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History of Akosombo dam

To anyone connected with the post-war story of the Volta River Project, one theme must stand out most clearly - the theme of perseverance. Essential as independence was to the implementation of the project, it was essential as the ground for progress: the actual progress itself still had to be made the long, hard way. Had there been African unity, of course, the way would not have been so hard or so exacting.

But as it was, it seemed more than once that, for all its potential merits and benefits, the Volta River Project was destined to remain a project-so great were the difficulties, so challenging the times.

The story itself begins in 1949 when the Gold Coast Government commissioned a British firm of consulting engineers, Sir William Halcrow and Partners, to examine a proposed power scheme and report on the wider aspects of the development of the Volta River Basin in respect of health, navigation and communications." The resulting report was published in 1951, but in the meantime the Government had been pursuing its own lines of investigation. In particular, it had come to the conclusion that what was needed was a port to serve Accra and the east, in addition to the expanded port facilities at Takoradi.

Accordingly, when the consultants' report emphasized, among other things, that a new harbor in the east would be essential if the Volta River Project were to materialize, the Government felt that its view in this connection had been endorsed. Sure enough, within six months preliminary work had begun on the Habra site at Tema and on the new town of Tema behind it - but as for the power project itself, many years still had to pass before it even approached fulfillment. Thus, the next step came in 1953 when, in accordance with the Government's promise to the people to examine the possibility of harnessing the power of the Volta, the Volta River Preparatory Commission was established under Commander (now Sir Robert) Jackson. By this time, the Gold Coast had a new Government, elected in 1951, with an African majority, but by the time the Preparatory Commission made its report in 1956 the country was to all intents and purposes self-governing under the leadership of its Prime Minister, Dr. Kwame Nkrumah. Even so, with virtual independence, the fate of the project was still uncertain-and the need for perseverance paramount. For, though the Commission found that the project was economically feasible and technically sound" it involved an eventual investment of over 552 million cedis. (£230 million).

True, this sum was to cover the cost of the dam and power installation (at Ajena), the opening up and equipping of the bauxite mines and a complete plant for producing aluminum from bauxite to be sited at Kpong. The scheme, in other words, was fully comprehensive as it stood then. But it was also enormously costly with the result that very extensive participation from outside sources was essential. So it was that for the next few months, the Government, in addition to an ambitious development program in agriculture, education, health and so on, occupied itself with seeking the necessary outside help. For instance, by the time full Independence was achieved on 6th March 1957, extensive meetings had already been held between the government, the United Kingdom Government and two aluminum companies which had originally declared themselves to be interested. Those series of meetings, however, reached no firm conclusion. Indeed, as time and the discussions went on, the chances of a successful outcome seemed more and more remote. For one thing, this was a period of financial stringency when interest rates on loans and lengths of loan repayments became less favorable. In addition, the world demand for aluminum was temporally out-stripped by production capacity, and finally, over and above all this, the attitude of other Governments, which might be interested in participation, was that Ghana should first come to ms satisfactory arrangement with the aluminum companies.

The aluminum companies on the other hand, wanted to be assured of certain factors in advance – for example, the cost of power. But the cost of power. In turn, depend on the conditions on which other Governments might lend Ghana money. If ever there were an example of a vicious circle, this was one and to break it Dr. Nkrumah took the opportunity to an official visit to the United States in July 1958 to raise the problem with President Eisenhower. As a result of their talk, a U.S. firm of consulting engineers, the Henry J. Kaiser Company, was retained by the Ghana and U.S. Governments to make a reassessment of the engineering aspect of the project and the costs. Some seven months later, in March 1959, Kaiser reported. They recommended that Akosombo gorge, originally pinpointed by Kitson, provided and added that there was the possibility of smaller hydro-electric projects at Kpong and Bui which could follow as and when the need arose.

They recommended that the aluminum smelter should be built at Tema where the new town and harbor were now rising fast, rather than at Kpong as originally proposed and they urged that alumna should be imported until revenue from the industry made it possible to mine and refine the local bauxite into alumna. Finally, though the smelter would be the all-important main user of electricity from the power station, Kaiser suggested that a 500-mile network of transmission lines should be installed, covering the whole of southern Ghana. The new proposals represented, of course, a drastic pruning back on the original concept, especially in relations to the mining and refining into alumna of the local bauxite. But it had important advantages to offset this. For instance, the cost of the Akosombo Dam, generating station, and township were now estimated to be £102.5 million (£ 42.7 million), compared with an original estimate of 162.25 Million Cedis(£67.6 million) while the potential power out has been raised from 564 MW to 768 MW, or about 22 times the 1959 power generating capacity of the country. Ghana, in short stood to gain more power for less capital; outlay – always a satisfactory state of affairs. In addition certain other technical changes had been made with the net result that the total estimated cost had been reduced by more than 40 per cent to 313.7 million cedis (£130.7 million).

