Worsening Western rail lines impede miners ops

Mr. Johan Ferreira, President of the Ghana Chamber of Mines, says the Western railway line -- the primary mode of hauling bulk minerals to the port -- has deteriorated over the years as a result of infrastructure obsolescence and limited corrective investments.

Consequently, bulk mining companies -- like the other producers of bulk export commodities -- have had to make use of the more expensive road-haulage system. 

Mr. Ferreira speaking at a forum in Accra explained that the Western rail line for instance has been a major problem for bulk producer of manganese and bauxite miners, forcing them to use costly road transport to haul their minerals and equipment.

It is estimated that the cost of road haulage is 50 percent more expensive than the alternative of using railway lines. 

This attenuates the bottom line of the bulk mineral producers, and could threaten the very viability of their business if a solution is not found soon.

President John Mahama, in early 2014, announced his readiness to revive the country’s defunct railway system, commencing with the Eastern and Western corridors lines which are currently in a very deplorable state.

“For any country that intends to develop, the railways system is very important and we cannot continue to carry all cargo by road. This situation is not acceptable,” he said.

“As I speak now, work on the Sekondi and Kojokrom railway line is on track. I have also asked a team, comprising the Ministers of Finance and Transport, to actualise my plans for the railway sector -- which include the construction of a new railway link between Tema and the Boankra Inland Port, and also the Western railway lines from the Takoradi to Kumasi. 

“This is a way of attracting more interest and increasing revenue while connecting with the landlocked countries,” said President Mahama during the state-of-the-nation address.

The Ghana Chamber of Mines has been advocating rehabilitation of the railway system, notably the Western rail lines, as the inherent benefits to the country would be enormous -- given that its services will extend to passenger travel and other sectors of the economy.

 “On two occasions, the Ghana Manganese Company has offered to directly invest in the rail infrastructure; but until now, the authorities are yet to accept the company’s offer,” according to the chamber of mines.

 As a result, the Ghana Bauxite Company has completely stopped hauling goods by rail and solely transports its ore by the less cost-effective road mode, while Ghana Manganese Company uses the rail on a reduced operational level.

 This has adversely impacted realisation of these companies’ strategic objectives.  B&FT has gathered that rehabilitation of the Western railway, which is envisaged under the US$3billion China Development Bank (CDB) loan agreement, will cost an estimated US$400million.

President Mahama in his 2012 state-of-the-nation address pledged a massive revival of the defunct rail system.

“There will be significant improvement in our railway network in the next three years. 

Government believes that the private sector has a role to play in the ongoing modernisation of the rail sector.  

 “Examples are rehabilitation of the Accra to Tema railway network, Kumasi to Ejisu railway line, Accra-Nsawam railway line, and Takoradi to Kojokrom railway network,” he said.   

In 2010 a contract was signed to construct a railway line from Paga (on the border with Burkina Faso) to Kumasi, plus a branch from Tamale to Yendi, but nothing realistic appears to be ongoing.

Operation of the country’s rail lines began in 1898 under the Gold Coast Civil Service, with headquarters in Sekondi.

 The headquarters were transferred to Takoradi after the building of Takoradi Harbour, and railways and ports were jointly administered under the Ghana Railways and Ports Authority.

In 1976, SMC Decree 95 created the Ghana Railway Corporation to separate railways management from ports. The company enjoyed the status of a public corporation until 19 March 2001, when it became a limited liability company. 

 Much of Ghana’s 953-kilometre rail network was built to support agricultural and mining activities in the western, central and eastern zones of the country, but in the last few decades they have failed to yield the impact expected due to their deterioration -- brought about by lack of fresh investment to modernise the system.