NIGERIA – The Federal Government of Nigeria has signed a $3.9bn contract with the China Railway Construction Corporation (CRCC) Limited for the construction of a new Abuja-Itakpe-Lokoja rail line.
The rail line will pass through Baro and have a branch line to Lokoja, the Kogi State capital.
The contract which was signed in October this year also included the completion of the rail line from Warri Central Station and the construction of the new Warri seaport.
The Minister of Transportation, Rotimi Amaechi, who received senior officials of the CRCC at the ministry, stated that with the latest $3.9bn contract, the Chinese firm become the principal overseer of all rail projects in Nigeria.
The over 10-member CRCC team was led to the ministry by the corporation’s Vice President, Wang Wenzhong.
Amaechi said, “The signing that we had today is the first PPP (Public Private Partnership) railway agreement for Abuja-Itakpe or Abuja-Baru-Itakpe and Lokoja and it is between Nigeria and the CRCC.
“The agreement is supposed to be 15 per cent Nigeria equity and 10 per cent CRCC equity and then we borrow 75 per cent as SPV (Special Purpose Vehicle) from the Chinese bank.”
He noted that contract terms required CRCC to provide a performance bond from the Chinese bank before “we give a sovereign guarantee for them to be able to borrow the 75 per cent.”
He further noted that there is a concession agreement that the CRCC will manage both the railway and the seaport and recover the 75 per cent and pay the money.
The minister revealed that the Federal Government had not engaged other companies for railway construction in Nigeria due to its relationship with the Chinese construction firm.
The minister also urged the CRCC which is currently constructing the Ibadan dry port to finish the project in the soonest time possible because “Nigeria is waiting for the CRCC at Abuja to Itakpe and Warri seaport.”
Ameachi told his guests that there was a need to localise the technology used in the construction of railways, adding that Nigerian engineers and contractors should participate.
On his part, Wenzhong promised that the CRCC would continue to use its best resources in Nigeria to develop the country, adding that it had ordered its subsidiaries to work hard for the Nigerian people.
He acknowledged that there had been significant achievements in transportation infrastructure under the present government.
The minister also urged the CRCC which is currently constructing the Ibadan dry port to finish the project in the soonest time possible because “Nigeria is waiting for the CRCC at Abuja to Itakpe and Warri seaport.”
