Agreement on Bar-Boljare highway construction signed, conditions created for negotiating financial agreement

March 6, 2014

Agreement on Bar-Boljare highway construction signed, conditions created  for negotiating financial agreement

   Author PR BureauPodgorica,


Montenegro (26 February 2014) – Montenegro’s Transport Minister Ivan Brajović and representatives of the Chinese company China Road and Bridge Corporation (CRBC) signed earlier today in Podgorica the Framework Agreement and the Agreement on the project design, construction, and procurement and installation of equipment and materials for the construction of the Bar-Boljare highway, that is the priority section Smokovac-Uvač-Mateševo.

The signing of the agreement was one of the preconditions for starting negotiations with the Chinese EXIM Bank on financial viability of the project, Minister Brajović told the press conference following the signing ceremony.

The agreement on the project design and construction, and the financial agreement with the EXIM bank which is to be signed, as well as the Law on Highway, will be submitted to the Parliament of Montenegro for approval, he explained.

The Government of Montenegro selected the Chinese companies CCCC International (China Communications Construction Company) and the CRBC (China Road and Bridge Corporation) as best bidders for the construction the the 44-km priority section on the future Bar-Boljare highway on 4 July 2013. The offered price for the construction of the priority part of Montenegro’s greatest infrastructural project is EUR 809.577.356,14.



China opens new highway near Arunachal Pradesh border

November 1, 2013


Nearly 1 billion Yuan project comes to light after seven failed attempts over the past 50 years


China on Thursday opened a new highway that links what the government has described as Tibet’s “last isolated county” – located near the border with Arunachal Pradesh – with the rest of the country and will now provide all-weather access to the strategically-important region.

Chinese state media have hailed the opening of the highway to Medog – which lies close to the disputed eastern section of the border with India – as a technological breakthrough, with the project finally coming to fruition after seven failed attempts over the past fifty years.

China first started attempting to build the highway to Medog – a landlocked county in Tibet’s Nyingchi prefecture – in the 1960s, according to State media reports, in the aftermath of the 1962 war with India.

With Thursday’s opening of the road, every county in Tibet is now linked through the highway network, underlining the widening infrastructure gulf across the disputed border, even as India belatedly pushes forward an upgrading of border roads in more difficult terrain.

The official Xinhua News Agency on Thursday described Medog as “the last roadless county in China”. Before this week, Medog was the only one of China’s 2,100 counties to remain isolated from the highway network, according to State broadcaster China Central Television (CCTV).

What the project will do

State media reports have focused on the development benefits that the project would bring and have sought to play down the strategic dimensions. Local officials said the road’s opening will bring down commodity prices and widen access to healthcare.

The road will also provide access to the border county for nine months of the year. That the government was willing to spend as much as 950 million Yuan – or $ 155 million – on a 117-km highway, with ostensibly few economic returns expected, has underscored the project’s importance to State planners.

Local officials said prior to the opening of the highway, reaching Medog required traversing the treacherous Galung La and Doxong La mountains at an altitude of 4,000 metres. With frequent landslides, the road was often rendered impassable.

Now, the road will be accessible for “8 to 9 months per year, barring major natural disasters”, Ge Yutao, Communist Party head of the transportation department for the Tibet Autonomous Region (TAR), told Xinhua.

Work on the 117-km road began in 2009, a year after the project was given the green light by the State Council, or Cabinet.

Renewed attention on infrastructure projects

The opening of the road comes at a time when there has been renewed attention on infrastructure projects in border areas in India and China.

Last week, both countries signed a Border Defence Cooperation Agreement (BDCA) during Prime Minister Manmohan Singh’s visit to Beijing, aimed at expanding confidence-building measures. The agreement calls for setting up channels of communication between military commands, increasing the number of border personnel meetings, and formalising rules such as no tailing of patrols, to built trust and avoid incidents.

The agreement does not specify or limit either country’s plans to boost infrastructure – an issue that, analysts say, has in the past triggered tensions along the disputed Line of Actual Control (LAC), most notably in April when a Chinese incursion sparked a three-week-long stand-off in Depsang, Ladakh.

