Nigeria lifts suspension of railway repair contract

Posted by By staff writer on 2009/01/21 | Views: |

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Nigeria lifts suspension of railway repair contract

Nigerian Federal Government has lifted a suspension of US $8.5 billion contract for the rehabilitation of Nigerian Railways.

Nigerian Federal Government has lifted a suspension of US $8.5 billion contract for the rehabilitation of Nigerian Railways. In October, the government suspended the rail project awarded to Chinese Civil Engineering Construction Corporation (CCECC) by former president Olusegun Obasanjo in 2006 to allow government to make a comprehensive review of the project.

Minister of Transport, Alhaji Ibrahim Isa Bio, said the government had now decided that the project cannot be abandoned, saying it should be reactivated.

According to a statement signed by the Assistant Director of Press in the Ministry of Transport, Mr Kingsley Agha, the government's policy reversal came after five hours of meeting with the Chinese firm, CCECC, and the consultants handling the project.

Although the project has been widely critcised for its sluggish pace in rebuilding and rehabilitating Nigeria's single track rail line and also with officials accused of inflating prices, the team of experts and the ministry officials said the project was viable and of tremendous economic benefit to the country.

The government officials have said under the review, short routes such as Lagos, Ibadan, Kaduna and Kano with heavy human and cargo traffic would be adopted and completed in view of lack of funding, further indicating that rehabilitation would relief nation's busiest routes which are more effective for viable economy.

The government has also conceded that under the review, the Chinese government was found to have shown goodwill by providing an initial soft loan of over $2 billion at the commencement of the contract, a gesture that Mr Bio said makes the contract not only diplomatic, but political in nature.

"Furthermore, the immediate past president Olusegun Obasanjo during a state visit to China signed a memorandum of understanding and endorsed the project making it very difficult to abandon without legal implications," he told local newspaper.

The team of experts agreed that while the narrow gauge rail tacks would not be abandoned, any new tracks would need to be faster and of conventional standard gauge rail tracks.

The minister assured the contractors that the Federal Government would demonstrate the political will, and provide the enabling environment and required counterpart funding.

Nigeria has a network of 3,505 kilometres of narrow-gauge single track lines, covering nine of the country's 36 states. Most of its 200 locomotives however, broke down long time ago, according to local reports.

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