Rt. Hon. Rotimi Amaechi, Honourable Minister for Transportation, Conversing with Workers at the Railway Project Site Photo: Nairametrics

Uncertainty over $5.3bn facility for Ibadan-Kano rail project: Report

Alexander Davis | ConsumerConnect

The commencement of work on the much publicised $5.3 billion Ibadan-Kano rail line project in Nigeria is reportedly being stalled by the delay in approving the loan by the Chinese Government.

Investigations revealed that the project, which ought to have started December 2020, is stuck because the anticipated loan facility for is yet to come to fruition, Daily Trust report said.

The Ibadan-Kano rail line is part of the 2,700 kilometre Lagos-Kano rail standard gauge line which will connect from the Lagos seaport to Kano State, in Northern Nigeria.

According to report, the completed portions of the project are the 187 km Abuja-Kaduna section and the 156km Lagos to Ibadan respectively.

Earlier, the Federal Government this year had approved another 248km Kano-Maradi line which connects the country to neighbouring Niger Republic.

The project would cost $1.9bn.

Unlike the Ibadan-Kano rail line, the Kano-Maradi rail project is expected to be funded through the appropriation.

However, for the Ibadan-Kano rail to be handled by the China Civil Engineering and Construction Corporation (CCECC) there is uncertainty over the loan as of now, report stated.

It was gathered that the project became controversial recently when Rt. Hon. Rotimi Amaechi, Honourable Minister for Transportation, urged the country’s National Assembly (NASS) to not debate the loan as it violates the terms of agreement with the creditor ─Chinese Government.

The Chinese Government through the China Exim Bank was expected to approve the loan in December, but that was yet to be done, sources said.

Meanwhile, the Federal Government also approved $303 million as counterpart funding for the loan and targets 2023 for its completion, but a source privy to the project noted this is dependent on the early commencement of work, report said.

The official said it is unlike the Lagos-Ibadan project which is being delivered in less than three years.

Recently, when the Minister for Transportation was asked on update on the rail project, Amaechi declared that he has no idea of the time it would start as the Chinese Government was yet to approve the $5.3 billion facility.

He said: “It is important that Nigerians know that the Ministry of Transport does not take loans. The earlier we get that into our psyche the better for us.

“Everybody has his own responsibility. It is the responsibility of the Ministry of Finance to seek loan and pass on to the Ministry of Transportation to implement.

Amaechi explained that “the only loan we have taken so far in the Ministry of Transport was the $500m loan for Kaduna-Abuja train and the $1.4bn loan for this (Lagos-Ibadan).

“The rest are just proposals that are yet to come to fruition.”

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