Lekan Adetayo and Stanley Opara
The Federal Government has started a $41bn railway expansion to reduce dependence on oil and diversify the economy, the Minister of Transportation, Mr. Rotimi Amaechi, has said.
“The plan we have now will go to every nook and corner,” Amaechi said on Wednesday in an interview in Abuja, Bloomberg reported.
The Federal Executive Council also on Wednesday approved the contract for the repair of the Itapke-Ajaokuta-Warri rail link.
Nigeria, which is Africa’s biggest oil producer, is going through its worst economic slump in 25 years following a plunge in the price and output of crude, which accounts for more than 90 per cent of foreign income and two-thirds of government revenue.
President Muhammadu Buhari’s Economic Recovery and Growth Plan, presented in March, seeks to boost agriculture and manufacturing by developing the country’s transport network and power infrastructure.
The plan’s key projects include building a second railway line connecting the nation’s two biggest cities, Lagos and Kano. The 1,100-kilometer (680-mile) line will carry freight and passengers. The government also wants to construct a rail line that will connect Lagos to the eastern city of Calabar.
The two new railways are expected to cost $20bn, with most of the funding coming from the Export-Import Bank of China, which has so far released $5.9bn.
The China’s Civil Engineering and Construction Company is handling the projects and both railways should be ready by the end of 2019, according to the minister.
General Electric Company is leading a group that is rehabilitating Nigeria’s 3,505 kilometres of century-old, narrow-gauge railway linking the coastal cities of Port Harcourt and Lagos with the North.
The group, including SinoHydro of China, South Africa’s Transnet SOC Limited and the Netherlands’ APM Terminals BV would fund, revamp and operate the railways for a period to be decided with the government, the minister said.
They won the concession in May, the report said.
The Minister of Information and Culture, Alhaji Lai Mohammed, who briefed State House correspondents at the end of the FEC meeting presided over by the Acting President, Yemi Osinbajo, put the cost of the Itakpe-Ajaokuta-Warri rail contract at $122,616,582.
He said the cost was inclusive of all taxes at the prevailing Central Bank of Nigeria’s exchange rate of $1 to N305.
The minister said the contract, spanning 15 months, would include the completion of 12 rail stations.
Mohammed said the council also approved a ‘letter of comfort’ to the General Electric for concession of the narrow gauge railway system with the government targeting the haulage of one million tonnes of goods by rail this year.
He said Amaechi had approached the council seeking approval for a letter of comfort so that by October this year, the country would be able to begin the full utilisation of the Lagos-Kano narrow gauge, Calabar, Port Harcourt, Maiduguri line.
“This is part of the efforts to rehabilitate the 30,000km narrow gauge lines so that we can use it to start hauling goods, which means that with effect from October this year, there will be new locomotives, about 17 wagons that will be in use.
“This way, we will be able to remove at least a million tonnes of goods from our roads,” Mohammed said.
He said FEC also approved a memorandum on the revised estimate cost of construction of one 150MVA and 330 132KVA transformer at Birnin Kebbi, Kebbi State and the reinforcement of 330, 132KVA station in Kumbusto in Kano State for the Transmission Company of Nigeria.
The contract was awarded at the sum of $49,845, and N43, 651, 964.
Mohammed explained that the memorandum sought for a variation since the project was already 90 per cent completed.