Han Hua, a South Asia scholar at Peking University, suggested in a recent interview that the “basic reason” for the incident was “too much construction” along the border. The Chinese side, she acknowledged, did not have to build closer to the disputed LAC because their infrastructure, as well as more favourable terrain enabled quicker mobilisation.

“If we don’t have the overall collaboration of the military, policy-makers and decision-makers on both sides,” she said, “it will be difficult to avoid such incidents”.

‘India’s plans will not be limited’

The BDCA, Indian officials said, will not limit India’s plans to upgrade infrastructure. It recognises the principle of equal and mutual security, which allows either side to pursue its security in its own way. At the same time, officials say the BDCA will still help “regulate activity” along the border by opening up new channels of communication, even as the border continues to remain a matter of dispute.

On Thursday, Chinese Defence Ministry spokesperson Yang Yujun told a regular press conference that military personnel would hold “regular meetings” and “make joint efforts” to maintain peace in border areas, following the signing of the BDCA. The agreement, he said according to a Xinhua report, “summarised good practices and experiences on the management of differences in China-India border areas”.


India and China can bond along the Stilwell Road

October 18, 2013

Subir Bhaumik

(Beijing hopes that India…)


During Chinese Premier Li Keqiang’s India visit in May, India agreed to “explore the possibilities of the proposed Bangladesh-China-India-Myanmar (BCIM) economic corridor” with China. But New Delhi is going slow on this. When Prime Minister Manmohan Singh visits China this month, the Chinese will push for the BCIM plan. China has already been in discussion with Myanmar and Bangladesh to take this forward. During Singh’s Beijing visit, China will also offer to declare Kunming and Kolkata as sister cities to carry forward the process.

 It is New Delhi and not states in the east or north-east that fear Chinese trade and investments along the corridor. This trade can only boost their economies. The opening of the Stilwell Road, built during World War II, is a case in point. Assam’s industry minister Pradyut Bordoloi and Arunachal Pradesh’s former governor J J Singh have been enthusiastic about opening the road to China-India trade. Unlike the Nathu La pass in Sikkim, the Stilwell Road is capable of handling 20-25 per cent of Sino-Indian bilateral trade. But a powerful defence-commerce ministry lobby has blocked it all these years.

China has modernised its part of the road and its companies are doing that in Myanmar now. Only 66 km of the road falls in India — so, if the Chinese army uses it to amass troops on the Indian border for a surprise offensive or dump their products in a trade war, they can do it even if India does not formally open the road. Also, trade with India via Arunachal Pradesh will immediately stop all claims of that region as “southern Tibet”.

Note how quickly China shed its reservations on Sikkim, after trade resumed through the Nathu La pass. JJ Singh, a former army chief, advocated an Indian presence on the road for pragmatic reasons, but that did not help with the mandarins in Delhi. So, an alternate route was chosen for the BCIM car rally in February-March: it started at Kolkata, passed through Bangladesh and India’s north-eastern states of Assam and Manipur, and ended in Kunming, Yunnan via west and north Myanmar.

Now, China wants the car rally route to be converted into the BCIM Friendship highway and turned into an economic corridor with industries, trading entrepots and tourism infrastructure developed around it. This is an excellent idea. Large parts of China, contiguous with south Asia, are landlocked. The Strait of Malacca is a choke point that China wants to bypass through overland trade through Myanmar, Bangladesh and the north-east. Beijing wants to transform BCIM into a live regional grouping to integrate the two most populous nations of the world and use the Bangladesh-Myanmar corridor to help Chindia draw south-east Asia into the world’s strongest future economic bloc. Beijing hopes that India sheds its fear of encirclement by China and creates a win-win situation for both countries in Asia, from south-east to west.

India, especially its eastern and north-eastern states, would stand to gain much more economically by higher trade and connectivity with China and the rest of Asia. On the other hand, there is no material gain if India acts as a pivot for American interests in south Asia.

