THE Federal Government said on Tuesday that it requires about $12.8 billion(about N9 trillion) to construct standard gauge of rail lines from Port Harcourt to Maiduguri.
Minister of Transport, Rotimi Amaechi, who stated this during a hearing of the Senate Committee on Transportation and Local and Foreign Debts, said that the sum equivalent to an annual budget of Nigeria would be required to extend rail services across the South East and to the far end of North East in Maiduguri, Borno State.
The Minister, who made the disclosure while appearing before the Senate’s joint committee which is investigating the alleged abandonment of the South East in the railway revitalisation projects of the government also stated that the refusal of the Senate to approve a $30bn foreign loan component requested by the Federal Government is stalling the rail projects.
Last week, the Senate had mandated its joint committees on Land Transport and Local and Foreign Debts to summon the Minister to clarify the alleged exclusion of Eastern corridor in the nationwide rail project.
The lawmakers took the decision following the adoption of a motion moved by the Deputy President of the Senate, Ike Ekweremadu, which drew the attention of the chamber to perceived marginalisation of the South East in the rail project.
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When the Minister appeared before the lawmakers on Tuesday, he said that there was no plan to exclude the region from the rail project adding that the area is already captured in the 2018 borrowing plans of the Federal Government, part of which he said was the $30bn foreign loan from China Exim Bank.
He added that though the executive had commenced the design for the project he added that the approval for both the design and costing are however being delayed by bureaucratic bottleneck caused by the Public Procurement Act ( PPA).
He said: “The Public Procurement Act is very tedious and takes a long time to conclude the process which must be followed because President Buhari had always insisted that the rule of law be followed to the letter.
“The President insists on rule of law and the law passed by the National Assembly in terms of public procurement is very tedious and not easy to conclude; it takes a very long time.
“Similarly the law passed by the National Assembly on the Bureau for Public procurement is very tedious.”
The Minister also pointed out that railway project was very capital intensive, and that the Federal Government did not have sufficient fund to implement the railway projects across the country.
He further explained that, following the inadequacy of funds confronting the government, the All Progressives Congress (APC)-led administration had decided to adopt a systematic approach in the project execution, saying that it was as the loan was approved, the government would apply the fund and do what it could afford.
He further said: “We have met with both GE and the consortium handling the project for nearly two years now and we are still on it even as the first firm as handed over to TRANSNET, meaning Transport Network.
“Let me make it clear, the country does not have the resources to do railway in every village. It is not possible. $2.7 billion is one trillion Naira.
“So, for the railway you want to do from Port Harcourt to Maiduguri is about $12 .8billion which is about N9trillion equivalent to one year budget of Nigeria.
“Therefore, everything is done systematically, we can’t do all the projects at the same time. What we are doing is as we get the loan approved, we execute the project. Currently, we are following due process for the one of South East.
“Currently we have placed an advertisement on the Eastern Rail lines. Sometime in 2017, we placed an advertisement for rail from Port Harcourt to Maiduguri and that is what the law expects us to do. We can’t skip the law on construction of standard gauge.
“Again, even the narrow gauge construction does not only concern the South East. The same narrow gauge transverse Port Harcourt to Maiduguri. I don’t know what other things the Senate expects from me on this project except to say that it is work in progress.
“We are not magicians and the current law we have insists on the number of times we shall advertise a project, we completed the project we pass it to Bureau for Public Procurement, which in turn will be referred to us before we go to the cabinet for presentation and I think we are set to go to the cabinet for approval.”
While addressing the insinuation that General Electric (GE) pulled out of the project, Amaechi explained that the company handed over the contract to another sister company because it was no longer in the transport business.
He said: “It (GE) handed over the job to another sister company in the consortium which is Trans-net. We are on the verge of signing the contract agreement and it is when we finished signing the consortium agreement that we will begin to look for money to execute the project. The total cost of the project is $2.7billion and it is a Private Partnership agreement.”
Committee Chairman, Senator Gbenga Ashafa, said that the committee was satisfied with the explanation given by Amaechi. He urged him to ensure that no section of the country was excluded from the rail project.