FG to pay $318m as counterpart funding on Ibadan-Kano SGR project
Nigeria is to pay a counterpart funding of $318million to China for the commencement of work on the Ibadan-Kano standard gauge rail (SGR) project.
Rotimi Amaechi, Nigeria’s minister of transportation who said President Muhammadu Buhari has approved the payment of $318m as counterpart funding during the June 12 Democracy Day interview monitored on Channels Television on Friday night commended the Chinese government which he said had been very helpful in funding the railway modernization projects of the federal government.
Amaechi said work on the Ibadan-Kano segment of the Lagos-Kano standard gauge rail line may commence by the end of August.
The project being funded by the Chinese government will cost $5.3bn. It will be handled by the China Civil Engineering and Construction Corporation (CCECC).
According to Amaechi: ”Now we are going to pay the counterpart funding of the $5.3bn which we are borrowing for Ibadan-Kano project. The President has directed the release of about $318m for this year. Hopefully by next year more money would be released”.
The minister of transportation disclosed that the Federal Executive Council (FEC) had approved the opening of an account where some of the profits being generated from the standard gauge train services would be secured for repayment to the Chinese government.
He further stated that the flagship Abuja-Kaduna train which started with 300 daily passengers now records over 4000 passengers. When the service first started, the government was making a monthly loss of N46m, but it now generates between N109m to N110m monthly profit.
It is expected that by the time the Ibadan-Kano train service comes on stream with cargo operations added to the service, more profit would be generated to ease the repayment of the loan.
“We must attribute our successes in the rail operation to the President of the Federal Republic of Nigeria,” Amaechi said.