of Atuabo, “is a development that can expand the economic opportunities of Ghana as an attractive destination for foreign direct investment into West Africa for the oil and gas sector”.

In addition, he said the project, which has been designed to provide the necessary infrastructure to support oil and gas companies to develop and enhance local content, has no indefinite exclusivity, since it does not prevent the establishment of other service ports in Ghana.

The Atuabo Free Port Complex, which would be operated in collaboration with the Ghana Port and Harbours Authority and other relevant agencies, would provide support services for the offshore oil and gas developments in Ghana as well as provide the infrastructure for companies wishing to offer services to their other oil and gas clients in the region.

Services to be provided by the Free Port to the oil and gas industry include as Logistics Supply Bases, offshore fabrications, rig and ship repairs, modification, maintenance and life support operations.

It supports the government’s Medium Term National Development Policy Framework dubbed: “Ghana Shared Growth and Development Agenda 2011-2013”, which calls for spatial planning to encourage developments that bridge the spatial divide between the traditional economic growth points to other locations around the country and relieve the perpetual problem of congestion of the ports in Ghana.

The project’s concession agreement was negotiated by Lonrho with the Cabinet sub-committee involving Ministries of Petroleum and Energy, Transport, Finance and Economic Planning, Trade and Industry, Foreign Affairs and Regional Integration, Justice and Attorney-General, Ghana Ports and Harbours Authority, Ghana Revenue Authority and Ghana Free Zones Board, before the full cabinet approved it.

The project began in August 2011,with the signing of a Memorandum of Understanding between Lonrho and the government for feasibility studies which was funded by the former.

Lonrho currently operates in 18 African countries in the fields of infrastructure development, transport, agribusiness, hospitality industry and support services.

As part of its local content plan, Lonrho would offer skills development training for artisans in the area to be engaged for the construction process, while it has a comprehensive livelihood restoration programme for the communities directly affected by the development of the port.

In addition, a development assistance trust, which would be transparently funded as part of the land lease arrangements with the stool, would be created to focus on investing into social infrastructure facilities such as schools, clinics and community centres.

Also, the company intends to support small scale enterprises to actively participate in the project which is expected to offer more than 1,000 jobs to the locals. By Edmund Mingle

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