Government has signed its first off-taker agreement for rail freight services between the Ghana Railway Development Authority and MEX Logistics, a move the Minister of Transport, Joseph Bukari Nikpe, says will decongest roads, cut logistics costs, and make the rail sector profitable.

Speaking at the signing ceremony in Accra, the minister said the agreement marks the first time in Ghana’s history that a fleet rail service will directly connect the ports to industrial areas.

Nikpe said when the NDC government took over, “there was no single rail line running.”

He recalled that President Mahama had secured financing from the Indian Ex-Im Bank in 2015/2016 for the Tema-Akusombo/Tema-Mpakadan line, but “for eight years of MPP in government, they could not finish that rail line.”

He also noted that the Kojokrom-Takoradi-Ade to Sekondi passenger line, which was revamped and commissioned by President Mahama in 2016, broke down in 2023.

“To our return, His Excellency the President directed and supported us to bring back the rail services to life in this country,” he said. 

He added that Tema-Mpakadan is now operational for passenger service, moving about 7,000 passengers per week, while the Kojokrom-Sekondi-Takoradi-Ade line has also been revived.

The Minister stressed that passenger services alone cannot sustain the rail sector.

“Because the income from that service would not be enough to sustain the rail services. And that is why over a year ago, we decided to put in work... to introduce these fleet services, cargo services in the rail sector,” he said.

He said the new cargo service will help decongest the ports and roads, reduce delays, and bring down the cost of doing business for traders and industries.

Responding to critics who described the locomotives as “toy fleet for museum,” Hon. Nikpe hit back:

“It is unfortunate that a system that could not even operate passenger rail or line today has the nerve to criticize a good vision of getting our logistics quick enough to the ports and out of the ports. They are not toy locomotives. They are economically viable locomotives that will service our logistics industry.”

He argued that refurbished trains have a lifespan of 10-20 years with proper maintenance. With the new fleet of 2 locomotives and 20 wagons, government projects it will break even within 2 years and make profit for over 15 years.

“That is how industrialization begins, with how you move your goods, with how you move your people,” he stated.

The minister said GRDA is working to extend rail links from Takoradi to mining sites to boost revenue. He contrasted the current approach with the past, where “rail tracks were removed, sold, and money used to pay workers.”

“Now we are prudent, we are viable, we want to have the fleet services to work, pay ourselves, and be able to pay dividends to the states. Not a situation where we were selling rail tracks to pay workers.”

He added that moving cargo by rail will also help prevent road accidents involving heavy trucks.

The agreement was signed between GRDA and MEX Logistics, under the oversight of the Ministry of Transport.

“Within these two years, we break even, make profit, extend our rail lines, and be able to expand the rail services in this country,” Hon. Nikpe concluded.