Railway modernisation: FG, Chinese firm seal $1.48bn pact

Posted by admin Africa & World Politics, Headlines Tuesday, August 28th, 2012

The Federal Government on Tuesday signed a $1.487bn (N234.95bn) agreement with a Chinese company, CCECC Nigeria Limited, for the modernisation of the first phase of the Lagos-Kano rail line.

Specifically, the contract is for the modernisation of the Lagos to Ibadan standard gauge rail double track, covering a distance of 156.65 kilometres.

The signing of the agreement, according to the Minister of Transport, Senator Idris Umar, followed an approval by the Federal Executive Council on July 18, 2012.

He said the agreement signing represented a major milestone in the commitment of the Federal Government to modernise the country’s railway system.

Umar pointed out that the project was a major achievement of the President Goodluck Jonathan administration’s efforts to revamp the railway sector.

Like the Abuja-Kaduna rail project, which was awarded in January 2009, the minister said the financing of the Lagos-Ibadan project would be partly funded by the Chinese government.

This, he noted, would be achieved through China’s Export-Import-Bank’s concessionary loan facility.

Umar said, “Under the arrangement, the loan facility to the tune of $1bn (N158bn) is going to be provided by the China EXIM bank. However, negotiation has been concluded with China EXIM bank for an initial $500m (N79bn) during negotiations in China.

“The negotiation of the balance sum of $500m is expected to be done in due course, and the Federal Government is expected to pay the balance of the fund in the sum of $530.77m.”

The minister also said that work on the rehabilitation of the Itakpe-Ajaokuta-Warri standard gauge railway line was in progress, adding that the Federal Government had demonstrated the political will to revamp the rail system.

“The amount of political will and financial commitment of the Federal Government to the transformation of the Nigerian railway so far is laudable and speaks volume of what a responsible government can embark upon in the shared conviction that a sure means of transportation is a major component of economic development and social integration,” he said.

Umar called on the contractor to deliver the project within the stipulated period of 36 months, adding that it must be executed with professional and technical expertise.

Speaking at the event, the Managing Director, CCECC, Mr. Cao Bao Gang, said the project would provide 5,000 jobs and had the capacity to convey about 1,200 at once.

via Punchwp_posts