ACTIVITY IMPLEMENTATION PROPOSAL TITLE AIP Ref. Contribution to Western Corridor Infrastructure Project WP2.28.2-1.013 Type of activity requested Financial System Development at regional level Work Programme WP Activity Category Amount in Euro N 2.1.1 1. Studies 136,700 2. Conference 53,670 3. Expertise spécifique 0 Contingencies (5%) 9,519 2 Total Cost 199,889 Region/country AFRICA Duration of Activity 10 months Sector Finance STE 1 assigned None Topic Capital Flows STE 2 assigned None Type of Conference & study STE 3 assigned None intervention Implementation modalities Nbre Description Framework contracts 0 Service contracts 1 Contribution to Western Corridor Infrastructure Project + organisation of 1 conference 1
NAME OF THE REQUEST TITRE DE LA REQUÊTE REGION/COUNTRY CONCERNED PAYS OU RÉGIONS CONCERNÉS SECTOR CONCERNED SECTEUR OU THÈME CONCERNÉ Western Corridor Infrastructure Project Ghana Upstream studies and Interventions on the enabling environment and State Owned Enterprises reform (Etudes en amont et interventions sur l environnement facilitant les affaires et l'amélioration du dialogue entre les secteurs public et privé) Studies in Investment prospects and financial system development (Etudes sur les potentialités d investissement et le développement du système financier) Support in the follow-up of recommendations (Actions de mise en œuvre des recommandations des études déjà réalisées). Capacity to relate to relevant and topical themes (Développement d une capacité de réflexion sur des thèmes pertinents et d actualité) NAME OF THE APPLYING ORGANIZATION: NOM DE L ORGANISATION ADDRESS: (Street, Post Code and Country) ADRESSE (rue, code postal et pays) CONTACT PERSON: PERSONNE DE CONTACT FUNCTION OF THE CONTACT PERSON FONCTION EMAIL ADDRESS ADRESSE COURRIEL TELEPHONE TÉLÉPHONE FAX FACCIMILE SKYPE (if any) Delegation of European Commission in Ghana THE ROUND HOUSE, 82 Cantonments Road, Cantonments, Accra P.O. Box 9505, K.I.A., Accra, GHANA - Mr Paulus Geraedts Head of Transport and Infrastructure Section Paulus.geraedts@ec.europa.eu Telephone: (233-21) 774094/774202/774236 Fax: (233-21) 774154 2
PARTNER ORGANISATIONS: PLEASE INDICATE THE NAME OF THE PARTNER ORGANISATIONS AND CONTACT PERSON(S), INCLUDING THEIR EMAIL ADRESSES MERCI D INDIQUER LE NOM DES ORGANISATIONS PARTENAIRES, DES PERSONNES DE CONTACT ET LEUR ADRESSES EMAIL Ghana Chamber of Mines, Ms Joyce Rosalind Aryee # 22 Sir Arku Korsah Road, Airport Residential Area, Accra P. O. Box 991, Accra info@ghanachamberofmines.org HOW THE PROPOSAL IS LIKELY TO LEAD TO FOLLOW-UP ACTIVITIES? COMMENT LA PROPOSITION EST-ELLE SUSCEPTIBLE DE CONDUIRE À LA PRISE EN COMPTE DES RECOMMANDATIONS ET DE DÉBOUCHER SUR LA MISE EN OEUVRE D ACTIVITÉS DE SUIVI? IS THE PROPOSAL CONSISTENT, COHERENT AND COMPLEMENTARY WITH OTHER INTERVENTIONS? EST-CE QUE LA PROPOSITION EST COHÉRENTE, CONSISTENTE ET COMPLÉMENTAIRE À D AUTRES INTERVENTIONS? EXPLAIN TO WHAT EXTEND THE PROPOSAL IS SUPPORTED BY KEY STAKEHOLERS? EXPLIQUEZ DANS QUELLE MESURE LA PROPOSITION EST SOUTENUE PAR LES PRINCIPALES PARTIES PRENANTES? Since the mid nineties, the EU has made significant contributions to the development of the transport infrastructure, and presently is contributing to the sector policy dialogue and strategic planning process with the Transport Sector Planning and Integration Programme. With important economic sectors such as mining (a.o. gold, bauxite, and manganese), timber, and cocoa, and offering home to 35% of the total population, western Ghana (i.e. Ashanti, Western, and Central Region) contributes about 35-40% to the country's gross domestic product. Since the mid nineties, EU has been actively involved in the improvement of the main arteries of this part of the country's trunk road network, and this will continue with the 10 th EDF flagship project. The EC is the currently the lead Development Partner in the Transport Sector Group, with active participation of World Bank, African Development Bank, DANIDA, KfW, AFD and JICA. A sort of competition for this project developed among stakeholders with varying degrees of credibility. This has led to a political decision to delay the completion of the ongoing service tender until the authorities would have provided some clarity and further assurance of their desire to use EC financing for the preparation of this important project. President J.A. Kufuor himself is strongly interested in the project, but he looks for a more credible commitment by a partner like EU, before deciding on whether to go along with proposals from other possible partners. The EU Delegation believes that, when prepared well, and with careful management of the relations with Ghanaian authorities, the Western Corridor Infrastructure Project could provide opportunities for Europe's industry and financial institutions, including the European Investment Bank and/or the EU Africa Partnership for Infrastructure. Through preliminary discussions with the World Bank, the Delegation is aware of the WB's potential interest in contributing to this infrastructure project, which would be in line with objectives of the Limelette process. Date: /02/2008 3
