Ghana: US$1.5bn Tema Port project sparks local content concerns

Sep 06, 2016

Domestic suppliers, construction and transport companies are edgy they could be side-stepped in the execution of the US$1.5 billion Tema Port Expansion project, which is expected to start in the next couple of months.

Tema Port
Tema Port

The lack of clarity of the role local companies will play in what is set to be the biggest single project of the year has provoked concerns about the need to tighten and enforce local content provisions in contract execution in the country.

Our correspondent has gathered that as it stands now, no local company has been signed onto the project yet, a situation that has heightened anxiety among a number of home-based construction and haulage firms. A source disclosed that the concerns of local firms are based on insider information that China Harbour Engineering Company (CHEC), the company that has been awarded the marine construction contract, has planned to “bring down” 1,000 workers, 100 haulage trucks and intends to buy a local quarry.

“Our argument is that if local companies are to benefit from this project, these are the very areas that we can service. We have the expertise and the capacity to be partners in the execution of the biggest project for this year,” the source, which pleaded anonymity for fear of being antagonized, noted.

The contractor of the Tema Port Expansion Project, the source said, should be made to “respect the country’s local content laws” as that will enable local businesses in the construction sector to benefit from the high-profile project. China Harbour Engineering Company (CHEC), a Global Fortune 500 company, has been awarded the marine construction contract together with AECOM Professional Service (Ghana) Ltd., to oversee the construction.

Whilst it not clear what specific local content demands government has made on the contractors, the Board Chair of the Ghana Ports and Harbours Authority (GPHA), Samuel Ofosu-Ampofo, has been “urging” them to cede some of the jobs to local contractors.

At the signing of a $667 million financing deal between lead investor, Meridian Port Services, and the International Finance Corporation (IFC), Mr Ofosu-Ampofo said government want locals to benefit “because we have the labour and expertise.” He said: “We expect that downstream opportunities will be given to Ghanaians and I urge the contractors to engage local contractors because there are companies here that are adequately competent to undertake such works.”

According to lead investor of the project, Meridian Port Services Limited, the expansion works will create around 5,000 direct jobs, with industry experts estimating that the new infrastructure will further create auxiliary jobs of approximately 450,000 new jobs.

The Tema Port expansion project is expected to increase the capacity of the Port to accommodate some of the world’s largest container ships as well as to improve cargo handling services in line with efforts to enhance the competitiveness of the port as a leading maritime hub in the West African region. Presently, the largest vessels that can dock at the Tema Port are the West African Maximum Vessels (WAFMAX), which can carry between 4,500 to 5,000 container Twenty-Foot Equivalent Units (TEUs).

But the impending expansion will deepen and add four new deep-water berths to receive vessels of up to 20,000 TEUs capacity.

 

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