Parliament Approves $243 Million Supplier’s Credit For Purchase Of Trains

Parliament on Thursday, October 8, 2020, approved a $243 million Supplier Contract agreement between the Government of Ghana and Dongfang Electric Corporation for the procurement of Standard Gauge rolling stock (trains) for the rail sector.

While speaking during the approval of the agreement, the Deputy Minister for Railway Development, Andy Appiah Kubi, said in terms of local content considerations, the contractors would be required to provide workshops to rehabilitate railway projects.

“In terms of local content, in this contract, there is the provision for the construction of a workshop to rehabilitate and also to service the equipment that we are procuring and indeed even before that, we as a Ministry finished the construction of the railway school which is affiliated to the Paa Grant University of Mines and Energy. We are also building local capacity to feed into the industry exports of human resources. And we are considering seriously some lines on a BOT basis.”

“So we are considering licensing some local and private interest into the procurement of railing stock for the provision of the rail transportation service.”

About the contract

The contract will be implemented in two phases. The first phase will be completed in two batches within 12 months and 18 months respectively from the date of contract commencement.

Per the agreement, Messrs. Dongfang Electric International Corporation will be procuring the 100% financial solution to execute the contract from the Industrial and Commercial Bank of China (ICBC) Limited or China Construction Bank.

The terms and conditions of the agreement is two years grace period and 10 years of repayment period. The interest rate of the facility is 6M Libor +2.5% p.a. with 12 years tenor.