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RUEHOU/AMEMBASSY OUAGADOUGOU 0552
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RUEATRS/DEPT OF TREASURY WASHDC
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RUEHLMC/MILLENNIUM CHALLENGE CORP

UNCLAS SECTION 01 OF 02 ACCRA 001515 
 
WHITE HOUSE FOR USTR LAURIE-ANN AGAMA 
DEPT EEB FOR USITC BRENDAN LYNCH AND MICHAEL FERRANTINO 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAIR ELTN ELAB EWWT EINV EFIN KMCA GH
SUBJECT: GHANA TRANSPORTATION AND INFRASTRUCTURE HIGHLIGHTS, 
DECEMBER 1, 2008 
 
¶1. SUMMARY: 
 
¶A. Ghana's civil aviation sector is poised for expansion, based on 
the combination of increased passenger loads and the expected 
increased demand for air travel associated with growth in the oil 
and gas sector.  An infrastructure expansion plan worth USD 122 
million has been approved for three of Ghana's airports. 
 
¶B. At Ghana's main international port, local stevedoring companies 
blocked efforts to improve the port's efficiency, to be accomplished 
by shifting additional cargo handling volume to the contracted 
international consortia Meridian Port Services. 
 
¶C. The Millennium Challenge Corporation Compact is financing the 
14-km George W. Bush Motorway in Accra.  Ghana's parliament also 
approved loans to finance bridges and a municipal water system. 
 
------------------------------------- 
¶A. Civil Aviation: Great Expectations 
------------------------------------- 
 
¶2. (U) The GOG reports over 1 million passengers serviced at Kotoka 
International Airport in calendar year 2007.  The increase in 
traffic was cited in parliament as supporting plans for expansion 
and rehabilitation of airports in Kumasi, Takoradi, and Tamale. 
Ghana has a total of 12 airports, seven with paved runways.  Accra's 
Kotoka, the largest, is Ghana's only international airport. 
 
¶3. (U) Toward the goal of expanding airport facilities, a USD 122 
million loan agreement was approved by parliament, from GK Airports 
Company Limited, Ghana. (NOTE: although ostensibly a Ghanaian 
company, the lender appears to be a joint-venture backed by a 
consortium of Korean firms including Daewoo, Doosan, Rotem, 
Kyungwon, and Bogomulsan.  Canadian investment firm Delamore and Owl 
are also shareholders.  Econoffs are informed that Daewoo will be 
the contractor for this work. END NOTE.)  The reported terms of the 
loan: 7 percent annual interest, a two-year grace period, and a 10 
year repayment period. 
 
¶4. (U) The expansion project includes extending the Kumasi Airport 
runway from 2,320 meters to 3,000 meters, allowing it to accommodate 
bigger aircraft, and to serve as a backup landing facility in the 
event of an emergency at Kotoka.  The loan would also finance a new 
terminal building at Kumasi, including new passenger bridges, VIP 
lounge, control tower, and emeregency response equipment.  The 
runways of the Sunyani and the Takoradi airports would also be 
extended while new VIP lounges would be provided and the control 
towers and fire stations refurbished. 
 
¶5. (U) Like many operations in Ghana, Takoradi airport is 
publicizing efforts to ready itself for expanded business associated 
with the anticipated 'oil boom' in the Takoradi region.  Although 
unconfirmed by econoffs, the media reports that some oil companies 
have received permission to use areas of the airport, and have 
invested in some upgrades including compacting the ground and 
grooving the asphalt extending from landing areas.  Takoradi is 
already hosting helicopter flights from Cote d'Ivoire and Nigeria, 
ostensibly servicing the oil sector. 
 
--------------------------------------------- ----- 
¶B. On the Waterfront: Labor Trumps Port Efficiency 
--------------------------------------------- ----- 
 
¶6. (U) The Ghana Ports and Harbor Authority (GHPA) unsuccessfully 
attempted to shift more cargo handling volume to Meridian Port 
Services (MPS) at the Tema Port, away from local stevedoring 
companies.  Tema Port handles 70 percent of Ghana's maritime 
freight. MPS is a consortia, including 30 percent ownership by 
Ghana's Ports and Harbour Authority, and 70 percent owned by an 
international joint venture between AP Moller Finance (Danish, 46.75 
percent), Bollore (French, 46.75 percent) and Sutton Investments 
(6.5 percent).  In 2002 MPS was awarded a 20 year concession for the 
management, stevedoring and handling of all containers at Tema. 
 
¶7. (SBU) In an effort to boost port efficiency and to phase in the 
full service contract agreement with MPS, the GPHA sought to 
restrict the operations of stevedoring companies to serving only 
 
ACCRA 00001515  002 OF 002 
 
 
vessels with less than 50 containers, from a lesser number of 
berths.  Six stevedoring companies of the Ghana Association of 
Stevedoring Companies (GASCO) sued the GPHA and MPS to restrain the 
GPHA from implementing the MPS element of the service contract.  The 
stevedores argued this decision would hurt their business, since the 
majority of ships berthing at Tema carry more than 50 containers. 
Ghana's nine licensed stevedoring companies, (relicensed annually by 
GPHA) have been in operation since 2001.  GASCO claims the GPHA did 
not take their existence into consideration before signing the MPS 
agreement in 2002, which they complained was not awarded in a 
transparent manner. 
 
¶8. (SBU) In the context of quayside tensions and legal gyrations in 
court, the Minister of Harbors and Railways stepped in on the side 
of the domestic stevedoring companies, with an order to indefinitely 
suspend GPHA's decision.  According to the Special Assistant to the 
Minister, the suspension was merited due to insufficient 
communication of the proposed change by GPHA to the stevedoring 
companies.  Meanwhile, GASCO promised to continue to pursue the case 
in court, despite the Ministry's request that they withdraw the 
case.  COMMENT: The Ministry's handling of the case suggests a 
pre-election sensitivity to harming local industry and workers in 
favor of an international corporation.  END COMMENT. 
 
------------------------------------------- 
¶C. Infrastructure Projects: Fits and Starts 
------------------------------------------- 
 
¶9. (U) Roads: Work on the 14.1 km "George Walker Bush Motorway" 
connecting Accra's Tetteh-Quarshie with Mallam Junction was 
inaugurated on October 29 by Ghanaian President John Kufuor and 
Millennium Challenge Corporation CEO John Danilovich.  A 
construction contract for the first six kilometers (Lot 1) was 
awarded at a cost of USD 42.4 million.  This contract was awarded to 
the China Railway (Wuju) Corporation and is scheduled for completion 
in 30 months.  The Lot 2 construction contract will be awarded in 
early 2009. 
 
¶10. (U) Bridges: The Parliament approved a USD 42 million loan from 
the New York branch of Societe General for the design, supply and 
installation of permanent steel modular bridges across Ghana.  This 
projects aims to correct transportation problems at river crossings 
caused by seasonal flooding and associated damage to roads and 
bridges. 
 
¶11. (U) Water Supply: A USD 92.4 million loan was approved by 
parliament with the Guandong Development Bank of China and BHP 
Paribas for rehabilitation and expansion of the Sunyani municipal 
water system.  The facility includes USD 30 million from the 
Guangdong Development Bank, and USD 62.4 million from BNP Paribas; 
after a 2 year grace period, the repayment term is 8 years.  The 
project will benefit an estimated 350,000 people through increased 
access to water. 
 
TEITELBAUM