The Federal Government of Nigeria has signed a $3.9bn contract with the China Construction Railway Corporation, CCRC, to build a standard railway track connecting Abuja to Itakpe, Kogi State. The contract also includes the construction of the Warri seaport.
While Nigeria takes 15 per cent equity, the Chinese firm takes 10 per cent, with the remaining 75 per cent expected to be sourced from banks in the Asian country for the execution of the project.
Under this Public-Private Partnership, the CCRC will operate both the rail line and the seaport in a bid to recover the money spent, liquidate the loans and handover the facilities to Nigeria within a period of 30 years.
“The signing ceremony that we had today is the first PPP railway agreement for Abuja-Itakpe or Abuja-Baru-Lakpe and Lokoja and it is between Nigeria and CCRC.
The agreement is 15 per cent Nigeria equity and 10 per cent CRCC equity and then we borrow 75 per cent as SPV from the Chinese bank,” Minister of Transportation, Rotimi Amaechi said shortly after signing the contract on behalf of the federal government
He added that “part of the agreement is that China RCC will provide us with a performance bond from their bank before we give a sovereign guarantee for them to be able to borrow the 75 per cent.” In his words, the rail facilities are being executed by the Chinese corporation.
The minister also harped on the need for local content in the execution of the projects saying, “there is a need to also instruct both CCECC and CCRC to realise that we need to localise the technology and we need local participation of both Nigerian engineers and contractors,” he said.
“We need you to work with us to develop the knowledge of Nigerians. That’s why we emphasize that on the universities we are asking you to build, we are expecting that not only will you build, you will provide us with lecturers until we can train our own lecturers,” he charged CCRC.
On his part, China CRC Vice President Mr Wang Wenzhong pledged the readiness of his company to deliver quality facilities for Nigeria and Nigerians. “We also demand our subsidiaries to work hard for Nigeria and also the people. We want all our projects in Nigeria to be the best in terms of quality to meet the satisfaction of the people of Nigeria,” he said.