THE SAD STORY OF GHANA RAILWAY COMPANY (PAGE 23, APRIL 29, 2010)

IT will interest many Ghanaians to know that the construction of the Takoradi Harbour, which was opened in 1928, was facilitated by revenue generated by the Ghana Railway Company, which was then known as the Gold Coast Railways.
The fortunes of the railway continued to improve and in the 1950s Ghana Railway was considered to be one of the best railway systems on the African continent.
But the company is now a pale shadow of itself.
At the height of its glory, Ghana Railway carried over two million tonnes of freight and six million passengers in a year.
That was in 1965 when the railway carried 419,330 tonnes of cocoa; 546,460 tonnes of timber; 276,750 tonnes of bauxite; 597,650 tonnes of manganese, and 447,930 tonnes of miscellaneous goods such as fish, agricultural produce and manufactured items.
That indicated a total carriage of 2,288,120 tonnes, including 965,790 tonnes of cocoa and timber.
All that while, the railway was a part of the Civil Service and so all its earnings (mostly surplus) were paid into the national coffers. The railway, therefore, did not control its finances.
Available historical facts indicate that when the decision was taken in 1896 to construct a railway in the then Gold Coast, it was to provide a mechanical means of transporting the heavy mining equipment to mining companies in the Tarkwa area in the Western Region which was attracting considerable attention.
A survey was carried out to locate a suitable point on the coast and in August 1897, Sekondi was recommended as a suitable location for the construction of a railway system to Tarkwa, a distance of 40 miles.
History has it that the construction of a railway from Sekondi began in early 1898 but it had to be suspended due to objections to the selection of Sekondi for the project.
The British Secretary of State in July 1898 held a conference at the Colonial Office with all interested parties and it was decided in the end to adhere to the original proposal of Sekondi as the starting point.
Work was then recommenced in August 1898 with the construction of a base with landing jetties, staff quarters, workshops, running sheds, carriage and wagons sheds, turntables, among others, at Sekondi, which at the time consisted of a few mud houses.
Heavy rains, scarcity of labour and finally the last Ashanti war hampered the progress of the work.
However, at the end of the war in 1900, work was re-started and the railway reached Tarkwa in May, 1901.
Thereafter, the Tarkwa line was extended to Kumasi with construction work begining in June 1901, and reaching Obuasi in December 1902 and finally Kumasi in September in 1903. The first train left Sekondi for Kumasi on October 1, 1903.
The choice of Sekondi for a lighterage harbour was informed by two considerations which were that the initial railway was from the coast to Tarkwa and that it was after the war when Ashanti came under the colonial administration that the extension to Kumasi was considered.
Again, it was considered that traffic volumes were estimated to be light and so a surf or lighterage harbour was favoured.
From the onset, both Takoradi and Sekondi were considered, but it was recognised that Takoradi was a superior location for a deep-water harbour. It was thought then that traffic would not be enough to justify the expenditure involved.
This was, however, proved wrong by the working results of the railway from 1903 until 1928 when the Takoradi Harbour was opened.
The benefit of the railway to the country in its early years is indicated in the table below:

Total Total
Year Revenue Exports Imports

1900 £585,583 £1,294,963 £885,446

1905 £586,221 £1,484,068 £1,646,145

1909 £778,552 £2,394,412 £2,655,573

The revenue consisted of customs and excise duties and other taxes and levies.
Of significance were the total exports which tripled in value six years after the introduction of the railway the major exports were made up of cocoa, manganese and timber.
Statistics from the Public Relations outfit of the Ghana Railway Company (GRC) in Takoradi made available to the Daily Graphic indicated that apart from the increase in trade that the construction of the railway engineered, the working results of the railway showed considerable amounts of excess revenue over expenditure which boosted the national economy substantially as depicted by the table below:

Gross Total Net
Year Earnings Expenses Earnings

1905 £135,000 £82,000 £51,000

1906 171,000 77,000 94,000

1907 166,000 77,000 89,000

1908 151,000 75,000 76,000

1909 185,000 74,000 111,000

1917 494,185 195,479 298,706

1918 456,574 197,518 259,056

1919 672,311 234,230 438,081

1920 706,262 365,309 371,953

1921 706,107 455,249 250,858

1922-23 877,893 398,340 479,553

1923-24 1,012,081 528,530 483,551

1924-25 1,066,560 551,733 514,827

1925-26 1,102,301 568,012 534,289

1926-27 1,156,453 572,882 583,571

With the increase in trade as a result of the railway, it soon became clear that the lighterage harbour in Sekondi and Accra, could not cope with the volume of goods passing through them.
Therefore, there was a clear need for a deep water harbour where ships could berth and discharge or load goods with minimum loss or damage
It is also interesting to note that the first power generating plant in the Gold Coast was installed and operated by the Gold Coast railway in the 1920s at its central mechanical workshop popularly known as ‘Location’ at Ketan, near Sekondi, to primarily supply power to the workshops, and the Takoradi Harbour.
Later power was extended to the Sekondi and Takoradi townships.
The supply of power to the public necessitated the government taking over the power house and supply operation by the newly created Government Electricity Department in 1947.
In railway operations, it is said that 70 to 80 per cent of the infrastructure are imported and therefore, needed imported spare parts to replace or maintain them to function effectively.
Available records indicate that the surplus revenue generated by the railway since its inception in the 1903 was taken for granted and that no provisions were made to modernise the operations of the railway.
As a result of this neglect by successive regimes, since the later part of the 1960s, the railway was starved of essential foreign exchange and local currency needed for the procurement of both local and foreign inputs for normal repairs and replacement works, with the result that the railway equipment, machinery and rolling stock inevitably started to deteriorate.
The vicious cycle that set in affected traffic, which declined as a result of decline in efficiency and reliability of its operations.
So, like any organisation in a state of decline, the best talent started leaving the railway and the skill and brain drain caused untold damage to the system, and the railway was beset by crisis after crisis and its self-regulatory system collapsed with adhocism becoming the order of the day.
The decline of the Ghana Railway was further worsened when in the early 1970s an uncontrolled proliferation of heavy road articulated trucks came in to take over the haulage of cocoa and timber to the ports.
By 1983, the once proud Ghana Railway was down on its knees, and had virtually collapsed and was carrying fractions of what it used to do-a total of 350,000 tonnes of freight and less than two million passengers a year.
In the early 1980s when the then government launched the Economic Recovery Programme, the railway network was recognised as very crucial to the transport needs of the economy.
The rehabilitation of the railway system was therefore, accepted as a very vital and that efforts were made to rebuild the lost capacity of the railway through rehabilitation of infrastructure and acquisition of rolling stock.
The rehabilitation, which was undertaken in phases, commenced in 1983 and by 2003 (20 years later) US$256 million had been invested in the Ghana Railway Company.
With the huge amount of money invested in it, it was expected that the railway system would be resuscitated to function efficiently and effectively to contribute meaningfully to the country’s economic development.
The first phase of the rehabilitation of the railway which started in 1983 covered the Western Railway Line which carried most of the freight and about half of the passenger traffic and it covered the rehabilitation of the track, signals and telecommunication system.
The Public Relations Officer of the Ghana Railway Company, Mr James Abeka-Amuah, explained to the Daily Graphic that the rehabilitation achieved its basic objectives and revived the Western Railway Line.
However, he said, the strategies to attract more traffic received a setback due to acute shortage of locomotives.
That, he said, inhibited the realisation of the full potential of the rehabilitated line.
Mr Abeka-Amuah further explained that by 1998, 10 years after the rehabilitation when new locomotives were procured, the Western line had started deteriorating and could not support the locomotives in operations.
“With the arrival of the locomotives, it was also realised that the wagons for the haulage of bauxite, manganese and timber were too old,” he said, adding that “these wagons, at the time (1998), were between 40 and 45 years old and had outlived their usefulness”.
He said at the same time also, the Ghana Bauxite Company and the Ghana Manganese Company expressed their readiness to export one million tonnes each of the ore and wanted the railway to provide the capacity.
He said GRC accepted the challenge and initiated action to procure 160 high capacity new mineral wagons with funds from the private sector.
Consequently, he said the GRC floated tenders for the financing and supply of the mineral wagons, materials and equipment for the strengthening of tracks and improvement to the signalling and telecommunication system on the Takoradi-Awaso line.
However, he said, the Ministry of Finance indicated that since the loan facility offered by the private sector was non-concessional, and that the Ghana Government could not issue guarantee notes to cover the facility.
Therefore, the effort to purchase new wagons using private sector financing had to be abandoned.
Mr Abeka-Amuah said the Ghana Bauxite Company and the Ghana Manganese Company were then approached and that they offered to assist GRC to procure refurbished wagons and also strengthen some sections of the track from Nsuta to Awaso the two mining centres in the Western Region.
“With no option and imminent collapse starring GRC in the face, the offer was accepted.
“This was in the year 1999,” he explained.
Together, he said, the two companies provided US$7.705 million for the purchase of 125 wagons whose lifespan was 10 years and that the wagons arrived in the later part of 2000 and were immediately put into service.
He said repayment of the loans began in March 2001 and was expected to end in early 2005.
He said another project which commenced in the mid-2000 was the rehabilitation of the 154 passenger coaches purchased from the then German Democratic Republic in 1986.
He said the German government, through KFW, provided five million Deutsche-Marks for the work but it was enough to rehabilitate only 46 coaches.
“As the railway stands now the tracks are weak after the rehabilitation carried out about 21 years ago. The signalling and telecommunication system is nothing to write home about,” he said, adding, “The mineral wagons, with limited lifespan, are not what the GRC would have ordered if it had the free hand to operate. At the moment the passenger coaches are dilapidated and need to be refurbished.”
Mr Abeka-Amuah said after the mineral companies had deducted the loan repayment with interest, the GRC was left with nothing to expend on its operations and also pay workers.
He explained that the vision of the railway was to become the market leader in freight and passenger transport in its corridors of operations.
This, he said, required that the railway was equipped to play a central and positive role in the national economy.
Towards this end, and in order to develop the railway into a commercially viable enterprise, the government proposed to restructure its operations through concessionary arrangements to introduce substantial private sector participation in the management and financing of railway operations, he said.
He said the programme, which was being handled by the Divestiture Implementation Committee, encountered some difficulties which slowed down the negotiations considerably.
He said if an organisation was placed on divestiture, no further investment by the government was allowed, and that with stalled negotiations, no governmental financial support, and low tariffs paid by Ghana Bauxite Company and Ghana Manganese Company and no cocoa to haul.
He noted that significant structural and technological changes continued to take place within the railway industry world-wide.
These changes, Mr Abeka-Amuah said, imposed increasing challenges for governments in the developing countries and call for more capital investment for modification and expansion of railway infrastructure, acquisition of modern locomotives and wagons and improved managerial capabilities.
“The benefits of an efficient railway to a country like Ghana are enormous,” he stressed, adding, “The rail network was designed to provide vital support to the export sector in which commodity export such as cocoa, timber, bauxite and manganese play a dominant role”.
Mr Abeka-Amuah stressed that if greater proportions of cocoa and timber went to the port by rail, they became competitive on the world market because of the railway’s inherent economy of low incremental cost.