ACTIVITY INTERVENTION LOGFRAME SUMMARY OF THE INTERVENTION REQUESTED Résumé The EC is the currently the lead Development Partner in the Transport Sector Group. As part of EDF's transport and infrastructure portfolio, in October 2005, a pre-feasibility study was completed under the Mining Sector Support Programme (MSSP, 40 million, ex-sysmin) on rehabilitation of the western railway and improving the Takoradi port facilities 1, amongst others meeting the demand for a transport solution of mining ores (bauxite and manganese) produced in the western Ghana. The main purpose of this project is to enhance the chances of success of the Western Corridor Infrastructure Project (WCIP) through the sensitisation of potential investors and the railway industry and assistance, contribution to the revision of the TORs for the feasibility study and monitoring of implementation. The project will provide expertise and logistics warm up relations with Europe's railway industry (construction/supply) and with potential railway users (Rio Tinto Alcan, Ghana Manganese Company, and others), to help revising the terms of reference of the consultant that would prepare the Western Corridor Infra Project towards a stronger project financing approach, and to provide monitoring assistance during the implementation of this sensitive assignment. PROBLEM TO BE ADDRESSED : Problèmes à résoudre What is the specific problem which requires solution? In Ghana, transport is recognized as a key sector to boost economic growth, serving regional integration and the national development strategy. As part of EDF's transport and infrastructure portfolio, in October 2005, a pre-feasibility study was completed under the Mining Sector Support Programme (MSSP, 40 million, ex- Sysmin) on rehabilitation of the western railway and improving the Takoradi port facilities, amongst others meeting the demand for a transport solution of mining ores (bauxite and manganese) produced in the western Ghana. The table below presents some of the main features of the project 2. 1 Maersk is planning an investment in Takoradi port for modernization and expansion of the container port, including breakwater, deepening of port for sea vessels, etc. 2 The 40 m Mining Sector Support Programme (MSSP) Financing Agreement was signed between the European Commission and the Government of Ghana on 2 nd December 2002. The MSSP specific purpose is to enhance institutional capacities to effectively promote and regulate the mineral resources sector in order to reverse the current trend of reduced private-sector mineral exploration, while facilitating the development of sustainable medium-term projects. The on-going activities carried out under the programme are the following: Institutional Reinforcement and Capacity Building at the Ministry of Mines (MOM), the Geological Survey Department (GSD), the Minerals Commission (MC) and the Mines Department (MD), Geological Data Provision, comprising Geological Mapping and Geological Survey, Environmental Impact Assessment of the mining activities in the whole country and a Mercury Abatement project, Western Corridor Infrastructure prefeasibility and feasibility studies. 4
On the basis of the pre-feasibility report, it was decided by the Ministry of Lands, Forestry and Mines, and the Ministry of Ports and Railways, in consultation with the Ministry Finance and Economic Planning and the EC Delegation, that this project should be further investigated and prepared. Furthermore, it was agreed that the rehabilitation and/or upgrading of the western railway should be connected to modernization of the bulk port facilities in Takoradi 3, and that creation of a mining railway should be avoided, as the public interests could be better served, by also taking into account in the feasibility stage the transport of passengers and other commodities such as timber, cocoa, clinker, etc. In addition, strategic directions would have to be provided for the existing eastern and central railway lines and for the likelihood of a future ECOWAS railway line to Burkina Faso. This was reflected in the Terms of Reference for a consulting assignment (approx 1.8 million) for which a tender was launched in summer 2006. However, the political economy and context of this infrastructure project appeared to be complex and very dynamic, with representatives of the mining industry interested in a new bauxite mine to be developed, requiring a 50km extension of the railway network to the north (Nyinahin bauxite fields), and the railway industry presenting themselves to the Ghanaian authorities, interested in different forms of cooperation, ranging from traditional railway rehabilitation works to concession/ppp opportunities. PURPOSE OF ACTIVITY: But de la proposition Who are the beneficiaries and how will they benefit? How will the results of the activity solve the problem(s)? The main purpose of this project is to enhance the chances of success of the Western Corridor Infrastructure Project (WCIP) through the sensitisation of potential investors and the railway industry and assistance, contribution to the revision of the TORs for the feasibility study and monitoring of implementation. EXPECTED RESULTS : Résultats attendus What are the results expected from the activity? (one or more results will achieve the Purpose) The main expected results are: a. Using BizClim's expertise and network, in particular to warm up relations with Europe's railway industry (construction/supply) and with potential railway users (Rio Tinto Alcan, Ghana Manganese Company, and others), including contributions to a working group meeting in Accra initiated by Ghana Chamber of Mines during which potential users and financing agencies (EC, EIB, WB) could meet and strategise on the way forward. b. To help revising the terms of reference of the consultant that would prepare the Western Corridor Infra Project towards a stronger project financing approach, c. To provide monitoring assistance during the implementation of this sensitive assignment. 3 JICA has been requested by the Government of Ghana to update the Master plan of Takoradi port. 5
RELATED PROGRAMMES AND OTHER DONORS ACTIVITIES: Autres programmes et activités Identify and describe the link, if any, between the proposed intervention and the activities and programmes of national/regional authorities and other sources of external assistance in the same sector. What is the added value or complementarities with the intervention requested? The following developments related to the Western Corridor Infrastructure have been brought to the attention of the European Commission over the first months of 2006, leading to a political decision to delay the tender launch: - On Thursday 22 June 2006, Alcan and the President of Ghana announced to build a 2 billion US dollars Alumina refinery, with 51%/49% participation in the investment by Alcan and GoG respectively (source (B&FT, 26 June 2006). - CEO of Kampac Oil (Dubai) and Ministers of Ports and Railways and Lands, Forestry and Mines signed a MoU for the rehabilitation of the western railway, with an estimated investment of 1.5 billion US dollars. - Maersk is planning an investment in Takoradi port for modernization and expansion of the container port, including breakwater, deepening of port for sea vessels, etc. - During the President of Ghana last visit to the USA, a MOU for the conduct of feasibility studies on the rehabilitation o railway lines and the rail system of the Western and Eastern Lines was signed between Ghana and SNC Lavalin, a Canadian Construction and engineering company. - JICA has been requested by the Government of Ghana to update the Master plan of Takoradi port. And recently, although not directly related to the Western Corridor: - Ghana/Korea Holder Company has received the green light to begin a feasibility study on the Accra/Kumasi Line. OVI AND SOURCES OF VERIFICATION : Indicateurs vérifiables et sources What is the quantifiable evidence of the results? Project objective(s) / Objectif global Project purpose / Objectif spécifique Results / Résultats Objectively Verifiable Indicators (OVI) Indicateurs objectivement vérifiables (IOV) Sources 6
Using BizClim's expertise and network, in particular to warm up relations with Europe's railway industry (construction/supply) and with potential railway users (Rio Tinto Alcan, Ghana Manganese Company, and others), including the organisation of a conference in Ghana. Partners expressing interest and participating in meetings. Working Group participation To help revising the terms of reference of the consultant that would prepare the Western Corridor Infra Project towards a stronger project financing approach. Draft revised TORs EC Delegation + contractor To provide monitoring assistance during the implementation of this sensitive assignment. Monitoring reports EC Delegation + contractor 7
ACTIVITIES : Activités What are we / they planning to do? If any workshop/seminar, please indicate the number and type of participants expected Si un atelier/séminaire est organisé, merci d indiquer le nombre et le type de participants attendus 1. Working Group meeting (in March 08): It would be the initiative of the Ghana Chamber of Mines to bring together this working group of potential users (RTA, but also manganese, cocoa, and others?) with development partners (e.g. EC/EIB, WB) to strategise on how to bring one common, realistic proposition towards GoG, hoping that such proposition made by credible partners (users and financing, PPP?) would leverage a higher level of GoG acceptance/consistency, also allowing for the detailed feasibility study to take off under our programme. 