Komenda Sugar Factory to resume operation without new concessionaire
Adnan Adams Mohammed
In spite of Cabinet’s approval of Park Agrotech Limited, a
Ghanaian company in the agribusiness sector, as the preferred strategic
investor for the Komenda Sugar Factory, the contract is not yet to be in force
as its awaits the government to put in place a sugar policy to guide the
operations of the factory.
As the defunct factory is expected to begin operations later
this month, the Trade Minister, Alan Kyerematen has informed Parliament that,
there is the need for all stakeholders to exercise patience as the sugar policy
is being drafted to enable the concessionaire take over fully.
The Komenda Sugar Factory, which was built at a cost of $35
million from an Indian EXIM Bank facility, was inaugurated by then President
John Mahama in May 2016, amid pomp and pageantry but was locked after a few
test runs. The factory was also expected to generate energy for its production
activities and produce by-products such as molasses for the alcohol
industry.But many challenges, including the unreliable supply of sugarcane for
continuous processing after the preliminary test run, hampered the operations
of the company. However, in November 2017, the Akufo-Addo government initiated
processes to revive operations of the factory.
“Mr Speaker, following the approval by Cabinet as required
by conventional practice, the Transaction Advisors entered into final
negotiations with the successful bidder with the view to entering into
concession agreement for the operations of the Komenda Sugar Factory,” Mr
Kyerematen told Parliament last week. Adding that, “The factory was not handed
over to the concessionaire for commencement of operation after the farmers
negation with the concessionaire.”
He further explained that, “It became obvious that unless
there is a sugar policy which will provide the strategic framework for the work
of the concessionaire it wasn’t going to be possible for us to complete the
process of handing over the factory to the concessionaire. So, it only stands
to reason that we go through the process.”
The Minister said over the first three years of the agreement,
Agrotech would invest $28 million in capital expenditure and working capital,
including paying an annual concession fee of US$3.3 million for a period of 15
years.
Also, a $24.5million Indian EXIM Bank credit facility was
being sourced to develop and implement a plantation and out-grower scheme in a
bid to provide raw materials for the factory.
Under the scheme, some 14,100 acres of sugar cane would be
cultivated to feed the plant.
Agrotech is expected to work with STM Projects Limited, an
Indian company with extensive experience in the management and operation of
Sugar Mills and plantations both in India and other parts of the world.
The Agreement would be effective upon completion of
Condition Precedent, which includes the approval of the Agreement by
Parliament, adding that the required documentation would be brought to the
House in due course.
The Minister said during the final negotiations it became
necessary for action on the implementation of the project to be delayed until
the finalization of the National Sugar Policy, which was intended to provide
the strategic policy framework for the implementation of the project.
He explained that after series of extensive stakeholders’
consultations, the National Sugar Policy was finally approved by Cabinet in
2019”.
Mr Kyerematen also stated that the approval of the Sugar
Policy paved the way for the Concessionaire to be formally introduced to the
Chiefs and Elders of the Komenda Traditional area in November, 2019.
He informed the House that the formal agreement between Park
Agrotech Limited and Komenda Sugar Development Company Limited had now been
executed.
He assured the legislature that as soon as the restrictions
on foreign travels arising from the Covid-19 pandemic is lifted and the
necessary protocols and approvals have been secured, the technical partners of
Park Agrotech would begin a comprehensive programme to bring the sugar factory
back to life.
“I wish to assure this august house that as soon as the
restrictions on foreign travels arising from the Covid-19 pandemic is lifted
and after all the necessary and relevant protocols and approvals have been
secured, the technical partners of Park Agrotech will begin a comprehensive
programme action to bring the Komenda sugar factory back to life,” he said.
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