CRCC to construct, manage $3.9bn Abuja-Itakpe-Warri rail line, seaport for 30yrs  ― Amaechi

The Federal government has signed an agreement with China Railway Construction Corporation (CRCC) to construct the $3.9 billion Abuja-Baru-Itakpe-Warri rail line and also a new seaport and manage the facility for the period of 30 years.

Speaking in Abuja on Thursday after the signing of the agreement, the Minister of Transportation Rotimi Amaechi said, “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 agreement is supposed to be 15% Nigeria and 10 percent CRCC equity and then we borrow 75 percent as SPV.

CRCC will provide us with a performance bond from their bank before we give a sovereign guarantee. There is a concession agreement that CRCC will hold 75 percent. The entire Nigerian railway is constructed 100 by CRCC” he noted.

Amaechi explained that the good working relationship Nigeria has with the company is the reason other companies have not been engaged by the country.

He further states that the PPP agreement was better than going to borrow the huge sum of money required for the construction of the new phase of the rail line, Abuja to Baru to Lokoja that the country will still have to suffer to pay back. But with the PPP agreement, “if we raise our equity, they will raise theirs. But largely, the funds will come from China.”

The Minister noted that the rail line is one of the “longest railways in Nigeria now, apart from the narrow gauge. Itakpe-Warri Rail line, the German started it by Julius Berger, they got close to completion and it was later abandoned. So some of them were vandalized and then we had to re-award it to CCECC to complete the vandalized areas”, complete the project and build a new seaport and operate and manage them for 30 years to enable the company recover their money.

Amaechi also advocated for the localization of railway technology noting that, from the history of China railway construction, China localized American technology. The first American company that started railway construction in China was GE.

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“There is a need to instruct both CCECC and CRCC to realize that we need local participation of both Nigerian engineers and contractors. We need you to work with us to develop the knowledge of Nigerians, that’s why we emphasize on you building universities and provide us with lecturers until we can train our own lecturers.

Just like we are holding CCECC on the 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 stated.

On his part, the Vice President of China Railway Construction Corporation (CRCC), Wang Wenzhong while commending the Minister said, “on behalf of 300,000 staff of CRCC, I appreciate your support and the ministry and congratulate you on your reappointment.

“CRCC is the biggest construction company of China and the biggest company of railway all over the world. In 2018, we occupy 55 among the top 500 enterprises around the world. Now we have businesses and projects in 127 countries all over the world and with a turnover 110b us dollars.

He continued “we pay lots of attention to the development of Nigeria. We also make use of our best resources in Nigeria. We are going to provide our resources to the development of Nigeria, we also demand our subsidiaries to work hard for Nigeria, We want all our projects in Nigeria to be the best in terms of quality and to meet the satisfaction of the people of Nigeria .“

Wenzhong noted that “We have some mega projects like the Lagos- Ibadan railway which has great importance to the development of Nigeria. We also made a lot of efforts for the financing of Ibadan to kano project especially with some financial institutions of China.

“We hope the federal government will take this project as the most priority one and also provide some counterpart funds so that when financing is settled, we will be able to start the project early next year” he stated.