Minister of Transportation appears before the Senate Committee on Local and Foreign Debts, Clarifies Issues on Railway Modernization Projects
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Minister of Transportation appears before the Senate Committee on Local and Foreign Debts, Clarifies Issues on Railway Modernization Projects.
The Minister of Transportation, Rt. Hon. Chibuike Rotimi Amaechi, yesterday appeared before the Senate Committee on Local and Foreign Debts in respect of the alleged omission of Eastern Corridor Rail line in the 2016-2018 External borrowing plan. The Minister who was forthright in his explanation told the Senate Committee members chaired by Senator Shehu Sani that it was not true that the South-East region was excluded from the Federal Government’s Railway projects.
Amaechi while explaining the technical details of the borrowing plan for the Rail projects stated that the former President Olusegun Obasanjo’s Administration in 2006 awarded the Rail Contract for Lagos-Ibadan-Ilorin-Minna-Kano with branch line from Minna-Abuja-Kaduna to Messrs China Civil Engineering Construction Corporation (CCECC) Nig Ltd at a contract sum of $8.3 Billion.
He stated further that in 2014, former President Goodluck Ebele Jonathan’s Administration awarded the Contract for the Coastal Railway Project- “Lagos – Shagamu – Ijebu Ode – Sapele – Warri – Yenogoa with a sliding to Otuoke – Port Harcourt – Asaba – Uyo – Calabar with additional section from Benin City – Abudu – Agbor – Uko – Ogwashukwu – Asaba – Onitsha including Onitsha Railway Bridge” to Messrs CCECC Nig Ltd at a contract sum of $11, 974, 756, 680.35.
According to him, the Administration of President Muhammadu Buhari reviewed downward the Contract for the Coastal Rail Project and a new agreement was signed with Messrs CCECC Nig Ltd at a sum of $11, 174, 756, 680.35 in 2016 thereby saving a whopping sum of $800 million from the Coastal Railway Project.
Rotimi Amaechi emphasised that the Administration of President Muhammadu Buhari has completed and flagged-off for Commercial operations Segment 1, which is the Abuja (Idu) – Kaduna (Rigasa) Railway project. He explained further that the Government in appreciation of the economic importance of the ports decided to approve the extension of the Lagos – Ibadan (Segment 2) of the Lagos – Kano Rail Project and Calabar – Port Harcourt Rail project (Segment 1) of the Coastal Rail line to the Apapa and Onne Deep Sea Ports respectively.
On the issue of funding for the three segments of Lagos-Ibadan, Kaduna-Kano and Calabar –Port Harcourt, the Minister said that the projects are to be funded through co-financing fund arrangement where China EXIM Bank covers 85% and Federal Government of Nigeria covers the remaining 15% plus Vat and Land acquisition fee.
However, clarifying the loan arrangement schedule between the Federal Government of Nigeria and China EXIM Bank, the Minister noted that;
The Lagos-Ibadan with extension to Apapa Port Complex, Lagos (Segment 2 of Lagos-Kano Rail Project, the Federal Government contribution is ($314, 529,784.90) while China EXIM Bank contribution is ($1,267,317,586.10), with a total amount of$1,581,847,371.00.
Kaduna – Kano (Segment 3a, Lagos-Kano Rail Project), the Federal Government Contribution is $329,810,658.40, China EXIM Bank $1, 355,508,426.60, and the total is $1,685,319,085.00.
Calabar – Port Harcourt (Segment 1 of the Lagos-Calabar Coastal Rail) with extension to Onne Deep Sea Port (Segment 1, Lagos-Calabar Coastal Rail Project), the Federal Government Contribution is $835,653,142.49, China EXIM Bank $2,592,088,355.63 and the total amount is $3,427,741,498.12.
The Minister in concluding his presentation pointed out the fact that the Administration of President Muhammadu Buhari’s‘Change Agenda’ in the Transportation Sector is to ensure that the whole country is networked with Railway including the South Eastern part adding that the South-Eastern part had already been captured by the new Standard Gauge Rail Projects of the Federal Government.
In his opening remarks, The Chairman, Senate Committee on Local and Foreign Debts, Senator Shehu Sani stated that the Minister was invited to brief the Committee on the proposed loan for the modernization of the Nigerian Railway lines and also clear the air on the allegation of exclusion of the South East from the Federal Government Rail project as well as throw more light on the technical details on the loan in order to enable the Senate make an informed decision.