The Federal Government and the China Railway Construction Corporation (CRCC) have signed an agreement for the later to construct the $3.9 billion Abuja-Baru-Itakpe-Warri rail line.
As part of the agreement, the CRCC will also handle the construction of a new seaport in Warri.
The multi-million naira projects, upon completion, will be managed by the consortium for a period of 30 years.
The Minister of Transportation, Rotimi Amaechi, who made the disclosure shortly after the signing ceremony Thursday in Abuja, said the development signaled the first public,private partnership (PPP) for the Abuja- Itakpe and Abuja- Baru-Itakpe and Lokoja.
According to the minister: “The signing ceremony that we have today is the first PPP railway agreement for Abuja- Itakpe and Abuja- Baru-Itakpe and Lokoja and it is between Nigeria and CRCC.
“The agreement is supposed to be 15% Nigeria and 10 percent CRCC equity and then we borrow 75 percent as SPV( Special Purpose Vehicle). CRCC will provide us with a performance bond from their bank before we give sovereign guarantee. There is a concession agreement that CRCC will hold 75 percent. The entire Nigerian railway is constructed 100 by CRCC”.
The former Rivers State Governor commended the CRCC for its amiable disposition and cooperation with the federal government, saying it was that singular reason that the relationship was being sustained and strengthened
According to Amaechi, the PPP arrangement was more convenient for government, as opposed to borrowing, which entailed paying back the loan.
He further disclosed that the rail line, when completed, will be one of the longest corridor in the country, apart from the narrowing gauge.
Amaechi observed that, “if we raise our equity, they will raise theirs. But largely, the funds will come from China”, even as he added that, the rail line is one of the “longest railway in Nigeria now, apart from the narrow gauge is the Itakpe-Warri Rail line”.
He recalled that, “the German started it by Julius Berger they got close to completion and it was later abandoned. So some of them were vandalized and then we had to re award it to CCECC to complete the vandalized areas”.
Meanwhile, the minister has made a case for the localization of railway technology, noting that the history of China railway construction, showed that China had localized the American technology.
The first American company that started railway construction in China was GE.
“There is a need to instruct both CCECC and CRCC to realize that we need local participation of both Nigerian engineers and contractors. We need you to work with us to develop the knowledge of Nigerians, that’s why we emphasize on you building universities and provide us with lecturers until we can train our own lecturers.
“Just like we are holding CCECC on issue of manufacturing at Kajola, for which we have awarded them the contract of about 500 million dollars to build for us rolling stock for Lagos-Ibadan, we will also resume conversation with CRCC on the issue of manufacturing railway components in Nigeria” Amaechi added.
Earlier, the Vice President of China Railway Construction Corporation (CRCC), Wang Wenzhong, commended the minister on behalf of the company’s 300,000 staff for reposing confidence in the company.
Wenzhong explained that CRCC remained the biggest construction company of China, and the biggest railway company in the world.
He said in 2018, the company occupied 55 among the top 500 enterprises around the world, adding that currently, they have businesses and projects in 127 countries of the world, with a turnover of $110b.
“We pay lots of attention to the development of Nigeria. We also make use of our best resources in Nigeria. We are going to provide our resources to the development of Nigeria, we also demand our subsidiaries to work hard for Nigeria, We want all our projects in Nigeria to be the best in terms of quality and to meet the satisfaction of the people of Nigeria “.
“We have some mega projects like the Lagos- Ibadan railway which has great importance in the development of Nigeria. We also made a lot of efforts for the financing of Ibadan to Kano project especially with some financial institutions of China.
“We hope the federal government will take this project as the most priority one and also provide some counterpart funds so that when financing is settled, we will be able to start the project early next year” he stated.
Stella Enenche, Abuja
