Road Projects on Hold Due to Ebola

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The tendering of international bid for the feasibility studies on the Ganta to Tapita road project has been put on hold due to the Ebola outbreak in Liberia. The government and its international financiers for the project have agreed that there is a risk that they may not get quality companies bidding if they advertised the project due to the Ebola epidemic.

 During a meeting in the US aside of the ongoing Annual Meeting of the World Bank Group and International Monetary Fund (IMF), the Liberian delegation led by Finance Minister Amara M. Konneh and development partners announced that the feasibility studies on the Tapita to Fishtown road project has also been delayed due to the Ebola outbreak.

China Exim, a Chinese company which signed a memorandum of understanding with the Liberian government for the road, has said it won’t conclude terms or predict cost until the feasibility is undertaken. Finance Minister Amara Konneh has disclosed that China Exim will require 15% up front counterpart financing, but the World Bank has advised the government to ensure engineering standards are maintained and asked that the government requires appropriate safeguards from the Chinese company.

 At the same time, the World Bank’s transport team on the Redlight to Gbarnga Road told the Liberian delegation that it is working hard to prevent contractors invoking of force majeure. But the team noted that the government of Liberia’s supervising consultant, name not mentioned, left the project first thereby creating a possibility of extra costs.

On the other hand, the Liberian delegation made headways in negotiating funding from cross section of bilateral and multilateral institutions to help the government fight the Ebola epidemic and restore the country’s economy.

In a meeting with the IMF, the delegation landed US$48 million for Liberia under the Fund’s Extended Credit Facility (ECF). It also sought and received commitment to additional funds, specifically work towards accessing Rapid Credit Facility (RCF) as a bridging option with disbursement in early 2015 for a similar amount as ECF, i.e. 25% of the country’s quota.

 In light of the travel restrictions placed on staff of the Fund, however, the planning detailed discussions in the context of fiscal year 2015/16 budget, ideally around January or February 2015, possibly in Accra, Ghana.

 In the meantime, the joint team of the Ministry of Finance and Development Planning (MFDP) and the Central Bank of Liberia (CBL), through an official letter to the Fund has maintained commitment to policy actions under ECF to the extent possible but keeping some focus on maximizing the opportunities under the RCF.

 The delegate also proposed discussions on a new program to begin from mid next year.  Meanwhile Policy Actions for RCF is proposed around repaying CBL fairly quickly to replenish reserves. Few months ago, the CBL made available US$5 million loan to the government’s Ebola Trust Fund at 1% interest rate to fight the deadly Ebola virus.

 The issue of the audit surrounding the roads contracts across the country was also discussed, but the government assured the Fund that the audit is ongoing with a push to get it completed soonest.

In brief remarks at the meeting with the IMF officials, the Managing Director of the Fund Madam Christine Lagarde suggested more budget support is needed as short-term spending is crucial to keep the economy moving.

 She acknowledged that running a budget deficit may be a good option. For her part, former Liberian Finance Minister and head of the IMF Africa desk, Dr. Antoinette Sayeh also encouraged the Liberian government to push for grants from partners and more budget support.

The delegation also had the opportunity to meet World Bank president Dr. Jim Yong Kim who demonstrated honesty in working Liberia to overcome the Ebola scourge. He encouraged the team not to accept lowered aspirations, but rather ensure that the country pulls all stops to get the required support to help cover its budget gaps and receive optimum support from bilateral and multilateral partners.

 Dr. Kim promised to champion the cause of the three countries worst hit by the Ebola epidemic. He admonished the donor community not to re-program funds committed to existing programs, but rather provide new funds to fight the epidemic. Prominent among the issues that arose from the meeting with the Bank’s country team, the Bank’s overall commitment of US$400 million made to the region through its crisis window.

 According to a dispatch from Washington DC, current breakdown would be: Phase I US$105 million including US$52 million for Liberia (grant already disbursed); Phase II will be US$185 million including US$70 million for Liberia; and then US$92 million of budget support. The Bank is currently proposing US$30 million to US$10 million grant and US$20 million credit for Liberia.

 “We are pushing hard for an increase in the budget support to Liberia, using interventions from the United States State Department and our Executive Director’s office at the Bank, said Finance Minister Amara Konneh. Minister Konneh pointed out that the World Bank’s aim is that US$70 million will be able to wider areas of need during the second phase US$70 million will be able to cover wider areas of need including WASH, essential health, agriculture and social protection.

The Liberian delegation also met with Raj Shah of the US Agency for International Development (USAID), who assured that every support will be provided to help stop the transmission of Ebola in the country. During this meeting, the parties discussed and accepted that since only 30-40% of cases will be in ETUs, getting control will depend on community care centres (CCCs) strategy working. But the delegation cited the adequacy of health professionals to staff the CCCs and lack of appropriate logistics capacity to supply the CCCs as major challenges to getting the disease under control. The USAID Administrator was keen to mention, however, that the United States military will not be able to supply all of CCC locations, but could be opened to setting up regional hubs.

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