Tuesday, May 15, 2012

Govt. reclaims Tema Drydock after 13 years

Tuesday, May 15, 2012
By Edmund Mingle
Government has become the sole owner of the Tema Shipyard and DryDock after reclaiming the 60 per cent shares owned by the Malaysian private partner in the company.

It follows a negotiated agreement between the government, which had 40 per cent and Penang Ship Building Company (PSC) of Malaysia which controlled 60 per cent, in an effort by the government to salvage the company from total collapse.

The move, which was finalized by Cabinet at its meeting on Thursday May 10, comes after 13 years of what is described as gross mismanagement, and labour agitation for the government to take full control of the strategic national asset.

“The decision to urgently salvage such a strategic national asset was taken by Cabinet in the supreme interest of Ghana,” said Koku Anyidoho, Director of Communications at the Presidency, who confirmed the decision of Cabinet.

In addition, he explained that the move to reclaim the shares, which begun which the government took office in 2009, was informed by the need to operate a shipyard and drydock that could serve the sub-region in Ghana’s aim of becoming a sub-regional hub for the oil and gas industry.

With the sea traffic moving in the direction of Ghana, coupled with Ghana’s emerging oil and gas industry, he said he has become critically important that the shipyard and drydock was effectively positioned to create wealth and employment for the nation.
As part of the negotiated settlement, the government is expected to pay Penang gross amount payable to PSC about 6.3million dollars, out of which the private company will pay a capital gain tax of about 0.12million dollars to the Ghana Revenue Authority.
But according to Mr. Anyidoho, the amount paying to the company would pale into insignificance if the revenue expected to be generated for the government through proper management was considered.
In addition to that, he said the revamping of the shipyard would provide sustainable jobs for many of Ghanaians youths who have undergone training for the oil and gas industry, as well as provide the relevant platform for the transfer of skills.
The Tema Shipyard and Dry-Dock Corporation (TSDC) was built in the 1960's during the construction of the Tema Habour as part of the overall infrastructure requirement for the country maritime industry and socio-economic development. It has two graving docks and slip way.
The Shipyard is strategically placed to take advantage of dry-docking and repair needs of ship of up to 100,000 deadweight (DWT) plying the western shoreline of Africa. It was built before the advent of containership and the modern super oil tankers and is capable of docking the largest oil tankers.
Government had earlier last year hinted of plans to reclaim the 60 percent shares in the Tema Shipyard and Dry-Dock Corporation (TSDC) which it divested to the PSC of Malaysia 13 years ago, following the latter's failure to fulfill the goals of the Joint Venture Agreement(JVA) between two parties, signed on November 8, 1996.
According to Alhaji Collins Dauda, Minister for Transport, government's vision of transforming the dry dock into "a modern well-equipped facility to meet the nation's strategic objectives" and for which purpose the facility was divested but has not been met after 13 long years, hence the abrogation of the contract.
"Essentially, the government and Penang agreed that, pursuant to the SPA, Penang will rehabilitate the Shipyard and also procure such funding as is reasonably required by the Company to meet the costs in connection with the rehabilitation and completion of refurbishment of the shipyard. Unfortunately, after 13 years, this important vision of had not been achieved and the goals of JVA have not been met," he said a news conference last September.
In 2009, a Committee of Inquiry headed by lawyer Chris Ackummey, tasked to investigate the dry dock's operations and make recommendations that would lead to improvement in performance, recommended, among other things, that government regains control of the shipyard.
But after many deliberations during which the government took into consideration Ghana's good relationship with Malaysia, the spirit of South-South co-operation and the intervention of Prime Minister of Malaysia, government decided to take a majority stake in the shipyard in order to determine its future direction."
Subsequently, the government set up a negotiating team to explore an amicable resolution of the issues including increasing government's equity shares to at least 60 percent.
After numerous sessions the negotiations reached a deadlocked, principally relating to shareholding structure and management control.
Following representations from the Malaysian Prime Minister to President John Evans Atta-Mills and vice versa and subsequent meetings arising out of the correspondence, it was mutually agreed that the ownership and management of the dry dock should revert to Ghana.

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