June 29 2020

Ghana signs agreement with China’s Dongfang Electric International Corporation for locomotives

Source: Ghana Business News

Ghana has signed a contract agreement with China’s Dongfang Electric International Corporation for the supply of Locomotives and Rolling Stock, which makes up a total of 35 standard gauge trains for passenger and freight services in Ghana.

The quantities and categories of rolling stock which would be delivered include nine Passenger Locomotives with capacity of 4500HP and 160km/hr speed and15 Freight Locomotives with capacity of 4500HP and 100km/hr speed.

Others are 11 Shunting Locomotives with capacity of 1000HP, 48 Passenger Coaches and 330 Wagons made up of 230 box wagons and 100 flat wagons.

This forms a total of 35 new standard gauge trains to be imported into the country for the first time in the history of the country.

The Contract would be implemented in two phases.

In the first phase, Ghana is expected to take delivery of two trains within 12 months with an additional seven trains within the following six months bring the total to nine trains in the first phase.

The remaining twenty-six trains would be delivered in the second phase within 18 months from a date to be agreed by the parties.

Speaking at the signing ceremony in Accra, Mr Joe Ghartey, the Minister of Railways Development, said the Ministry, as part of its mandate to revamp and modernize Ghana’s railway sector was undertaking the construction of a number of standard gauge railway lines.

He said the new standard gauge lines were currently on-going on the Western line from the Port of Takoradi through Kojokrom and Manso to Huni Valley which makes a track length of approximately 134 km.

“Currently on-going is also the construction of the Tema to Mpakadan standard gauge railway line which is also approximately 100km, Mr Joe Ghartey said.

“The development of these standard gauge lines is in line with Government policy, as contained in the Railway Master Plan, for all new railway lines to be developed with the standard gauge.”

He said in view of the need to obtain standard gauge rolling stock in time for testing and commissioning of the works, the subsequent operation of the lines, as well as, the minimum duration required for the delivery of Rolling Stock, it was imperative, the Ministry considered the urgent procurement of Rolling Stock.

He recalled that Dongfang Electric International Corporation submitted a financing offer in the form of a Supplier’s Credit facility to the Ministry in January, 2019 for consideration.

He said the financing offer received a favourable response and was approved by the Ministry of Finance who then gave them the concurrence to go through the necessary statutory approval processes including obtaining Cabinet and Parliamentary approvals.

He said in order to successfully execute this project, Dongfang Electric International has formed a partnership with CRRC Dalian Company Limited (CRRC Dalian) and CRRC Qiqihar Rolling Stock Company Limited (QRRS).

The Minister said CRRC Dalian and QRRS were subsidiaries of the giant Chinese Rolling Stock Manufacturer CRRC, a Chinese publicly traded rolling stock manufacturer and one of the largest rolling stock manufacturers in the world.

He said a Committee was constituted to undertake a due diligence exercise and independently assess the capabilities, experience and the track record of the Supplier to deliver the rolling stock.

He said the Committee was made up of officials from the Ministry of Railways Development, the Ministry of Finance, the Office of the Attorney General and Ministry of Justice, the Ghana Railway Development Authority, Ghana Railway Company Limited, as well as Parliament’s Select Committee on Roads and Transport.

He said a due diligence mission was undertaken from 27th April -1st May 2019 in China; adding that it included site visits to the manufacturing plants and offices, as well as, technical meetings with the supplier and its partners.

He said based on the observations and findings made after the inspection of the plant and facilities of the manufacturers in China, as well as, the outcome of the technical meetings, it was established by the Committee that, the Supplier had the experience, track record and the capacity to manufacture the locomotives and rolling stock required by the Government.

“We remain committed to the process and we are going to work hard to complete the remaining steps in the statutory approval processes by obtaining approvals from Cabinet, Parliament and also the Public Procurement Authority,” the Minister said.