Parliament Approves Financing Agreement for Proposed Transport Sector Improvement Project

By Eva Frempon- Ntiamoah

Parliament has approved a financing agreement for an amount of US$ 150 million to finance the proposed Transport Sector Improvement Project (TSIP).

Under the agreement, which is between the Government of the Republic of Ghana and the International Development Association (IDA), the loan has a grace period of 5 years, 20 years of re-payment period, 25 years maturity period and an interest rate of 1.25 per cent per annum.

The objectives of the Project are to support the development of road infrastructure, improve road safety, strengthen the capacity of sector agencies and foster regional integration.

The Project, which is divided into three broad components to be implemented over a six-year period, therefore, aims to reduce travel time on selected parts of the Classified Road Network in Northern Ghana, promote road safety and strengthen the institutional management of the transport sector.

Component 1 (Road Asset Preservation) will support the development of road infrastructure in the northern part of Ghana. The road stretching from Tamale to Yendi and Tatale (about 103km of paved and 67km of unpaved road) will be rehabilitated to improve the road network in the integral part of the Central East-West corridor.

Component 2 (Improved Road Safety) covers activities to be implemented by both the National Road Safety Commission (NRSC) and the Driver and Vehicle Licensing Authority (DVLA).

Component 3 (Institutional Strengthening and Capacity Building) will support an institutional review of sector agencies with the aim of restructuring the road and transport sector.

Presenting the report, Dr Mark Assibey-Yeboah, Chairman of the Finance Committee in Parliament, disclosed that the expenditure to be financed under the Project was inclusive of taxes.

For this reason, he said, government would be able to collect the relevant taxes and duties under the project, unlike some other projects for which government had had to waive the duties and taxes.

The Speaker of Parliament, Rt. Hon. Professor Michael Oquaye, however, raised concerns about the US $4.5m fees allocated to consultancy servicing because it did not add any value to the project.

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