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
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 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
“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
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.
“I think that the good working relationship between the Federal
Government and CRCCI Is the reason we have not engaged other companies,
and there’s the need to localise the technology and we need local
participation of both Nigerian Engineers and contractors. So we need you
to work with us to develop the knowledge of Nigerians in terms of the
Railway University and provide us with lecturers until such a time that
we are able to have our own lecturers,” he said.
Amaechi further stated that the Chinese company is expected to operate
with the aim of meeting the repayment term of the borrowing within a
construction period of thirty years.
Earlier, leader of the Chinese delegation and Vice Chairman of CRCCI,
Wang Wenzhong, said they would provide solutions to the development of
Nigeria railway and ensure the best in terms of quality delivery. He
acknowledged that there had been significant achievements in
transportation infrastructure under the present government.
“CRCCI is China’s biggest construction company and the biggest railway
company in the world. We pay lots of attention to the development of
Nigeria, we also make use of our best resources in Nigeria. We also make
demand for our subsidiaries to work harder for Nigeria and her people.
We, as government, we know that you have made a lot for the development
of CRCCI, we appeal to you to provide your continuous support for the
achievements you have made.
“We have also witnessed a great achievement in transportation under your
leadership and we are going to provide all solutions to the development
of Nigeria railway. We want all projects in Nigeria to be the best in
terms of quality,” Wenzhong stated.