A formal push for the BCIM during Manmohan Singh’s China visit may boost investments and help chief ministers or industry ministers in the east and north-east to showcase their states to Chinese investors. If the home ministry can waive its objections and agree to allow Chinese telecom majors like Huawei to invest in the Delhi-Mumbai Industrial Corridor or the Indian embassy in Beijing can rope in huge Chinese investments for Andhra Pradesh, the east and north-east should not be deprived because the region has a long border with China.





CPI: Mutually Beneficial and Double Winning China-Myanmar Myitsone Hydropower Project

October 10, 2011

On September 30, some media reported that the Myanmar government will suspend the construction of Myitsone Hydropower Project in upstream Ayeyawady River, which caused extensive attention from media both home and abroad. With many questions, we interviewed Mr. Lu Qizhou, President of China Power Investment Corporation.
Q: President Lu, lately we noticed in the media that the Myanmar government will suspend the on-going Myitsone Hydropower Project. As China Power Investment Corporation (CPI) is the main investor of this project, can you tell the public what really happened?
A: I also learnt about this through the media and I was totally astonished. Before this, the Myanmar side never communicated with us in any way about the “suspension”. Ever since CPI and Myanmar Ministry of Electric Power No. 1 “MOEP (1)” signed the MOU in December 2006, CPI has always followed the principle of mutual respect, mutual benefit and win-win result and established a Joint Venture with the Myanmar side, strictly observed the Chinese and Myanmar laws and regulations, diligently fulfilled our duties and obligations, and proceeded according to the operation mode of international BOT project. In March 2009, the Chinese and Myanmar governments signed the Framework Agreement on Joint Development of Hydropower Resources in Myanmar, explicitly supporting CPI in developing the upstream-Ayeyawady hydropower project.
We hired topnotch hydropower design institutes, research institutes, consultancies and authoritative experts in China to carry out planning, design, specific study, consultation and supervision for the upstream-Ayeyawady hydropower project. Changjiang Institute of Survey, Planning, Design and Research is responsible for the planning of upstream-Ayeyawady basin and the design of Myitsone Hydropower Project. It is also the institute that designed China’s Three Georges Project. When we proceeded with Myitsone Hydropower Project, technical documents were consulted and reviewed by authoritative organizations and experts, and passed review organized by MOEP (1). Therefore, all legal documents, including the application for approval, signing of Joint Venture agreement, business license of the Joint Venture, investment permit, concession rights and legal opinion of the Judge are all in strict compliance with procedures of Myanmar. So far, all legal supporting documents for Myitsone Hydropower Station are complete for both countries. This is to say that the upstream-Ayeyawady hydropower project including Myitsone Hydropower Station, for which CPI is responsible for development and construction, is a major project approved by Myanmar government and has strictly performed all legal procedures in China and Myanmar. In February this year, Myanmar’s Prime Minister urged us to accelerate the construction when he inspected the project site, so the sudden proposal of suspension now is very bewildering. If suspension means construction halt, then it will lead to a series of legal issues.
Q: How did CPI participate in the construction and development of Myitsone Hydropower Station in the first place? What’s the status quo of the project? If the project is suspended, what impacts will be caused?
A: Hydropower is the technologically most proven and most economic renewable energy today. The average development of hydropower in developed countries is already above 60%, 72% in America, 67% in Japan, 90% in France, 95% in Italy and over 60% in Norway. Hydropower development rate reaches 50% in China now, and is planned to reach about 75% in 2020. With a total hydropower resource of over 100GW, Myanmar is one of the few countries in the world that have abundant hydropower resources, but the current rate of development and utilization is only 2.45%, which is in extreme disproportion to the resources it possesses. In particular, as the upstream-Ayeyawady hydropower project is located near the China-Myanmar border, developing hydropower resources here not only can meet Myanmar’s power demand for industrialization, but also can provide clean energy for China. It is based on this consideration that we decided to invest in this mutually beneficial and double winning hydropower project.