Not surprisingly, therefore, the report gave fresh impetus to the project, but there was still a long way to go. Ghana could not provide 313 million cedis (£130 million) from her own resources any more than she could have provided the original 552 million cedis (£230 million), and the process of trying to secure outside participation began once again. That process was to continue for the next eighteen months before it reached fulfillment. For example, it had been decided that the aluminum smelter, which would guarantee to buy about half of the power, generated and would thus safeguard the economic viability of the project, should be financed by private enterprise, and sure enough several aluminum companies came forward. In the end, however, their number was narrowed down to two American companies who offered to participate provided the Ghana Government could persuade the International Bank of Reconstruction and Development (World Bank) and the United States Government to help finance the actual power project at Akosombo and the various ancillary works. The trail of perseverance led, therefore to the World Bank, which duly assessed the scheme and reported that it was economically feasible and technically sound – an encouraging verdict, with its echoes of the earlier Preparatory Commission Report. Then, too, the United States Government was approached, and so was the Government of the United Kingdom-with the eventual outcome that loans from these sources, totaling 48 million Cedis(£35 million) were provisionally earmarked, with the Ghana Government supplying the remaining 84 million cedis(£35 million).

With this, the way was clear again for the smelter negotiations. Here, the amount estimated to be involved was no less than 129.6 million cedis(£54 million), some 4.8 million cedis(£2 million) less than the dam and power house, and ~38.4 million (£16 million) less than the whole power scheme including resettlement, the transmission network and so on. In other words, this also represented a major investment and since it was to be a privately owned company * there had to be various safeguards and, of course, the ability and willingness to invest. In due course, both requirements were met. The Ghana Government gave a written promise that the smelter would not be expropriated and added special exemptions for the company, henceforth to be known as Valco (Volta Aluminum Company), from duties and taxes on imports and exports.

On the investment side, the shareholders of Valco agreed to supply 27.3 million cedis(£11.4 million) and the Export- Import Bank of Washington, an agency of the United States Government, granted to Valco a loan of 77 million cedis(£32.1 million), all for the construction of Step I of the Smelter Project. There was an arrangement for additional funds to be provided both by the shareholders of Valco and Export-Import Bank should the cost of Step I exceed 104.4 million cedis(£43.5 million). Step II of the Smelter Project, the estimate of which is approximately 25.2 million cedis(£10.5 million), is to be built at a later date with financing yet to be arranged. At last, on Monday 22nd January 1962, the first Parliament of the Republic of Ghana approved the Master Agreement between Ghana and Valco, and the Agreement itself was signed shortly afterwards by Osagyefo Dr. Nkrumah on behalf of Ghana and by Mr. Edgar Kaiser of Kaiser Industries Corporation for Valco.

With the signing of the Agreement, the months and years of negotiate~ were brought to an end and the Volta River Project was formally inaugurated. In Point of fact, however, Preliminary work had been going ahead at Akosombo ever since 1959 when Kaiser Engineers and Constructors, Inc. were retained to design and, ultimately, to supervise construction of the dam on behalf of the Volta River Authority (VRA). And in May 1960, the Government had called for tenders for the dam and Power station, following this up a year later with the award of the main contract to an Italian consortium, Impregilo. In April 1961, too, Parliament had passed the Volta River Development Act, establishing the Volta River Authority as a statutory corporation with Dr. Nkrumah as Chairman and with six Board members. Briefly, the prime responsibility of the authority is to plan, execute and manage the development of the Volta River, including the construction and operation of the dam, power station and transmission system. It is also responsible for controlling the 3,275 square mile lake behind the dam, for developing the lake for fishing, transport and communications, and for promoting the health and welfare of the people in the lake area.

To the cautious minded observer, it may seem precipitate that these steps should have been taken before the financial negotiations were complete. But this is to overlook the vital importance of the project to Ghana's future, and the Government's determination and faith that it should succeed. And, in the event, this faith has been fully justified. For the fact that the Akosombo site was ready with its roads, housing, water supplies hotel and so on. meant that the contractors could move in and start work on construction immediately the go ahead was given . Again, the setting up of the Volta River Authority in advance of the formal inauguration has had equally important consequences. As the brief summary given above shows, the Authority’s responsibilities are vast and varied. It is, indeed, the authority in charge of the largest single investment in the economic development plans of Ghana-an investment, which has called not merely for money from Ghana and beyond, but for a national effort from the people of Ghana in all sorts of ways. Thus, the Authority has needed to draw on the support of a large number of agencies to help it fulfill its functions properly.

Almost every Government department has been involved, and so has the Ghana army, the universities of Ghana, and various other organizations, from the Workers Brigade and the United Ghana Farmers' Council Co-operatives to the United Nations National Physical Plan Mission and FAO. But any organization, however vital its duties may be, takes time to establish and, those nine months of the Authority's existence while negotiations were still proceeding have been invaluable: they enabled the Authority to formulate its plans, and to decide how best to find and then deploy the assistance it needed. By its "precipitateness", indeed, the Ghana Government has saved a full year in the development of the project. In itself, this year has meant a large saving not just in time, but in interest rates. But set it against all the post-war years of patience and perseverance and it becomes even more significant. After so much time and effort, Ghana could not afford to wait any longer before transforming the project into reality.