Railway: FG, China sign $3.9b contract to link FCT with Itakpe, Warri

The Federal Government has signed a contract sum of $3.9 billion for the construction of a railway to link the Federal Capital Territory (FCT) with Itakpe and Warri, Delta State.

The rail line, according to the contract, will pass through Barro and have a branch line to Lokoja,  Kogi State capital.

Also included in the contract agreement is the completion of the rail line from Warri Central Station and construction of the new Warri Sea Port.

Minister of Transportation, Chibuike Rotimi Amaechi, while signing the contract on behalf of the Federal Government on Thursday in Abuja, said the contract would be operated on a Public-Private Partnership (PPP) platform where the Federal Government and the Chinese company are expected to contribute equity to the cost of the construction.

According to Amaechi, “the signing ceremony we are witnessing today is the first PPP railway agreement for Abuja, Barro, Itakpe, and Lokoja. The agreement is between the Federal Republic of Nigeria and China Railway Construction Company International (CRCCI).

“In the agreement is 15 percent Nigeria and ten percent CRCCI and then we would borrow the remaining 75 percent as SPV from the Chinese EXIM bank.

“Part of the agreement is that the CRCCI will provide us with a performance bond before we give a sovereign guarantee for them to be able to borrow the remaining 75 percent,” Amaechi said.

He further added that any outstanding arising from the contract will be borrowed with the Federal Government’s guarantee, which will also be backstopped by performance bond from the company.

“And then there is a concession agreement that requires CRCCI to 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 by CRCCI. Honestly, I don’t know why we have not concluded the Ibadan dry port, we need to conclude that and get it out of the way. Nigeria is waiting for CRCCI at Abuja to Itakpe and Warri seaport.

“Before the approval at the Federal cabinet, CRCCI was pushing us with so much pressure to approve it, now that we have approved it, they are not on-site,” he said.

While also commending the working relationship between the Federal Government and CRCCI over the years, the former Rivers governor said there was a need to localise technology and participation.

“I think that the good working relationship between the federal government and CRCCI is the reason we have not engaged other companies, and there’s the need to localise the technology and we need local participation of both Nigerian Engineers and contractors.

“So, we need you to work with us to develop the knowledge of Nigerians in terms of the railway university and provide us with lecturers until such a time that we are able to have our own lecturers,” he said.

Amaechi also noted that the Chinese company was expected to operate with the aim of meeting the repayment term of the borrowing within a construction period of thirty years.

Earlier, the leader of the Chinese delegation and Vice Chairman of CRCCI, Wang Wenzhong, said, they would provide solutions to the development of Nigeria railway and ensure the best in terms of quality delivery.

He acknowledged that there had been significant achievements in transportation infrastructure under the present government.

“CRCCI is China’s biggest construction company and the biggest railway company all over the world. We pay lots of attention to the development of Nigeria, we also make use of our best resources in Nigeria.

“We also, make a demand for our subsidiaries to work harder for Nigeria and her people. We, as government, we know that you have made a lot for the development of CRCCI, we appeal to you to provide your continuous support for the achievements you have made.

“We are going to provide all the solutions to the development of the Nigerian railway. We want all projects in Nigeria to be the best in terms of quality. We have also witnessed a great achievement in transportation under your leadership,” he said.



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