Myitsone Hydropower Station that people are concerned about is the largest station in the river basin and started construction in December 2009. Currently, resettlement in the dam area of Myitsone Hydropower Station has completed, site preparations (access road construction, water supply, electricity supply, communication and site leveling) have started on full scale, on-site facilities including access road, water treatment plant and oil warehouse have taken primary form, the cross-river bridge downstream of the dam is under construction, and excavation for the main spillway and diversion system has also begun.
Since the inauguration of the Myitsone Hydropower Project, huge sum of money has been invested. If the project were suspended, the loss would go far beyond direct investment and financial expenses. There would also be tremendous amount of default claims from contractors, serious inability of electricity generation of the Construction Power Plant, huge increase of basic investment spread to other cascade power stations, and so on. As a result, the goal of completing the upstream-Ayeyawady hydropower project in time will not be achieved, causing immeasurable losses to both China and Myanmar. At the beginning of this year, Myanmar and China reached an agreement and relevant banks of both countries signed a RMB loan agreement. To guarantee repayment, the Myanmar government has secured its shares in Myitsone Hydropower Station and taken its expectant revenues as the main source for loan repayment. If the construction of Myitsone Hydropower Station were suspended, that would seriously impact the implementation of loan agreement.
In my opinion, having undergone sufficient scientific proving and fulfilled stringent legal procedures of both countries, Myitsone Hydropower Station is sure to withstand the test of history. I strongly hope that with unremitting efforts of relevant parties, this project can smoothly move forward on schedule, and mutual benefit and win-win result will become a reality for China and Myanmar.
Q: Some reports pointed out that the project will only bring economic benefits for China. What’s your comment on that?
A: This viewpoint is extremely wrong. People who hold such a wrong viewpoint either don’t understand the situation or have ulterior motives. Regarding infrastructure, it is an international practice to implement BOT mode. According to our BOT agreement, upon completion of the upstream-Ayeyawady hydropower project, CPI will be responsible for operation for 50 years, after 50 years the project will be transferred to the Myanmar government free of charge.
Either in terms of direct economic benefit or indirect profit, the upstream-Ayeyawady hydropower project will significantly boost the fast development of economy and society in Myanmar. In terms of direct economic benefit, when the several hydropower stations in upstream-Ayeyawady basin, including Myitsone Hydropower Station, are completed, Myanmar government will gain economic benefits of USD54 billion via taxation, free electricity and share dividends, far more than CPI’s return on investment during our operation period. In particular, as the design life of the project is over 100 years, when we transfer it after 50-year operation, the Myanmar government will have a fixed assets increase worth tens of billions US dollars, in addition to hundreds of billions US dollars of direct economic benefits. Of course, the premise is that US dollar is not depreciated.
In terms of indirect profits, first of all, the construction and operation of high-grade and large-capacity power station will rapidly improve the power equipment in Myanmar and cultivate a large group of professionals in power construction, operation and management. As a result, Myanmar’s electric industry will realize leapfrog development, providing strong power ensurance for its economic and social development. Second, when Myitsone Hydropower Station is completed, it will effectively control and reduce the flood peak, raise the anti-flooding standard in downstream area, and reduce life and property losses caused by downstream flood on people living on both banks. The anti-flood capability of Myitkina will be enhanced from once in 5 years to once in 20 years. Third, 750km road and a large number of hydrological, meteorological and seismic observation stations will be built for upstream-Ayeyawady project accordingly. Those infrastructures will definitely create opportunities for the local area to attract business and capital and improve people’s livelihood. Fourth, during the construction peak, more than 40,000 workers will be needed, considerably increasing local job opportunities. At present, there are altogether 2000 Myanmar workers on the construction site of upstream-Ayeyawady project, including 1400 Myanmar workers on the Myitsone Hydropower Project site. By directly participating in the construction of upstream-Ayeyawady project or providing relevant services for construction personnel, local residents have considerably improved their own economic and living conditions.
