Nigeria Signs $3.9bn Construction Deal with Chinese Firm

$3.9bn Construction Deal
Image Credit: Alternative Africa

By Adedapo Adesanya

The Federal Government of Nigeria (FGN) has signed a $3.9 billion deal with the China Railway Corporation (CRCC) for the construction of the Abuja-Itakpe Railway.

Minister of Transportation, Mr Rotimi Amaechi, who made this announcement on Thursday in Abuja, expressed hopes that the project would be completed on time.

“The signing ceremony that we have today is the first PPP railway agreement for Abuja-Baru-Itakpe and Lokoja and it is between Nigeria and CRCC,” the Minister said.

He said further that, “The agreement is supposed to be 15 percent Nigeria equity and 10 percent CRCC equity and then we borrow 75 percent as SPV 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 them to be able to borrow the 75 percent.

“There is a concession agreement that CRCCI will manage both the railway and the seaport and recover the 75 percent and pay the money,” Mr Amaechi added.

The former Governor of Rivers State also revealed that the entire railway would be constructed by the Chinese company, noting that, “I think that the good working relationship we have had with CRCC is the reason we have not been able to engage other companies.”

When speaking on the Ibadan dry port, the Minister expressed his displeasure that the work had not been completed and used the opportunity to call for the completion of the project.

He also urged the CRCC to ensure it commenced work on the Abuja to Itakpe and Warri seaport rail line.

“You were pushing us to approve and now we have but you are not on site; there is a need for CRCCI to go to site,” he said.

On funding for the project, the minister said that the majority of the funds would come from the Chinese government.

The Minister urged more collaboration with the Chinese, especially CRCC and CCECC to improve the capability of Nigerians in the sector.

“There is a need to instruct both CCECC and CRCCL to realise that we need to localise the technology and we need local participation of both Nigerian engineers and contractors,” he said.

“That’s why we emphasise on the universities we are asking you to build; we are expecting that not only will you build you will 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.” He added.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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