Amaechi Signs Abuja – Itakpe Rail Contract, urges contractors to use local materials, workers
Oru Leonard
The Minister of Transportation in Nigeria, Rt. Hon. Amaechi has signed an agreement on behalf of the Federal Republic of Nigeria, for the construction of the Abuja- Itakpe to link Abuja to Warri. This took place on Thursday, October 10, 2019, in Abuja.
The Minister, Speaking at a meeting with the executives of China Railway Construction Corporation Limited, CRCC, before signing the agreement, directed the Construction giant to localise both materials and engineers working on the project and reminded them of Nigeria’s need for them to assist the country in developing technology in the rail sector.
He told CRCC that Nigeria is expecting the completion of the Abuja to itakpe and warri rail line, and Warri seaport as soon as possible. According to him, “Before the approval at the Federal Cabinet, CRCC was pushing us with so much pressure to approve it, we approved it and they are not on site”.
He further stated that there was need for CRCC 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 advised.
He noted that the signing ceremony was the first PPP railway agreement for Abuja- itakpe or Abuja- Baru-itakpe and lokoja and it is between Nigeria and CRCC. He also said that the agreement is supposed to be 15% Nigeria equity and 10 percent CRCC equity and 75 percent will be borrowed as SPV from the Chinese bank.
“Part of the agreement is that 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 CRCC will manage both the railway and the seaport and recover the 75 percent and pay the money”.
“So, the entire railway for now in Nigeria is constructed 100% by CRCC. I think that the good working relationship we have had with CRCC is the reason we have not been able to engage other companies”.
The Minister frowned at the delay in completing the Ibadan dry port and directed that there was need to conclude it.
He reminded the CRCC on the agreement to develop Nigeria’s capacity in the area of technology.
“There is a need to also instruct both CCECC and CRCC to realise that we need to localise the Technology and 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 the universities we are asking you to build , we are expecting that not only will you build, you will provide us with lecturers until we can train our own lecturers.
“Just like we are holding CCECC on 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 of railway components .
He called for speedy completion of Lagos-Ibadan rail project.
“Literally, all the railway activities in Nigeria is handled by your company, the 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 the contract would have expired legally, I hope you will complete before that time so that we commence commercial activities”, he said.
Earlier in his presentation, the Vice President of CRCC,Wang Wenzhong, expressed his company’s appreciation for the support and pledged that they would make use of their resources to assist Nigeria develop.
“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 assist in the development of Nigeria “
“We also demand our subsidiaries to work hard for Nigeria and also the people “.
Wenzhong expressed hope that the government would provide its counterpart funding on time and appealed to the Minister to continue in providing the usual support for the development of CRCC here in Nigeria.
“We have some mega projects like Ibadan railway which has taken a great importance in development of Nigeria.
“We also made a lot of efforts for the financing of Ibadan to Kano project especially some financial institutions of China “.
“We hope the federal government will take this project as the most priority one and also provide some counter part funds so that when financing is settled, we are going to start project early next year “.
“We assure that CRCC is going to take elaborate preparations and make sure the project is completed in time”.
“Another project is Coastal Rail. CRCC is also making efforts to find different financial solutions to make sure that the project starts successfully”.
“CRCC is a friend of Nigeria and we will continue practicing the concept of stride with Nigeria and stir an industrial change and investment in Nigeria”, he concluded.
