WOW Ghana to invest $21 Billion Dollars into Railway
Railways have always been a driving force in the industrialization and economic growth of
a country. Railways contribute to both social enthusiasm and commercial competitiveness by
transporting millions of people and goods to cities and towns worldwide.
The railway has been a critical tool in driving economic growth in countries that have established
transportation infrastructure. Countries such as the United Kingdom, Germany, India, Japan,
China, and others have seen significant improvements in their people's lives and
economic development as a result of the effective use of railways as a major mode of transportation.
In the 1950s, train transportation was regarded as one of the best on the African continent. The
railway was an important mode of transportation, connecting the major cities of the countries.
Railway travel was extremely efficient, dependable, cost-effective, and safe.
The most important aspect was how it improved the local economy of traders and
agricultural product transportation from the source to market hubs.
Historically, Ghana's railway system was limited to the plains south of the barrier
range of mountains north of Kumasi. However, the 1,067 mm narrow gauge railway, which spans 1,300
kilometers, is undergoing major rehabilitation, with inroads into the interior now underway.
In Ghana, the majority of the lines are single tracked, with an estimated 32 kilometers of double
tracking in 1997. Soon after independence, Ghana built a massive railway infrastructure connecting
the country's coastal industrial towns to the country's resource-producing areas.
The economy of the country's mining, forestry, and cocoa growing regions benefited from railway
transit. In the 1950s and 1960s, railways were the most popular mode of transportation for
Ghana's small businesses and women. Due to years of neglect by successive previous governments,
many Ghanaians have never considered using the railway system as an alternative mode of
transportation. Despite the government's efforts to fill the transportation market with buses as
provided by previous administrations, the transportation system was primarily owned
by the private sector, filling a gap in our deficient transportation system.
Ghana's initial operational rail line of 947 kilometers in 1960 with two lines, the western
line and the eastern line has been reduced to 160 kilometers in 2020 due to neglect and underfunding
over the years. Ghana had the highest decline in the effectiveness of available rail lines
(16.9% in 2020), experienced a significant decrease in freight volumes transported,
and accessibility to railway services (0.6% in 2020), indicating the sector's dire state.
The Western Rail Line connects Takoradi Port to Kumasi, with
a branch line connecting Dunkwa to Awaso. It is 339 kilometers long in total. Today,
it is arguably the line that lends itself best to a BOT or BOOT financing model.
While The Eastern Line connects Accra to Kumasi, with a branch line connecting Accra to Tema.
Railways have recently gained prominence in the development of emerging countries, particularly
in Africa, and particularly in Ghana. Ethiopia's colonial-era railway has also opened, thanks to
3.4 billion dollars in Chinese bank funding. New railway systems are being built in Kenya, Senegal,
Tunisia, and Morocco, which are revolutionizing people's lives and national economies.
Ghana's rail system has been in disarray for a long time.
As the government's drive to industrialize the country continues and new mineral deposits are
exploited, the prospects for investing in a modernized railway system appear promising.
The sector is being restructured in order to increase private sector participation in the
delivery of rail transport services in order to stimulate the country's socioeconomic development.
Ghana has started building mega railways to all of the country's major cities and strategic mineral
resource sites. The project is being funded with government resources. A build-and-operate
transportation agreement with private partners and a Chinese development bank credit facility.
So far, the Ghanaian government has awarded contracts totaling $9 billion to various
firms in order to meet its goal of constructing 1400 kilometers of new
railway lines by the end of 2020. Other contracts for other sections of the rail
network are currently being negotiated, with completion expected within the next ten years.
China Gezhouba Group, China Harbour Engineering, and China Road and Bridge were reported to be
interested in the scheme last year, as were African Rail of Ghana and the US-registered
TFMC Rail Mark. "Because the government of Ghana cannot fund the project with its own resources,
we retained Price Waterhouse Cooper as our transaction adviser, and tenders were sent
to the international community for interested bidders," Mr Dombo explained. Following that,
45 people were shortlisted, which was later reduced to six. We had to be cautious with
the selection process because some of the bidders were simply time wasters.
It's been a slow grind, but it's been a deliberate and responsible grind."
A railway exists in eastern Ghana, but it is inoperable except for stretches between
Accra and Nsawam and Accra and Tema. Station upgrades, as well as the provision of rolling
stock, signaling, and communication equipment, will be part of the reconstruction. In addition
to the Eastern Rail project, the government is working on the financing, development, and
operation of the 333km western line, 22 kilometers of which will be financed by the government.