ACTIVITY IMPLEMENTATION PROPOSAL

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Towards a private sector enabling environment

Vers un environnement favorisant le développement du

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

ACTIVITY IMPLEMENTATION PROPOSAL

TITLE

Contribution toWestern Corridor Infrastructure Project

AIP Ref.

WP2.28.2-1.013

WP Activity

N°

Contribution to Western Corridor Infrastructure

Project + organisation of 1 conference

Type of activity requested

Financial System

Development at regional

level

Work Programme

Region/country

Finance

Capital Flows

Implementation modalities

Framework contracts

Service contracts

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Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

N

AME OF THE APPLYING ORGANIZATION

:

NOM DE L’ORGANISATION

Delegation of European Commission in Ghana

ADDRESS

:

(Street, Post Code and Country)

ADRESSE (rue, code postal et pays)

THE ROUND HOUSE, 82 Cantonments Road, Cantonments, Accra

P.O. Box 9505, K.I.A., Accra, GHANA -

C

ONTACT PERSON

:

PERSONNE DE CONTACT Mr Paulus Geraedts

F

UNCTION OF THE CONTACT PERSON FONCTION

Head of Transport and Infrastructure Section

E

MAIL ADDRESS

ADRESSE COURRIEL [email protected]

T

ELEPHONE

TÉLÉPHONE Telephone: (233-21) 774094/774202/774236

F

AX

FACCIMILE Fax: (233-21) 774154

S

KYPE (if any)

N

AME OF THE REQUEST TITRE DE LA REQUÊTE

Western Corridor Infrastructure Project

R

EGION

/

COUNTRY CONCERNED

PAYS OU RÉGIONS CONCERNÉS

Ghana

S

ECTOR CONCERNED SECTEUR OU THÈME CONCERNÉ

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)

(3)

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

H

OW 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 ?

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 10th_{EDF flagship project.}

I

S THE PROPOSAL

C

ONSISTENT

,

C

OHERENT AND

C

OMPLEMENTARY WITH OTHER INTERVENTIONS

?

EST-CE QUE LA PROPOSITION EST COHÉRENTE, CONSISTENTE ET COMPLÉMENTAIRE À

D’AUTRES INTERVENTIONS?

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.

E

XPLAIN TO WHAT EXTEND THE PROPOSAL IS SUPPORTED BY KEY STAKEHOLERS

?

EXPLIQUEZ DANS QUELLE MESURE LA PROPOSITION EST SOUTENUE PAR LES

PRINCIPALES PARTIES PRENANTES ?

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

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

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Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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 facilities1, 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 project2.

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 2nd_{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.

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Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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 Takoradi3_{, 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

(6)

Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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

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.

(7)

Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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.

(8)

Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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 project4_.

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.

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).

(9)

Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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

10

2

--

Project documentation

5

10

--

Warm up relations with

partners

10

20

2

3

Investor Conference

10

20

2

--

Help revise TORs

5

10

2

--

Monitoring assistance

10

20

2

--

Reporting

5

10

--

TOTAL

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

.

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secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

IMPLEMENTATION MODALITIES:

Number and types of contracts foreseen

1 Service contract

ADDITIONAL COMMENTS FROM THE APPLICANT:

Commentaires et remarques

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secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

BUDGET : Who will implement

them?

Title Unit Quant. Unit price Total Sub-total per contract

Implementation modalities (euros) (euros) (euros)

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 multiplicationLumpsum 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

What resources will be required for the planned activity (manpower, materials, timing etc) ?

(12)

Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

IMPLEMENTATION PLAN

TIMETABLE (Main Deadlines in calendar weeks or months)

Month

Mois

Activity

Activité

1 2 3 4 5 6 7 8 9 10 11

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.

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Towards a private sector enabling environment

secteur privé

Av. Roger Vandendriessche, 38 1150 Brussels – Belgium Tel : +32 2 777 08 68 Fax: +32 2 777 08 60 [email protected]

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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