Business News of 2014-04-01

Lonrho deal not in the interest of Ghana – Union

The Maritime and Dockworkers Union (MDU) is asking government to either abrogate its contract with Lonrho Ports Ltd or renegotiate the terms of the existing contract for the Atuabo free port project.
The Union which is questioning the terms of the contract say it breaches the laws of Ghana and gives Lonrho Ports Limited too many benefits. According to the Maritime workers Union, the contract gives Lonrho Ports Ltd exclusive right to provide “specialised services” for the oil and gas industry in the Western Region and this breaches PNDC Law 160 of 1986.
Under section 5 (1) of the PNDC Law 160 of 1986, it is only the Ghana Ports and Harbours Authority (GPHA) which is authorised to plan , build, develop, manage, maintain , operate and control ports.
In the contract seen by citifmonline.com, Lonrho Ports, a 100% subsidiary of Lonrho Plc, is to develop a new, dedicated oil services terminal at Atuabo in the Western Region. The agreement gives Lonrho the exclusive to operate the Freeport, with tax exemption, for 25 years, with further rights for another 25-year extension.
The Chairman of the workers, David Songotu in an interview on the Citi Breakfast Show said the Maritime Dockworkers oppose the deal because laws of the land gives the exclusive right to the Ghana Ports and Harbours Authority (GPHA) to ”plan, build, develop, manage, maintain, operate and control ports”.
Mr. Songotu said the Maritime and Dockworkers Union is against the agreement because”of the dangers that are involved in allowing the private hands to construct and giving the private entity the exclusivity to the whole of the Western region…”
He said the act has some serious implications for the country. ”The fact that you’ve given the exclusivity to Lonrho will make the Ghana Ports and Harbours Authority (GPHA) a white elephant and also it will cause a security problem…,” he added.
“We are, therefore, opposed to the terms of the agreement which provides exclusive right and tax exemption for the operations of the Lonrho Ports Limited in Atuabo for 25 years which is renewable for another 25 years,” he opined.
Government has already given sovereign guarantees for loans for the expansion of the Takoradi port and critics of the Lonrho deal say the free port contract will render port unprofitable.
CLICK HERE FOR DETAILS OF THE CONTRACT