Officials of the Atuabo Free Port Project say they have cleared the hurdles that stood in their way, and that “all things being equal” implementation will commence by the end of second quarter next year.
“We are hoping and praying that we will meet that target, but any changes that occur in the environment will also affect our timetable,” Lawrence Lamptey, Commercial Manager, told journalists in Accra.
“The project will run for twenty-five months, but there are preparatory works going on before the construction begins. So hopefully by the end of second quarter 2015 we will hit the ground running.”
Over 700 jobs will be created during the construction phase, officials of the company say, while some 300 workers will be employed to run the facility — which is aimed at providing support services to offshore oil and gas activities both in Ghana and in the wider West African sub-region.
The US$600million project, which was initially billed to commence second quarter this year, has been held back due to concerns raised by various bodies including the Trades Union Congress — which kicked against the exclusive right given to Lonrho to build and operate the port for twenty-five years initially, but this has been reduced to ten years.
The Ghana Ports and Harbours Authority had also argued that it is the only mandated body to build and operate ports in Ghana, and so did not see why government would give a private firm the go-ahead to do same.
This was followed by a suit filed in a Sekondi High Court by five parliamentarians who questioned aspects of the agreement — particularly clause seven which they said barred the existing Takoradi Port from expanding to also take advantage of oil and gas services.
Once parliament had already approved the agreement, the court — presided over by Justice Ababio — dismissed the case, saying it could not interfere in the legislature’s decision and citing the existence of separation of powers in the country’s statutes.
Initiator of the project Lonrho — a UK logistics company — has a 35% stake while the government of Ghana has 10% carried interest, followed by a 35% interest to be purchased on commercial basis by Ghanaian institutions being coordinated by the Finance Ministry.
The remaining 20% is said to be held by what officials of the company call “other institutional investors”.
Chief Finance Officer of Atuabo Free Port Limited, Reginald Okine, said the chairperson of the port will be nominated by the government of Ghana. As an equity shareholder in the project, government is also expected to earn dividend and royalty payments.
A memorandum of understanding was signed for the project between Lonrho and the government of Ghana in August 2011, under the late President Atta Mills.
In a February interview with the B&FT, CEO of Lonrho Geoffrey White said financing for the project has already been secured; indeed, he said debt equity financing for the project was “oversubscribed” due to investor confidence in Ghana.
No funding, guarantees or subsidies are required from the government of Ghana for the project, he said.
The project offers Ghana a strategic opportunity to become a regional hub for support services in the West Africa sub-region, which is becoming increasingly important for oil and gas production, he added.
La Cote d’Ivoire, Liberia, Senegal and Sierra Leone have all seen increased exploratory activity in recent times.
The Atuabo Free Port will include Logistics supply bases, including warehouses, storage facilities and offices.
It also includes a fabrication yard for sub-sea fabrication companies to build various components for the oil and gas field infrastructure, as well as rig and vessel repair facilities.
According to Lonrho, “The new facility is uniquely located to capitalise on the growth in deepwater exploration in West Africa, with an expected increase of 300 offshore supply vessels in the region over the next five years”.
The company adds that: “Atuabo Free Port provides an attractive location for Ghanaian companies to become involved in the wider West African oil and gas industry and not just the Ghanaian market”.
Phase-one of the project’s development, Lonrho said, calls for an investment of approximately US$600m to construct and equip the free port, which will include local content spending in excess of US$150m.
“The project will stimulate training of Ghanaians to offer the necessary skills for the companies operating at the port,” the company said.