2. Get some understanding on GoG's position on the railway rehabilitation scheme and the part it is willing to play in the working group. 3. Check the implications of such potential GoG involvement with the progress of key agreements for RTA s bauxite & alumina project 4. 4. April Transport Sector Development Partners Conference (21-23 April 2008): Try to aim to get GoG to refer to the Western Corridor Infrastructure Project in its new context of RTA and other users with DPs and GoG financing, - perhaps even with a carefully prepared joint press release? 5. Project documentation: Prepare material for presentation of the project, i.e. brochure, video, etc. 6. Warm up relations with Europe's railway industry (construction/supply) and with potential railway users (Rio Tinto Alcan, Ghana Manganese Company, and others). 7. Organize an Investor Conference in Accra, Ghana, bringing together key stakeholders and interested parties from Ghana and from outside. 8. To help revising the terms of reference of the consultant that would prepare the Western Corridor Infra Project towards a stronger project financing approach. 9. To provide monitoring assistance during the implementation of this sensitive assignment. 10. Reporting PS: Activities 1 to 3 are to be performed by BizClim s experts. 4 On Thursday 22 June 2006, Alcan and the President of Ghana announced to build a 2 billion US dollars Alumina refinery, with 51%/49% participation in the investment by Alcan and GoG respectively (source (B&FT, 26 June 2006). 8
Inputs: Inputs Indicate the required working days per expert, travel and per diem Indiquer la répartition des jours de travail par experts, les voyages et les per diem Workload Expert 1 Cat. I Expert 2 Cat. I Total expertise Intern. Travel Regional Travel Transport Sector Development Partners Conference 5 5 10 2 -- Project documentation 5 5 10 -- -- Warm up relations with partners 10 10 20 2 3 Investor Conference 10 10 20 2 -- Help revise TORs 5 5 10 2 -- Monitoring assistance 10 10 20 2 -- Reporting 5 5 10 -- -- TOTAL 50 50 100 10 3 ASSUMPTIONS : Hypothèses What external variables could prevent the activity going ahead on time and/or if it does go ahead as planned, what external variables could stop a successful outcome (the result)? Successful implementation hinges on: High level involvement of key stakeholders and interested parties from Ghana and from outside. Good follow-up of by national authorities. 9
IMPLEMENTATION MODALITIES: Number and types of contracts foreseen 1 Service contract ADDITIONAL COMMENTS FROM THE APPLICANT: Commentaires et remarques BUDGET 10
(1)/ For participants not entitled to any per diem, i.e. those whose usual place of residence is in the location where the event(s) will take place. Av. Roger Vandendriessche, 38 BUDGET : What resources will be required for the planned activity (manpower, materials, timing etc)? Who will implement them? Title Unit Quant. Unit price Total Sub-total per contract (euros) (euros) (euros) Implementation modalities 1. Studies 136,700 1 Service Contract - Fees Expert 1 m/days 55 900 49,500 - Fees Expert 2 m/days 55 900 49,500 - Per diem Experts Nights 80 136 10,880 - International Travel Experts Return 10 1400 14,000 - Regional travel Expert Return 3 440 1,320 - Report writing and multiplication Lumpsum 0 1000 - - Folders & writing materials 1 7000 7,000 - Follow up & coordination 1 4500 4,500 2. Conference 20 1 53,670 - Honoraires Contractant 1 10000 10,000 - Remboursables - A. Intern Travels Return 10 1400 14,000 - A. Regional travels Return 5 440 2,200-10% reserve on international travels 1,400 - A. Inter-city transport 5 70 350 - C. Invitations 20 120 2,400 - D. Per diem (1) Nights 70 136 9,520 - G. Hotel reservations 20 0 - - H. Local assistance 1 2500 2,500 - I. Local transport 0 150 - - N. Refreshments, cocktail, etc 60 20 5,300 - P. Proceedings 1 3000 3,000 - P. Visibility 1 3000 3,000 Total without contingencies 190,370 OK Contingencies (5%) 9,519 TOTAL 199,889 11
IMPLEMENTATION PLAN IMPLEMENTATION PLAN TIMETABLE (Main Deadlines in calendar weeks or months) Month 1 2 3 4 5 6 7 8 9 10 11 Mois Activity Activité Working Group meeting (in March 08): April Transport Sector Development Partners Conference (21-23 April 2008) Preparation of project material Warming up stakeholders Investor Conference To help revising the terms of reference of the consultant that would prepare the Western Corridor Infra Project towards a stronger project financing approach. To provide monitoring assistance during the implementation of this sensitive assignment. Reporting 12
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DECISION OF THE VALIDATION COMMITEE Implementation approved Comments and remarks from the Validation Committee Implementation rejected Reason(s) for rejection Name-Position EC/AIDCO/C4 Signature Date Name-Position DG/DEV Signature Date Name-Position ACP SECRETARIAT Signature Date Name-Position ACP SECRETARIAT Signature Date 14