Metro
FG Signs $3.9Bn Abuja-Baru-Lokoja-Itakpe Rail line PPP Agreement
The Federal Government has signed a $3.9bn PPP agreement with the China Railway Construction Corporation Limited for the construction of a new Abuja-Baru-Lokoja-Itakpe rail line to for better connectivity of the country by rail.
The Minister of Transportation, Rotimi Amaechi at the signing of the contract with the CRCC at the ministry, disclosed that the latest $3.9bn contract, with an agreement of 15percent Nigerian equity and 10percent China equity, puts the CRCC at the forefront of rail projects in Nigeria.
“The signing ceremony 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 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.
“Part of the agreement is that CRCCI will provide us with a performance bond from their bank before we give a sovereign guarantee for then to be able to borrow the 75%, and then, there is a concession agreement that CRCCI will manage both the railway and the seaport and recover the 75 percent and pay the money.
“So, the entire railway for now in Nigeria is constructed 100 by CRCC. I think that the good working relationship we have had with CRCC is the reason we have not been able to engage other companies. ” said Amaechi.
The minister further asserts that Nigeria is waiting for CRCC at Abuja to itakpe and warri seaport, as they are not yet on site after approval from the Federal cabinet.
” Before the approval at the Federal Cabinet, CRCCI was pushing us with so much pressure to approve it, we approved it and they are not on site.
“There is a need for CRCCI to go to site. If we raise our equity they will raise theirs together. But largely is that the funds will come from China.
“There is a need to also instruct both CCECC and CRCCI to realise that we need to localise the Technology and we need local participation of both Nigerian engineers and contractors.
The Minister speaking on localisation of Industry stress the need for the chinese compamy to work with Nigeria to develop the knowledge of Nigerians, hence the reason why it is being emphasized thst on the tge CRCC build universities and provide us lecturers until Nigeria 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 CRCCI on the issue of manufacturing of railway components in Nigeria,” said the Minister.
The Vice Chairman, CRCCl, Wang Wenzhong in his remarks said the CRCCI is a friend of Nigeria and will continue practicing the concept of stride with Nigeria and stir an industrial change and investment in Nigeria.
He reiterated that the CRCCI is making efforts to ensure thst the ongojng project are completed with the hope that the Nigerian government provide resources to take care of problems of compensation and resettlement.
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