Q: Some people worry that construction of the dam will lead to such major hazards as flood and earthquake. Is there sufficient guarantee for dam safety?
A: As far as I know, in the more than 100-year history of hydropower development, no flood or destructive earthquake has ever been caused by dam construction. CPI is a responsible super-large energy enterprise with 18GW operating hydropower capacity in China. We are able to ensure the safety of dam construction. During the design and construction of Myitsone Hydropower Station, we involved topnotch experts and teams in China, who have designed more than 200 hydropower stations, including Shuibuya Hydropower Station with the world’s highest concrete face rockfill dam and Malaysia’s Bakun Hydropower Station. Repeated proving of the seismic safety evaluation of Myitsone proved the absolute safety and reliability of the project engineering scheme. The Myanmar government also organized famous consulting organizations and experts from Switzerland and Japan to prove that over and over. Both parties agreed that there was no seismic safety issue for Myitsone Hydropower Station.
The seismic design of the dam in Myitsone Hydropower Station follows the standard of fortification intensity 9, which is higher than fortification intensity 7 of Zipingbu Hydropower Station that has withstood the Wenchuan earthquake in Sichuan. To further fortify the overall seismic performance of the dam, we applied reinforced concrete grating to the top of downstream dam slope and implemented other seismic fortifying measures. In case of emergency, the surface and middle discharge orifices on the spillway can be used to rapidly lower the reservoir water level and ensure dam and downstream safety. We will build 25 digital remote control seismic monitoring stations in the reservoir area and arrange more than 700 safety monitoring instruments all over the dam in accordance with the safety monitoring standard applied to the world’s highest concrete face rockfill dam so as to keep a close eye on the dam’s working conditions during operation.
The anti-flood standard of the Myitsone dam is designed as once in 1000 years and ratified with once in 10000 years to ensure safe operation.
Q: Environmental protection has been a hot topic in hydropower development. Few western NGOs criticized that the project would seriously damage the environment. How do you respond on this?
A: I would like to ask: Did these organizations ever help Myanmar to develop economy when the Myanmar people were in most difficult situation? But now, with the slogan of ‘protecting the benefits of the Myanmar people’, these organizations are disturbing the Myanmar government to carry out economic project development to improve people’s livelihood. I don’t know what their real purposes are?!
Any human activity would cause some impacts on the environment, including power generating activities. Hydropower, thermal power, nuclear power, wind power and solar power generation would all impact the environment somehow. Striving to reduce the negative impacts caused by human activities on the environment is necessary for sustainable development. During the 100 years that the mankind develop hydropower, their awareness of environmental protection has been deepening, and their ability in that has also continuously improved with technological progress. It has become a common consensus that hydropower is the only renewable energy suitable for large-scale development now.
The Hoover Hydropower Station in America has been operating for 80 years now. It not only turns 700,000-hectare desert in western America into fertile farmland by providing reliable water source, but also creates the new city of Las Vegas. The Itaipu hydropower station jointly developed by Brazil and Paraguay has also played a significant role in the economic and social development of both countries. CPI’s successful development of cascade hydropower stations in upstream Yellow River has not only provided a great deal of economic and reliable clean energies, but also ensured non-stop flow in the middle and lower reaches of Yellow River for the past 10 years. All these projects have impacted local environment in varying degrees, but their positive effects on local economic and social development is self-evident and indisputable.
