Nigeria’s N1.2tr rail project in limbo

Making a goldmine out of rail system President Umaru Musa Yar‘Adua‘s insistence on fiscal federalism and alleged contract inflation may have spelt the doom for Nigeria‘s $8.5billion (N1.2trillion) rail modernisation project agreement with the Chinese, investigations by SP have revealed.


Former President Olusegun Obasanjo‘s administration in 2006 signed the contract agreement with the China Civil Engineering Construction Corporation to construct double railway tracks for the country as part of the desire to revive the country‘s dead rail transportation system, but there were fears on Friday that the project was sinking as no identifiable progress has been recorded in spite of initial $250million already committed by the government.

The Obasanjo‘s contract deal was the second high profile rail development agreement signed between the Federal Government and the same Chinese firm.

The late Head of State, General Sani Abacha, signed a similar $500 million contract in 1996.

But officials of the Ministry of Transportation told one of our correspondents in Abuja on Friday that the Obasanjo administration had projected that the $8.5billion project would be financed with proceeds from excess crude oil, but that Yar‘Adua‘s insistence on sharing the fund among the federating states had made this impossible.

According to sources, President Yar‘Adua was said to have decided to tread cautiously on implementing the project because of alleged complaints that the total cost of the contract was inflated.

”Mr. President insists on fiscal federalism, and because the previous administration projected that the contract would be financed with proceeds from the Excess Crude Income Account, the decision to give states their constitutional share of the fund had serious implications for the railway modernisation project”, Mr Biodun Oladunjoye, Transport Minister‘s spokesman told SUNDAY PUNCH in Abuja on Friday.

A senior official of the ministry who asked for anonymity confided in our correspondent that speculations that the project cost was inflated had also made the project suffer lack of interest from the government.

”Had it been that all these unnecessary speculations did not come up, what we should be doing now is to lay the tracks. We, Nigerians are killing the project with speculations; some people talk about bloated costs by making judgments as if we are doing a single track system instead of the double that we are going to construct. They just unreasonably say that the project is loaded and the speculations almost destroyed the project,” the angry official said.

Though officials of the ministry assured that the project was still on course, our correspondents gathered that the $250million initial payment made by the Obasanjo‘s administration may have been lost because no concrete steps, beyond designing work by the CCECC, were taken to consolidate the agreement since its signing in 2006.

Making a goldmine out of rail system The CCECC, SUNDAY PUNCH gathered, has completed all the preliminary work, including the aerial surveys, and designs, said to cost more than eight per cent of the total contract sum, as well as the geo-technical arrangements for bridges and the alignment work.

Meanwhile, stakeholders have called for the stripping of the Federal Government of her monopoly in the rail sector as well as overhauling of the transportation system.

Dr Kayode Bawa-Allah, acting dean of the School of Transport at the Lagos State University, in an interview with one of our correspondents called for the amendment of the Nigeria Railway Act of 1955 which vested power to run rail transportation on the Federal Government.

”Why will only the Federal Government be responsible for the nation‘s rail system? We need to actively involve the private sector, hence the call for the concession of the railway. You can see that the same magic wand is happening in the unbundling of the Power Holding Company of Nigeria and the Nigerian Telecommunications Limited”, Bawa-Allah noted.

Secretary-General of the Nigerian Union of Railway Workers, Mr Martin Adeyanju, lamented that past governments in the country were only interested in redrawing the paper works.

Adeyanju specifically blamed the Sani Abacha‘s regime for bringing the Chinese who, he alleged, damaged the country‘s rail tracks.

He added that nothing concrete was also achieved in the first six years of Obasanjo‘s administration.

At the height of its glory, the NRC which operates a network of 3,505 kilometers (2,178 mi) of single track lines across the country, had over 45,000 workers in its employ, but its fortunes started nose-diving in the late 1970s.

The NRC today has fewer than 6,000 employees.

Information on the NRC site on Saturday indicated that the corporation in the last 20 years had gone into bankruptcy more than once.

In one fell swoop in 2005, the NRC sacked almost half of its 12,000 workforce.

The comatose state of the rail system in the country, many have argued, forms a major factor for the deplorable state of inter-state roads as bulk goods which ordinarily should be transported through the rail are being taken through the roads.

The CCECC was established in 1979 with approval by the state council of China.

Meanwhile, the Nigerian Association of Road Transport Owners last week in Lagos asked the Federal Government to order full scale inquiry into the Nigerian-Chinese rail contracts in the country, which it said had not made meaningful impact on the lives of the cititzenry.

National Operations Coordinator, NARTO, Alhaji Lawal Isa, at a media briefing, also called on the President of Senate, Senator David Mark, to initiate measures to compel the Senate Committee on Transportation to unravel those allegedly sabotaging government‘s efforts at resuscitating the ailing rail system.

Similarly, the Publish-What-You-Pay, a coalition of pro-transparency civil society groups in Abuja on Friday called on the National Assembly, the Nigeria Labour Congress, the Nigeria Bar Association and other stakeholders to urgently probe the billion dollars rail contracts with a view to unravelling alleged corruption in the deal.

”The $8.3 billion railway modernisation project has stagnated; $250 million of tax-payers‘ money may have gone down the drain while hope of mass transit by rail remains a mere dream. Since the Minister of Transport, Alhaji Ibrahim Bio, had been quoted as saying that Chief Olusegun Obasanjo signed a Memorandum of Understanding that makes it very difficult to abandon the contractual agreement without serious legal implications, the Yar‘Adua administration may likely know more than what is being said”, the groups Communication Officer, Mr Adedeji Moses, told Codewit Global Network.

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