Governor Abdullahi Ganduje has said that the $1.85 billion development
loan obtained by the state government from China is not meant to mortgage
the future of the state, as insinuated by political detractors.
“The interest on the loan will not be more than three percent while the
loan has a repayment period of 15 years. The Chinese Bank will give 85
percent of the contract sum while we (Kano state government) will provide
the remaining 15 percent”, the governor stated.
He made the clarification on Thursday while inaugurating a 13-member
committee to ensure effective implementation of the Kano Metropolitan
Light Rail project, to be executed by a joint venture of China Railway
18th Bureau Group Ltd and China Railway Construction Electrification
Bureau Group.
The governor stated that from its improving revenue earnings, the state
government realized that it can pay the 15 percent of funds required for
the project, adding that the rail project will pay for itself in the long
term and leave a lasting legacy for future generations.
He said government had decided to take the loan to finance the project
because developed countries across the world resort to development
financing, in the form of bank loans, to finance capital intensive
developmental projects.
“The rail projects in Britain Germany, France and the US were constructed
with bank loans. Also, the light rail projects in Lagos, Port Harcourt ad
Kaduna were constructed with loans obtained from banks. Even the Lagos –
Abuja – Kaduna – Kano rail project, being constructed by the Federal
government is financed with a loan. Ours is not an exception, so anybody
who thinks we can do it alone is economically naive”, the governor
asserted.
Governor Ganduje said the impelmntation committee was expected to liaise
with the contractors, the investment bankers, coordinators of the project
and the Federal Government that guaranteed the project.
Responding on behalf of the committee members, the Chairman, Alhaji Isyaku
Umar Tofa, who doubles as chairman of the state Investment Promotion
Agency, thanked Ganduje for the appointment, and assured that the
committee would justify the mandate.
Governor Ganduje, who returned recently from a trip to China, explained
that he met with officials of the Bank of China, Bank of Development and
China EXIM Bank to discuss modalities for funding the project.
He also visited Saudi Arabia where he held a meeting with officials of the
Islamic Development Bank in Jeddah, for financing the upgrade of Wudil
Water Treatment Plant, seven regional water schemes as well as irrigation
facilities across Kano.
Meanwhile, Governor Ganduje, alongside some state governors and top
security officials met in Abuja, with the National Security Adviser, in
respect of religious crisis and security challenges, arising from the
current onslaught against Boko Haram in the North Eastern part of the
country.