CPI attaches great importance to environmental issues during project development, and started environmental impact assessment at the very beginning of project planning.
Regarding vegetation, we entrusted over 100 experts from China and Myanmar to conduct environmental impact assessment of the basin, some of them from Myanmar NGOs. According to site investigations, native vegetation only accounts for a small part in the flooded area, and the flooded land only accounts for 1.4% of the whole basin area. Besides, protected plants that are flooded are widely distributed outside of the reservoir area, so bio-diversity will not be impacted.
Regarding intrusion of seawater, after the reservoir begins storing water, average flow will be reduced by 3.5% in flood season and increased by 16% in dry season. Therefore, there is no possibility of seawater intrusion during flood season. Meanwhile, it can also help prevent seawater intrusion during the dry season. It is also good for navigation, flood control and irrigation in the downstream.
Q: Resettlement is also a hot topic in hydropower development. Resettlement work relates directly to the subsequent living quality of the migrants. What have you done in that regard?
A:The Myanmar government attaches significant importance to resettlement for the upstream-Ayeyawady hydropower project, and has effectively led and organized the planning, design and implementation of resettlement. They solicited migrants’ opinions for several times regarding type of houses and subsidies for relocation, and eventually selected 2 resettlement locations with convenient traffic, good environment and favorable terrain for migrants from the Myitsone dam area. According to the agreement, we assisted in the resettlement work and proactively fulfilled our social responsibilities and obligations, while fully respecting local religion, ethnic customs and the wish of migrants.
The basin that upstream-Ayeyawady project is located features a typical terrain of high mountains and river valley. When the power stations are completed, flooded area only accounts for 1.4% of the whole basin area, and less than 20000 people have to be relocated because of the cascade hydropower stations in the basin.
There are 5 villages in the dam area of Myitsone Hydropower Station, totaling 2146 people of 410 households. The houses we provided for migrants are 2-storey wood-and-brick structure, and we provided each household with 100,000-Kyat living subsidy, a 21-inch color TV and other living necessities. We also reasonably subsidized migrants for their private orchids and economic forests. Compensations for the dam area amounted to billions of Myanmar Kyat and were all distributed into migrants’ hands. In order to ensure the subsequent lives of migrants, we newly reclaimed 440 acres of land, and distributed money to every household for land leveling related expenses, rice for a year, 30 kilo rice seeds and 50 kilo fertilizers. At the same time, all infrastructures such as schools and hospitals are concrete structure, and all students are provided with textbooks, uniforms and stationery. Auxiliary facilities including high-standard religious venues, police stations, firefighting and administration buildings, post offices and markets are set up, 20km concrete road is built, and steady water and electricity is supplied for communities. Resettlement has been completed now, and living standard of the migrants has been greatly improved compared with before, so they are satisfied with their current living conditions.
We will fully draw on our experience in resettlement of dam area for the resettlement in Myitsone reservoir area to make it more rational and feasible. Flooded roads and bridges in the reservoir area will be rebuilt on the principle of “equal or superior to former standard” so as to meet the traffic requirements of local residents.
We also attach great importance to long-term assistance to the migrants. We have set about planning and building animal breeding and vegetable growing bases in the basin, hire local people to provide logistic services for project construction, with the aim to create more and better jobs and ensure the sustainable development of migrants.
There are two old sayings in China. One is “seeing is believing” and the other “he is wise who is open to all opinions, but a fool who only believes what he wants”. I believe all of you will come to a just and objective conclusion with awareness of the real situation.


