Nigeria, China Sign Contract Agreement To link FCT, Itakpe/Warri by Railway

Minister of Transportation, Chibuike Rotimi Amaechi

The Federal Government has signed a contract agreement for the construction of railway to link Abuja, the Federal Capital Territory with Itakpe and Warri.

The rail line, which is about $3.9b, will pass through Barrow and have a branch line to Lokoja, the Kogi State capital.

Also included in the contract agreement is the completion of the rail line from Warri Central Station and construction of the new Warri Sea port.

The Minister of Transportation, Chibuike Rotimi Amaechi, while signing the Contract on behalf of the Federal Government on Thursday in Abuja, said the contract will be operated on a Public Private Partnership (PPP) platform where the Federal Government and the Chinese company are expected to contribute equity to the cost of the construction.

According to Mr Amaechi, “The signing ceremony we are witnessing today is the first PPP railway agreement for Abuja, Barrow, Itakpe and Lokoja. The agreement is between the Federal Republic of Nigeria and China Railway Construction Company International (CRCCI). In the agreement, it is 15 percent Nigeria and 10 percent CRCCI and then we would borrow the remaining seventy five percent as SPV from the Chinese EXIM bank.

Part of the agreement is that the CRCCI will provide us with a performance bond before we give a sovereign guarantee for them to be able to borrow the remaining seventy five percent,” Amaechi said.

The Minister added that any outstanding fund arising from the contract will be borrowed with the Federal Government’s guarantee, which would also be backstopped by performance bond from the company. “And then there is a concession agreement that requires CRCCI to manage both the railway and the seaport and recover the seventy five percent and pay the money.

“So, the entire railway for now in Nigeria is constructed by CRCCI. Honestly, I don’t know why we have not concluded the Ibadan dry port. We need to conclude that and get it out of the way. Nigeria is waiting for CRCCI 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, now that we have approved it they are not on site,” he told the Chinese delegation.

He however commended the working relationship between the Federal Government and CRCCI over the years, and reminded them that there was need to localise technology and participation.