Ghana: Port catch-up

Tema, Ghana’s largest port, has made global headlines recently over the “crippling disruptions” caused by an impounded Argentinean military ship blocking a busy berth. The obstruction has come at an inopportune time for Tema, where activity should be ramping up to the peak pre-Christmas period. It also highlights the importance of ongoing efforts to enhance capacity and efficiency both at Tema and Takoradi, the country’s second-largest port.

The Argentine navy frigate Libertad was seized by the Ghanaian authorities after a court passed an injunction from an investment fund allegedly owed cash by the Argentinean government after the latter’s debt default in 2001. Buenos Aires has refused to post a $20m bond to release the ship, and the Ghana Ports and Harbours Authority (GPHA) has said that it does not expect resolution any time soon. As of late-October, most of the Libertad’s crew had been returned to Argentina, but the ship remained in Tema’s Berth Eleven and several other ships were backed up to use the port.

The GPHA complained of “considerable and substantial hardship and financial losses”, and international press reports suggest that shipping firms using Tema might have to divert to other ports in the region, or levy charges that would increase import costs for Ghanaians.

Even before the Libertad situation, Tema was already suffering from congestion during periods of high traffic. A report by UK Trade and Investment earlier this year described the port as being “under considerable strain”.

Meanwhile, traffic at the port continues to increase. Cargo throughput at Tema rose by 26.4% in 2011 to 11m tonnes, while container volumes grew 28.3% to 756,899 twenty-foot equivalent units (TEUs). At Takoradi, port traffic rose 23.2% to 4.94m tonnes, and container throughput was up 6.7% to 56,595 TEUs.

These figures were partly achieved after a previous dip related to the global economic crisis, but initial figures from this year indicate that momentum has been maintained, despite continued international uncertainty. Overall port trade volumes grew 11% in the second quarter to 4.85m tonnes, according to the Ghana Shippers’ Authority, the sector regulator, as reported in the local press. The increase in traffic can be attributed to Ghana’s rapid growth and the related increase in demand for its commodity products, as well as the rise in imports to its fast-expanding economy.

Tema has already made some efficiency gains, thanks in no small part to the involvement of the private sector through Meridian Port Services (MPS). MPS is a joint venture between GPHA (with a 30% stake) and Meridian Port Holding Company, a consortium of Denmark-based APM Terminals and France’s SDV and Bolloré.

The firm operates two of Tema’s 12 berths in a container terminal constructed on a public-private partnership (PPP) agreement. In 2011, MPS handled around 80% of the container traffic at Tema; berth occupancy rose to 78% from 55% in 2004, according to the GPHA. Container vessel time at berth was 32.55 hours in 2011, down from 44.6 hours in 2005, though up from 23.7 hours in 2010.

An increase in maximum vessel length to 250 metres from 230 metres in 2011 was a step in the right direction. However, Tema still lags behind regional competition, such as the ports of Apapa in Nigeria, Lomé in Togo and Abidjan in the Cote d’Ivoire. Tema’s draught of 11.5 metres means that some ships have to call elsewhere first to lighten loads, or avoid Ghana altogether.

To this end, the GPHA has outlined plans for expansion. These include deepening the draught to 16 metres, which would allow access to vessels of up to 10,000 TEUs, and adding seven new terminals, including a container facility and terminals for passengers, “roll on-roll off” vessels, fruit and sugar, and trans-shipment, at a total cost of $1.5bn. While no solid timeline for the development has been announced, the GPHA is likely to seek a PPP for the development.

The expansion of Takoradi, which serves the emergent oil industry, is also progressing. The GPHA has plans for a three-phase, $750m development of the port, and in September, the authority signed a contract with Belgian firm Jan De Nul for the construction of a breakwater, a jetty to handle bulk mineral ores, and for the dredging of the harbour to increase the draught from 12 metres to 16 metres. The GPHA also inked an agreement with the China Harbour Engineering Company for the $150m first phase of Takoradi’s expansion, financed by a Chinese loan. The first two phases, worth an estimated $344m, are expected to take two years to complete.

The Libertad situation has helped to highlight the fact that capacity at Ghana’s ports is tight, particularly given rising traffic driven by the country’s economic success. As improvements made at Tema in recent years indicate – and as Ghana’s tight budgetary position also suggests – bringing in the private sector may be the best way to implement both expansion and improvements in management and efficiency.