Chinese firm offers to finance Lamu port plan

October 3, 2011

President Kibaki points to a map of the Lamu-South Sudan-Ethiopia corridor project at the KICC in Nairobi on July 26 as PM Rail Odinga and Transport minister Amos Kimunya look on. Photo/STEPHEN MUDIARI

President Kibaki points to a map of the Lamu-South Sudan-Ethiopia corridor project at the KICC in Nairobi on July 26 as PM Rail Odinga and Transport minister Amos Kimunya look on. Photo/STEPHEN MUDIARI

A Chinese company has expressed interest in financing the construction of Lamu Port and its related infrastructure.

The firm, JS Neoplant Company Limited of Shanghai, has said it is “ready, able and willing” to undertake the massive project whose cost had been estimated at US $16 billion (Sh1.4 trillion).

According to the communication, the six components of the project include a sea port straddling some 750 acres of land with 10 container terminal berths and three bulk cargo terminal berths, an oil jetty and an international airport with a 2,000 person-per-day capacity on 10 daily flights.

Other components are a three-limbed 1.4m gauge railway line for high speed trains: the limbs are Lamu-Isiolo-South Sudan (1,400km); Nairobi-Isiolo-Moyale-Addis Ababa (1,596km) and Lamu-Mombasa (350km).

The pipeline too had three phases: South Sudan border-Lamu-Isiolo (1500km); Nairobi-Isiolo-Moyale-Addis Ababa (1400km) and a branch to link Lamu to the existing Mombasa/Kampala pipeline.

The project also includes three stretches of highway: Lamu-Isiolo-South Sudan border (1400km); Nairobi-Addis Ababa (1596km) and Lamu-Mombasa (320km).

A fibre optic cable running along the highway completes his gargantuan regional project.

Last month, President Kibaki gave an indication of the impending commencement of the construction work with a promise to undertake a ground-breaking ceremony “soon”.

“The feasibility study for Lamu Port and supporting infrastructure is now complete… I look forward to soon undertaking the ground-breaking ceremony for the project,” point he said in Mombasa a week ago when he visited the town to open this year’s Agricultural Society of Kenya show.

President Kibaki mandated Kenyan ambassadors to aggressively market the proposed second transport corridor that would serve Ethiopia and South Sudan.

Several countries including Canada, Germany, China, Japan and United Arab Emirates have made inquiries since the government declared its intention to construct the corridor about three years ago.

The corridor has immense political and economic potential and will open up large sections of the country’s North Eastern and Eastern provinces that have for years enjoyed scant attention in terms of business opportunities.

“I urge you to focus some energy on promoting investment in this project in your respective areas of accreditation, as it is expected to play a major role in catalysing Kenya progress towards the achievement of the economic goals,” Mr Kibaki told the ambassadors.

Japan Port Consultants has completed a one-year feasibility study on the development of the port and Lamu-South Sudan-Ethiopia Transport corridor.

With the anticipated entry of South Sudan and even Sudan into the East African Community, estimates put unrestricted demand of cargo rising by more than 32 million tons per annum – far above what Mombasa Port alone can handle.

South Sudan has always relied on Port Sudan in Sudan to the north.

The Ethiopian market, the other target, is currently served by Djibouti port. Lack of good roads connecting Kenya and Ethiopia, with a population of 80 million, has hampered the trade between the two nations.

Ethiopia’s dependence on imported goods has meant that Djibouti port handles 98 per cent of Ethiopian traffic which is about 85 per cent of all the traffic in through the port.


Parliament Approves $3bn Loan From China

August 29, 2011

After weeks of heated debate both in and outside Parliament, which was characterized with acrimony and name-calling, Parliament Friday approved the $3billion Chinese loan to finance infrastructure development under the Ghana Shared Growth and Development Project (GSGDA).

The House was specifically recalled from recess to give its approval to the report of the Joint Committee on Finance and Poverty Reduction which dealt with the document after it had been referred to it by the Speaker on Thursday, August 25, 2011 before the House went on recess.

By far the facility is the largest single loan that had been contracted by any government since the country attained independence in 1957 and the government had not hidden the fact that the facility would contribute to provide a comprehensive and accelerated infrastructural development across the country.

During the debate, contributors from both the Majority and the Minority sides of the House acknowledge the fact that the country would need between $1.5 to $2 billion annually to fill the gaps in the country’s infrastructural deficit.

And while both sides were of the opinion that the project was a good one, the Minority express reservation about the contents of the Master Facility Agreement (MFA) and the fact that the subsidiary agreements were not made available to the House for consideration alongside the MFA.

With these disagreements and reservations, it was therefore not surprising that when the First Deputy Speaker, Mr Edward Doe Adjaho put the question after a heated, which lasted for nearly four hours, the Minority side sat quietly while the Majority side approved the agreement with a loud “hear, hear”.

The road to the passage was not all rosy as the Minister of Finance and Economic Planning, Dr Kwabena Duffour had to withdraw the original document Thursday and replace with a new one which catered for some of the concerns that were raised by the Minority.

In the new agreement, the concern of the Minority that there was gaps in the agreement such as “to be agreed” or “to be inserted” in certain clauses were filled paving the way for the debate on the motion today.

