China's Railway Construction Corporation signs $3.9bn Abuja-Lokoja rail contract with Nigeria

NIGERIA has signed a $3.9bn contract with the China Railway Construction Corporation (CRCC) to construct a new Abuja-Itakpe-Lokoja rail line as part of the ongoing programme to build a nationwide network.

Over the last decade, Nigeria has begun the process of upgrading her antiquated railway network built by the British as far back as 1896. Still very much stuck in the 19th century, the network made up of 3,505 km of narrow gauge track on which industrial revolution era rolling stock trains run, at speeds of about 50km an hour.

In 2006, the government entered into a contract with the China Civil Engineering Construction Corporation to build a standard gauge line between Lagos and Kano. It was later decided to complete the project in segments due to a lack of funds and the first segment from Abuja to Kaduna of 187km opened on July 26 2016, with work on the Lagos-Ibadan section beginning in March 2017.

Now, the next phase is due to begin with the Abuja to Lokoja section to pass through the inland port of Baro in Niger State. Also included in the contract agreement signed in Abuja yesterday is the completion of the line from Warri Central Station and the construction of a new Warri seaport.

Transport minister Rotimi Amaechi, who received senior CRCC officials yesterday, stated that with the latest contract, the Chinese firm was in charge of all rail projects in Nigeria. Their 10-man team was led to the ministry by the corporation’s vice president, Wang Wenzhong.

Mr Amaechi said: “The signing that we had today is the first public private partnership railway agreement for Abuja-Itakpe or Abuja-Baru-Itakpe and Lokoja and it is between Nigeria and the CRCC. The agreement is supposed to be 15% Nigeria equity and 10% CRCC equity and then we borrow 75% as special purpose vehicle from the Chinese bank.”

“Part of the agreement is that the CRCC 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%. And then, there is a concession agreement that the CRCC will manage both the railway and the seaport and recover the 75% and pay the money.”

He added that the federal government had not engaged other companies for railway construction in Nigeria due to its relationship with the Chinese construction firm. He, therefore, urged the corporation to complete its ongoing projects across the country on time.

On the Lagos-Ibadan rail project, Mr Amaechi reminded the construction firm to speed up its work as the legal date for the completion of the rail line had not changed from February 2020. Mr Wenzhong promised that the CRCC would continue to use its best resources in Nigeria to develop the country, adding that it had ordered its subsidiaries to work hard for the Nigerian people.