The Nigerian Government and the China Railway Construction Corporation Limited on Thursday signed a $3.9bn contract for the construction of a new Abuja-Baru-Itakpe-Lokoja rail line project.
Hon. Rotimi Amaechi, Minister of Transportation, who received senior officials from CRCC at the ministry in Abuja on behalf of the federal government, said that the signing of contract is the first step to the project.
He said the project was designed on a Public Private Partnership (PPP) arrangement where the CRCC will build the rail line run it for a period of 30 years and transfer the ownership to Nigeria government.
He explained that over 10-member CRCC officials were led to the ministry by the corporation’s Vice President, Wang Wenzhong.
He said the agreement is supposed to be 15 per cent Nigeria equity and 10 per cent CRCC equity and then we borrow 75 per cent as SPV (Special Purpose Vehicle) from the Chinese bank.
On other rail projects being handled by the Chinese, the minister said “Abuja-Kaduna that is completed was done by CCECC, the Lagos Ibadan that is nearing completion, I hope they will be able to complete it, we need them to complete it quickly and we have told them that by February legally by law by the contract would have expired legally.
“ The longest railway in Nigeria now apart from the narrow gauge is the Itakpe-Warri Railway, the German started it by Julius Berger they got close to completion and it was later abandoned.
“Part of the agreement is that CRCCI will provide us with a performance bond from their bank before we give a sovereign guarantee for then to be able to borrow the 75%.
“And then, there is a concession agreement that CRCCI will manage both the railway and the seaport and recover the 75 percent and pay the money.
“Nigeria is waiting for CRCC 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, we approved it and they are not on site.
“There is a need for CRCCI to go to site. If we raise our equity they will raise theirs together. But largely is that the funds will come from China,” he said.