Parliament approves US$243.6 million Supplier’s Credit for trains

Parliament has approved an amount of US$243.6 million, being Supplier’s Credit Agreement between Ghana and Dongfang Electric International Corporation, for the procurement of Standard Gauge rolling stock (trains).

The terms and conditions of the Agreement are that the facility amounts to US$243,600,000, repayment period of 10 years, tenor of 12 years, grace period two years, interest rate of six months and Sinosure premium of up to seven per cent of the Supplier’s Credit.

Dr Mark Assibey-Yeboah, Chairman of the Finance Committee, presenting the Committee’s report in Parliament, stated that the instant Credit Agreement was to finance the acquisition of standard gauge rolling stock to enable the testing, commissioning and immediate operation of the new standard gauge railway lines currently under construction in the country.

He explained that the scope of the contract includes the supply of nine 4500HP mainline diesel locomotives with maximum speed of 160km/hr for passengers, supply of 48 passenger coaches, 15 mainline diesel locomotives for freight, 330 freight wagons and 11 Shunting diesel locomotives.

As part of the contract, the Supplier is to supply the spares and tools along with the locomotives and rolling stocks within a 24-months warranty period.

Dr Assibey-Yeboah indicated that the contract also specified the establishment of one maintenance workshop with maintenance equipment at a location to be determined by the purchaser, and provision of After Sales Services to guarantee regular and proper maintenance of the trains during the operational period.

He said the Supplier is also expected to provide training for skilled personnel or railway engineers and managers in all aspects of the rolling stock systems including locomotive design, operation and maintenance.

Dr Assibey-Yeboah said the contract for the construction of the 97km railway line from the Port of Tema to Mpakadan was expected to be complete ahead of the contractual completion date of July, 2021.

He said the contract, however, did not include the supply of rolling stock to test and operationalise the line upon completion.

He noted that some of the rolling stock being financed under the instant Supplier’s Credit Agreement would be used to test, commission and operationalise the Tema-Mpakadan rail line.

The Supplier’s financing package provides a 100 percent financial solution and there would be no additional budgetary requirement on the part of Government to execute this project, Dr Assibey-Yeboah said.

Alhaji Inusah Fuseini, the Member of Parliament for Tamale Central, stated that the rail transport was supposed to complement the road transport.

He explained that if the country had an efficient and effective rail transport system, its roads would last longer as bulk cargo could be transported through rail.

“That is why it is important to support any arrangement, which would put rolling stock on the lines already constructed,” he added.