FG, GE-led Consortium Sign Interim Agreement on Railway Concession

Following its award of preferred bidder status by the Federal Government of Nigeria in May 2017, an international consortium last Friday in Washington D.C, United States, signed an agreement to proceed with the interim phase of the Nigerian narrow-gauge railway concession.

Initiated by General Electric, (GE), the world’s premier digital industrial company, the consortium is comprised of SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider.

In the interim phase of the rail concession, remedial works will be carried out on part of the narrow-gauge rail line system to make it technically and economically operable. Additionally, a joint operation will be established between the consortium and the Nigeria Railway Corporation (NRC) with an initial supply of 10 locomotives and 200 wagons to augment the existing rolling stock in Nigeria.

This programme is expected to deliver an increase in the number of available locomotives, thus increasing the frequency of passenger and freight rail services. In addition, freight haulage capacity by the end of the first 12 months of the interim phase is expected to increase roughly 10-fold, from its current less than 50,000 metric tons per annum to about 500,000 metric tons per annum.

Speaking on the occasion, Lazarus Angbazo, CEO of GE Nigeria, said: “GE is committed to the sustainable development of Nigeria and as such we are delighted to have reached this crucial stage of the project to revamp and revitalise the country’s legacy rail infrastructure system. The consortium looks forward to commencing execution of this interim phase with the continued support of the federal government and the Ministry of Transportation. As operations begin, our strong partners, such as Transnet and SinoHydro, will bring their strong operating and development skills to the forefront.”

Following the commencement of the interim phase, the consortium will conclude negotiations with the federal government on the terms of the substantive phase of the concession agreement that will expand service to up to 200 locomotives and associated rolling stock.

This would see to the comprehensive rehabilitation of Nigeria’s narrow-gauge rail infrastructure and the return of rail transport as a key element in enabling the country’s socio-economic development.
The Chief Executive of Transnet International Holdings, Mr. Petrus Fusi, said: “We are pleased to be a partner in this ground-breaking concession and look forward to the successful execution of the interim phase with the government and the opportunity to add value.”

Similarly, SinoHydro Chairman, Mr. Ding Zhengguo, noted: “This announcement is a step closer to the opportunity to transform rail infrastructure and transportation logistics in Nigeria; a country with huge potential.”
He added: “We are very excited to partner this resourceful consortium to deliver value.
“APM Terminals has been actively investing and participating in Nigeria’s logistics infrastructure since 2006, and we are proud to be a part of this project to improve access for the Nigerian hinterland to the global logistics chain,” David Skov, Head of Terminals IMEA, added to the statements.

According to the Minister of Transportation, Hon. Rotimi Amaechi, “This milestone project is an unprecedented commitment by the Federal Government of Nigeria, which, combined with the GE-led consortium’s drive to modernising Nigeria’s rail infrastructure, will add immense value to Nigeria’s long term economic growth and productivity.
“This will be an important catalyst for small and medium enterprises and a key provider of almost incalculable socio-economic benefits for the many Nigerian towns and villages through which the rail network passes.”