FG says Chinese $1.5b loan for Lagos-Ibadan rail project ready

By Wahab Akanji, Abuja

The Federal Government has stated that it had secured a $1.5 billion from the China Exim Bank to commence work on the Lagos-Ibadan rail line project.

Minister of Transport, Rotimi Amaechi, said this when he appeared before the Senate Committee on Land Transport, chaired by Senator Gbenga Ashafa, to give a status report of the 2016 budget and also present the 2017 budget before the committee on Tuesday in Abuja.

Amaechi said the foundation of the Lagos-Ibadan segment two of the Lagos- Kano rail project would be laid before the end of the first quarter (March) of this year.

He said the target of the Federal Government is to commence work on the rail project from Apapa sea port down to Ogun and then to Ibadan.

Amaechi said: “In the first quarter of 2017, the foundation of the Lagos-Ibadan segment two of the Lagos- Kano rail project will be laid. The implication here sir is that we will start the Lagos-Ibadan rail line before the end of March. Which means before the first quarter of this year Lagos-Ibadan will start.

“Our target is to commence from the Apapa sea port down to Ogun and then to Ibadan. That is our plan.

“The counterpart is ready but don’t forget that we are borrowing the money from china. The China Exim Bank is processing it. Our 15 per cent is ready so we are waiting for China Exim Bank. They have managed to release and approve $1.5 billion for Lagos-Ibadan.

“It is also envisaged that segment three of the Lagos –Kano rail project which is Kano-Kaduna stretch as well as the first phase of the coastal railway line (Lagos-Calabar) commencing from Calabar to Port Harcourt with extension to Onne Deep Sea port will commence after the conclusion of the negotiation of a financing loan agreement.”

He called on the National Assembly to approve the government’s plan to borrow $30 billion.

The minister said that the money to finance some of the rail line projects are contained in the $30 billion loan request the government is seeking the national assembly’s approval for.

According to the minister, Nigeria cannot sign any loan agreement with China on rail projects without the approval of the national assembly.

“The national assembly needs to give us (Federal Government) approval for the borrowing plan so that we can commence work. We can’t sign the loan agreement with China unless there is an approval from the National Assembly.

“What the national assembly has approved is the counterpart funding but we need the approval to borrow the remaining money and if look at $6.1 billion in naira and we are paying 15 per cent, you will know that the rest huge amount is coming from china and until we have approval from the national assembly we cannot do anything.

“Even now like I said, the China Exim Bank has approved $1.5 billion for Lagos-Ibadan, we are not able to sign the loan agreement because we need the approval of the national assembly,” Amaechi said.

The minister said all rail projects that were not completed in the 2016 budget have been included in the 2017 budget.

“All these constitute ongoing rail projects which have not been completed in 2016 and consequently have been reintroduced into the 2017 budget. The ministry is in the process of procuring additional locomotive and coaches to meet the rising demand of passenger traffic of the Abuja (Idu)-Kaduna (Rigasa) rail line in 2016,” he added.

Sen. Ashafa, said the committee would work with the minister to consolidate on the achievements and performances recorded last year.

“Therefore, we must work together to ensure that we consolidate on the achievements and performances already recorded in the past year, while critically interrogating all the challenges faced in the 2016 budget cycle as well,” he said.

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