Government’s ongoing effort to improve the rail sector has been boosted by an agreement between mining firm, Ghana Manganese Company, and the Ghana Railway Company Limited for the repair of an important section of the dilapidated Western Rail Lines.
The $10 million deal will rehabilitate the approximately 15km Kojokrom to Tarkwa section of the Western Rail Lines and represents freight advance from Ghana Manganese Company to the Ghana Railway Company.
Minister for Railway Development, Joe Ghartey, said Wednesday at a short press conference to announce the agreement that the Kojokrom to Tarkwa line represents an economically viable and critical part of the 340 km Western Rail Line due to its importance to mining companies, one of which is the Ghana Manganese Company Limited.
He said $4.9 million will cover operational expenditure for the rehabilitation project, while $5.1 million will cater for capital expenditure.
The $10 million advance payment will then be deducted from freight fees over a period of three years, he said about the agreement.
“Even before this agreement, the Ghana Railways Company Limited had started rehabilitation of the line, from Tarkwa to Nsuta, where Ghana Manganese is located,” he said.
The project is expected to span a maximum of seven months, although Mr. Ghartey is confident it may be completed within four months.
The Minister revealed that there has been a drop in quantity of manganese freighted for the Ghana Manganese Company by as much as 30,000 tonnes due to the poor rail line that has derailed a number many times.
The defective rail line, the Minister said, “forces Ghana Manganese to go by road, which is slightly more expensive but also affects our roads. We want them to come by train.”
There will be a special committee, chaired by the Railways Development Ministry, with oversight responsibilities for the rehabilitation Kojokrom to Tarkwa project.
Meanwhile, work has already begun on the Western Line with about $40 million from the Railway Development Ministry’s total 2017 budget allocation of GH¢518.4 million.
Chief Executive Officer of Consolidated Minerals Limited, which owns the Ghana Manganese Company, said although Ghana is rich in natural resources, and skilled mining sector workforce, poor infrastructure has been a problem – underscoring his company's decision to support the rehabilitation project with the freight advance.
Mr Oleg Sheyko said the agreement also forms part of the company's quest to increase the export of manganese by 300,000 tonnes by end of this year.
"At the moment, we export by rail only 20% of our shipments and 80% by road, so when we rehabilitate the rail, hopefully, we will be able to double export by railway," he said.