Contributing to the debate, the Minority Spokesperson on Finance, Dr Anthony Akoto Osei intimated that in principle his side supported the initiative by the government since it was a fact that Ghana needed between $1.5 billion and $2 billion annually to fill its infrastructural gap.

He, therefore calmed the nerves of the chiefs of the Western Region explaining that the Minority was not against the development of the area as MPs from the region had portrayed.

Dr Akoto Osei said notwithstanding that it was important for the country to be vigilant to avert a situation whereby the benefit of the oil revenue “appears to go to our benefactor as far as this loan agreement is concerned”.

He referred to the STX Housing agreement adding that what had charaterised it of late was a clear indication that the House should had listen to the advice of the Minority during the debate to approve the deal.

“Mr Speaker, we should learn a lesson from that experience”, he said and cautioned the Speaker to be mindful of that fact he was presiding over the approval of a loan that would have a far-reaching implication on the country.

He stated that the gap that were filled in the new document were not the concerns of the Minority explaining that the approval of the MFA would mean the payment of $37.5million.

Dr Akoto Osei said it was unfortunate that the committee did not discuss the terms of the agreement and pointed out that the terms in the MFA document were different from what was contained in the report of the committee.

Other contributors from the Minority side included Mr Dominic Nitiwul (Bimbilla), Mr Simon Osei-Mensah (Bosomtwe) and Mr Ignatius Baffuor-Awuah (Sunyani West).

Referring to a Daily Graphic publication, Mr Nitiwul expressed concern that while the Dr Duffuor had told the President that funds had already been sought for the Achimota-Ofankor Road, the same project had been catered for in the MFA.

He pointed out that even though some facilities with the agreement were to be implemented on the Build, Operate and Transfer (BOT) basis, some allocations had been made for them.

For his part, Mr Baffour-Awuah argued that said the agreement would commit the country to use the chunk of the oil revenue to repay the facility, it was important for the country to hasten slowly since the oil revenue could be used to finance the projects gradually.

Contributors from the Majority side included Mr Moses Asaga (Nabdam), Mr Haruna Iddrisu, Minister of Communications and MP for Tamale South, Mr Emmanuel Armah-Kofi Buah, Deputy Minister of Energy and MP for Ellembelle and the Deputy Minister of Finance and Economic Planning, Mr Seth Terkper When he took his turn, Mr Buah told the House that the use of part of the loan for the development of the gas infrastructure was a welcome news.

He explained that since gas was cheaper, it was the commodity that would be the driving force of the country’s industrialization.

“Mr Speaker, we should rather commend the President for the urgency that he is attaching to the development of the gas sector”, he said adding that now was the time and that the country could not wait any longer for the development of the its gas infrastructure.

For Mr Asaga, he urged MPs from the Minority side to support the approval of the agreement arguing that the numerous project that would be embarked on in the region would provide employment for the people.

For his part, the Terkper explained that the MFA was rather favourable now that the country was considered as middle-income earner and urged the MPs to support its approval.

When he took the floor, the Minority Leader, Mr Osei Kyei-Mensah-Bonsu questioned whether the Minority was asking for too much by demanding for a better due diligence to be done before the approval of the agreement.

“Even though the proposal is good some aspect of the agreement stinks. We cannot join hands with the Majority to approve this facility in its present state”, he said and called on the Minister of Finance to take back the document and do a better feasibility before the agreement could be approved.

When he caught the eye of the Speaker, the Majority Leader, Mr Cletus Avoka stated that “we need to congratulate the President for his courage to go for such a facility”.

He stated that “if we look at some of the critical developmental challenges facing the country, we should be bold to bite the bullet”, he said.

Mr Avoka added that it was because of country’s credibility rating that had enabled it to be considered for such a facility and called on Mps from both side of the House support its approval.

Winding up the debate, Dr Duffuor thanked the MPs for their inputs and promised that such suggestions would help to enrich the implementation of the project.

“The facility is the cheapest loan on could get in the world. We have taken into account all the concerns expressed by the Minority and have no doubts that all of you will support the motion on the floor”.

He assured the House that the STX project was not in danger”.