Amaechi Defends Cost of Chinese Funded Railway Projects

• Says they are cheaper than Kenyan rail line per km

Chika Amanze-Nwachuku

The Minister of Transportation, Mr. Chibuike Amaechi, has provided more insight into the multibillion dollar railway projects to be partly funded by the China Exim Bank, stating that the Lagos-Kano and Calabar-Lagos rail lines would include state-of-the-art train stations, digital signalling and communications systems and high-speed trains that would cut the number of hours spent by commuters travelling around the country by more than 50 per cent.

Speaking to THISDAY on the Lagos-Kano and Calabar-Lagos lines, which would respectively cost an estimated $6 billion and $11.1 billion to construct, the minister also allayed concerns that the cost of the projects were inflated.
He equally dismissed the comparison with Kenya’s new Madaraka express railway, which was equally funded by the Chinese at the cost of $3.2 billion.

“What we are negotiating with the China Exim Bank is to build railway projects that are much bigger and this includes the stations, signals, electricity and generators, dual locomotive engines as well as coaches.

“I have even heard criticism saying that the cost of the projects are inflated, however, the Kenyan project is only 472km long between Nairobi and the port city of Mombasa costing $3.2 billion.

“This comes to $7.5 million per km. Meanwhile, the Ibadan-Kano line is 1,500km long while the Calabar-Lagos railway line is 1,550km, but will cost us $5.2 million per km to construct,” he said.

Amaechi added that the construction of the Lagos-Ibadan leg of the railway line, which will be extended to Kano, had already started and was scheduled for completion by December 2018.

“As you know, the National Assembly approved the external borrowing component for the commencement of the Lagos-Ibadan standard gauge line. So the project has started and is scheduled for completion in December 2018, so that by January 2019, we can commence modern train services between Lagos and Ibadan,” Amaechi explained.

The minister said all the standard gauge projects would be accompanied by modern train stations that would have shopping arcades like international airports and train stations overseas.

In this regard, he said four such stations are to be constructed between Lagos and Ibadan, while smaller ones would be constructed on the route to Abuja and other cities.

“We are building four large modern stations that will have shops and facilities for commuters to buy their tickets through e-channels. Two will be in Lagos – one in Apapa and the other at Ebute Metta – then one in Abeokuta and another one in Ibadan. Then we will have smaller stations en route to Abuja and other cities,” Amaechi said.

The minister explained that the modern rail projects would come with dual locomotive engines so that they can run on electricity but switch to diesel in the event of power failure, noting that Nigeria’s share of the counterpart funding for the Lagos-Kano and Calabar-Lagos lines was 15 per cent, while the Chinese would fund the balance of 85 per cent.

On the number of jobs that would be handled by Nigerians during the construction of the projects, he said the federal government, in its negotiations, had insisted that 90 per cent of the jobs must go to Nigerians.

He also allayed concerns over single source contracting for the projects, saying the China Exim Bank had assured the federal government that there will be competitive tenders for the jobs, but they must go to Chinese firms that have bid for them.

When reminded that the foreign loans Nigeria was taking for the projects were certain to add to the country’s external debt burden and if the railway lines would be viable to repay the loans, the minister explained that rail projects the world over can hardly repay foreign loans.

“Railway projects that are funded through loans can hardly repay for the loans. But what the government is looking at is increased economic activities through major infrastructure projects that would enable it to generate more revenue to repay the loans.

“Lest you forget, the Lagos-Kano line will start from the Apapa ports; that is why a major station is being built in the port city and another one at Ebute Metta to replace the old Iddo Terminus. Now you can imagine what this can do for economic activities once the project is executed.

“We have made some progress in terms of negotiations and the Lagos-Ibadan line has started, so hopefully the National Assembly would approve the other aspects of the external borrowing plan so we can make progress with the Ibadan-Kano and Calabar-Lagos rail lines,” he said.

Amaechi further disclosed that the railway lines would ultimately be concessioned to private sector operators to ensure that they are properly managed over a long period.
On the Abuja-Kaduna railway line, which was inaugurated by the Muhammadu Buhari administration last year, the minister said new locomotives had arrived for the line, while new coaches were expected in October.

Also speaking on the Itakpe-Ajaokuta-Warri-Aladja line, Amaechi recalled that the railway project was initiated by the Ibrahim Babangida administration to move iron-ore between the two steel plants in Ajaokuta in Kogi State and Aladja in Delta State, but it was never completed.

“We have now awarded the contract to complete and upgrade the narrow gauge line to include commuter services, so we are building 12 stations and 92 flyovers and bypasses. This is costing N80 billion to N100 billion and is about 310km long,” he said.

He added that the rehabilitation of the old Port Harcourt-Maiduguri narrow gauge line was also in the pipeline, but would be handled by U.S. engineering conglomerate, General Electric (GE), under a concession agreement.