Minister for Railways Development, John Peter Amewu, has revealed that the inability of government and its partners to implement the Accra Skytrain Project is due to travel restrictions during the COVID-19 pandemic.
According to the minister, following pre-feasibility studies the parties were set to undertake a 9-month long feasibility studies to enable the project commence by January 2020.
However, this could not happen because the financiers pulled out of the transaction, causing the agreement to expire.
“The cost of the whole project, at that time, was projected at about US$1.9 billion after the initial pre-feasibility studies undertaken by Africa Investor. However, for a project of this magnitude and complexity, a very detailed feasibility study was required to form the basis for entering into a full concession agreement for its development,” he said.
“Africa Investor and GIIF were tasked to undertake the detailed feasibility study within nine months from date of signature as per the terms of the MoU to determine the feasibility and bankability of the project, after which work would have commenced by January 2020,” he added.
“Africa Investor later informed the ministry that in the light of COVID-19 pandemic and travel restrictions that prevailed at the time, their technical team could not travel to Ghana to undertake the feasibility studies. In this regard, therefore, their financiers pulled out of the transaction and the agreement automatically expired,” the minister told parliament, Tuesday.
Prior to this development, the Ghana Infrastructure Investment Fund (GIIF) had made initial payment of some US$2million to Africa Investor Holdings Limited toward the project.
The Accra Skytrain Project
The proposed Accra Train system is an integrated, elevated rail urban transit system that aimed at providing an efficient, cost-effective, reliable, safe and accessible public transport network in the Greater Accra Metropolitan area.
Government, through GIIF, signed a concession agreement in November 2018 with South African firm, Africa Investor, to construct the US$1.9billion Accra Skytrain project.
The Railway Ministry at the time was confident that the project was the solution to the Greater-Accra capital’s traffic congestion problems.
As a world-class mass transport system, the GIIF was optimistic that the project would create 5,000 jobs during its construction and further development of the capital.
Minister on revisiting the project
Mr. Amewu, in his response on the matter in parliament, further noted that even though a project of such sort is a bankable one and government may reconsider it, he does not see a skytrain project being done within the next three to four years.
“This project shows a very high level of bankability, and that was the triggering factor for continuing feasibly studies to extend the time for commencing the project. So the project, as it is, is really a bankable project. The ministry, of course, has an interest in such a very feasible and bankable project, and we will look at it when our situation improves.
“To construct a skytrain worth about US$1.9billion in three years, I still maintain is not possible. Not possible on two grounds; one has to do with the time period, and two has to do with the finances,” the minister stated.