Members of the Maritime and Dockworkers Union have joined the Board and Management of the Ghana Ports and Harbours Authority in their vehement opposition to the decision by the Mahama-led National Democratic Congress government to grant exclusive right to Lonrho Ports Ltd to develop a free zones port at Atuabo in the Western Region.
The port project was initially christened the ‘Lonrho Free Ports Complex’, and estimated to draw some $400m for construction of the initial required infrastructure, but has now been re-christened the ‘Atuabo Free Ports Complex’, with the amount involved reviewed upwards to $600m.
Even though board members and management of the Ghana Ports and Harbours Authority have consistently maintained for over three years that the deal “is inconsistent with our current law and maritime development strategy as a country”, President John Dramani Mahama and his Cabinet have gone ahead to give approval for the project to take off.
In fact, at one point the GPHA Board, in a memo to the Transport Minister, said they were “being persuaded to endorse a proposal from a foreign institution in a clear violation of our own stated policy when there is no evidence of value for money analysis by a third independent body and also to grant monopoly to a private initiative.”
In view of the issue of illegality, the Council of the Maritime and Dockworkers Union has, therefore, charged the Mahama government to abrogate the agreement to ensure that the national interest is protected.
“Council calls on government to abrogate the agreement that provides the exclusive right to Lonrho Ports to build a Free Zone Oil and Gas service port in the interest of the nation.
Council wishes to express its readiness to work to ensure that Ghana Ports and Harbours Authority Act, PNDC Law 160 of 1986 is respected,” the MDU stated in a resolution adopted at the end of it 58TH National Executive Council meeting.
“Council is worried that government has granted Lonrho Ghana Ports the right to build a Free Zone Port with exclusive right to provide oil and gas service to oil companies in the Western Region of Ghana. Council holds the opinion that the Oil and Gas Free Zone port being built by Lonrho Ghana Ports violates the PNDC Law 160 of 1986, which grants Ghana Ports and Harbours Authority (GPHA) the right to plan, build, develop, manage, operate and control ports,” the resolution added.
According to the MDU, allowing Lonrho to build and operate a free port in the country at Atuabo “would undermine the security of the nation”, adding that the GPHA “should have been allowed to develop the Oil and Gas service port at Atuabo in the Western Region as part of the port expansion of the Takoradi Port which would improve the benefits to the country in the context of the Local Content of our Oil industry.”
“Council shares the view expressed by the Board of Directors of GPHA and other institutions that the building of the Oil and Gas Free Zone Port by Lonrho Ghana Ports is not in the interest of Ghana,” the resolution summed up its verdict on the project.
In spite of the spirited opposition to the project, the New Statesman can say on authority that mobilisation for the project is earnestly going on, with Lonrho Ports reported to have spent US$15m on pre-feasibility studies, land acquisition and other preparatory works.
The New Statesman can also report that some high ranking officials of the GPHA are banking their hopes on Ghana’s Parliament to stop the deal which will soon be presented to the House for ratification. They are, however, sceptical about the readiness of “our generally partisan MPs” to rise up to the occasion “to protect the national interest at the expense of their partisan interest.”
A GPHA technical report on the project says “the entire proposal from the Lonrho Ports is but an Estate Development Plan intended to acquire land with government support, obtain a Freeport Status for tax exemption for the next 25 years, renewal for another 25 years, restrict all others, including GPHA, from developing similar facilities within the geographical region and take advantage of the ‘huge’ potential for Ghana’s growth and invite terminal operators to invest in the facility after an initial investment of US$400m (now reviewed to US$600m) on basic infrastructure…”
In fact, the board of directors of GPHA, lead by the Chairman, Alhaji Abubakari Sumani, had mounted a spirited resistance to the decision by the Mahama-led NDC government to grant exclusive right to Lonrho Ports Limited to develop the free port, sited at Atuabo, in the Western Region, to provide “specialised services” for the oil and gas industry. But all their technical advices were ignored by President Mahama and his cabinet members.
So passionate was the resistance that the Board Chairman, Alhaji Abukarkari Sumani, was said to have incurred the wrath of “some very powerful forces” in the Mahama administration who are reportedly scheming to get him out of office.
The over $600m deal was said to have been stopped by the late President John Evans Atta Mills, taking cognizance of its inconsistency with the nation’s maritime laws. But it later received further impetus with the assumption of office by President John Dramani Mahama.
The memo which was signed by the Board Chairman, Alhaji Abubakari Sumani, added: “We are unable to recall any precedence (sic) in our transport industry, be it aviation or maritime, where such statutory protection has been granted to a private business initiative.”
“As the governing Board of the state ports Authority with the requisite knowledge in the maritime industry, we are unable to appreciate the business need to endorse any form of monopoly for any private operator or developer in the maritime industry. There may be other non-business considerations that are not known to the Board. The particular case of the Lonrho proposal will not only work against the future development of the maritime industry in Ghana but could create room for agitation for smaller facilities elsewhere and that will be the end of the maritime planned growth in the country,” the memo categorically stated.
“Accordingly on behalf of the Board of Directors of the GPHA, we would not recommend any form of monopoly or unfair special advantage granted to any terminal operator, especially for the yet to be tapped oil and gas industry in the Western Region or elsewhere…,” the memo, which was copied to the Office of the President, Minister of Finance, Minister of Trade and Industry and the Attorney-General and Minister of Justice, summed up the position of the GPHA with respect to the proposal.
Lonrho signed a Memorandum of Understanding with the Government of Ghana in August 2011 for a feasibility study to be conducted for the Freeport project. Lonrho confirmed to Government in August 2012 that the project was feasible, leading to the signing of a concession agreement.
Highlights of the about 30-page Concession Agreement include the exclusive right granted Lonrho to operate the Freeport, with tax exemption, for 25 years, with further rights for another 25-year extension; provision of 2000 acres of land by the Government of Ghana at the project site, which is strategically located opposite the Jubilee Fields; provision of security, immigration and custom by government; tax free zone for companies operating in the part and for materials imported or in transit; and the development of the only Petroleum and Hyrdocarbons Logistics Port in the Western Region.
Lonrho itself acknowledges that by the agreement reached with the Government of Ghana, the project “has a number of clear competitive advantages over potential rivals…”, citing the “Freeport tax free status; Government support; ideal geographical location for supporting the burgeoning industry in Ghana and further west; it will accommodate the client’s specific requirements in the Master Planning; no tidal restrictions; Accessible 24 hours a day, 365 days a year.”