Chinese Company to Fund $2bn Ghana’s Railway Construction


Babatunde Olaoluwakitan

Following a Memorandum of Understanding signed by Ghana’s Minister of Railways Development on 21st March 2019 with China Railways Construction Corporation (CRCC); the leading Chinese Construction Conglomerate, the Ghanaian government has been offered a way to rehabilitate and construct a 560 km standard gauge railway line. The proposed railway line will run through designated stations, including the terminals at Aflao and Elubo, when completed.

Three years ago when the Government of President Nana  Akufo-Addo came to power, it determined to pursue a programme of infrastructural developments throughout the length and breadth of the country, particularly in the rehabilitation and/or construction of the country’s moribund railways infrastructure.

In addition to the rehabilitation and construction of the 560 km Eastern Region railway line, the Government plans to establish Assembly Plants in at least two regions of Ghana for the building of locomotive coaches and wagons that would constitute the rolling stock for Ghana Railways in the future. The Minister of Railway Development, Hon. Joe Ghartey, Mr. Dou Yisuo representing CRCC and Mr. Henry Djaba Jnr, the Managing Director of Lakeland Group of Companies, who are the local content partners of CRCC, all agree that the construction of the Assembly Plants will involve the investment of over a billion US Dollars in Ghana over the period of construction of the Assembly Plants.  The Minister of Railways was quick to point out the many benefits of the planned Assembly Plants for the employment of Ghanaian Engineers and others as a welcome boost to the country’s economy.

In several meetings held by the trio recently regarding the funding of the construction project, CRCC did confirm to Hon. Joe Ghartey, that they are ready to mobilise to site.

The good news for Ghana is that the Ghanaian Government will not be funding the railway projects as a result of the understanding they have with CRCC concerning the funding for the Railway line construction, as the funding is to be arranged by CRCC. Besides CRCC, another Chinese Company, Sinochem, one of the largest Oil Companies in China, is equally prepared to provide up to $3 billion as funding of railway construction projects throughout the country, backed by Crude Oil futures.

Interestingly, analysts are comparing the fact that Nigeria and CCECC, a subsidiary of CRCC, had also signed a $2bn Agreement to build a 156 km railway line between Lagos and Ibadan, in 2016, which faced some delays, until march 2017, when a ground breaking ceremony finally took place. Meanwhile, Ghana has signed an MOU with CRCC to build a 560 kilometer railway line in Ghana for the same contract price of $2bn, which Nigeria is spending on 156km of railway line, more than twice the cost of building similar rail tracks in Ghana.   

Upon the invitation of Nigeria’s Minister of Transportation, Hon. Rotimi Amaechi recently, Hon. Joe Ghartey, Ghana’s Minister of Railway Development visited his Nigerian counterpart to specifically inspect and assess the railway construction projects that the Chinese Conglomerate has completed and that are currently being undertaken in Nigeria, as they are strikingly similar to those proposed by Hon. Minster Ghartey to be constructed in Ghana. He was evidently impressed by the very high standard of construction achieved by the Chinese construction company. There have also been inspections and approvals of the proposed sites following the inspection and assessment done.