FG: Why GE Pulled out of Railway Concession Deal

By Chineme Okafor in Abuja

The federal government Thursday gave reasons why American firm – General Electric (GE), pulled out of a planned $2.7 billion deal to concession and rehabilitate Nigeria’s narrow gauge railway, stating that GE was no longer in the business of transportation and had to hand over its interest in the deal to another firm.

Minister of Transportation, Mr. Rotimi Amaechi, said that prior to GE backing out of the deal, it had not signed any concession agreement with it or any of the firms involved but was still negotiating with them.

Amaechi said during an interview on the ‘The Morning Show’ of ARISE News Network, a THISDAY sister company, that GE did not abandon the railway deal on account of Nigeria’s economy, which economic experts said wasn’t doing very well even though the government believes otherwise.

“General Electric did not pull out. One thing that thrives heavily in Nigeria is rumour, I don’t know where you got that information, no concession agreement has been signed, none. We have been negotiating, there is no way you will get a concession agreement in one year,” said Amaechi, in the interview monitored in Abuja.

He explained: “What happened is that most of their business activities, they have dropped a lot of (them), I don’t know if it includes energy, transportation and all that. When they found out that they couldn’t continue in that line of business…because they were no longer in transportation business, the next company took over the lease, they didn’t pull out, it has nothing to do with our economy, they were excited about this thing.”

Amaechi, noted that GE told him they had for 11 years approached different governments of Nigeria to do the railway concession but weren’t successful because previous governments wanted to award contracts for the railway while that of Muhammadu Buhari, preferred the concession model.

He stated that South African firm, Transnet SOC Limited, which deals in pipeline, port, and rail construction would now take over from GE, and a Special Purpose Vehicle (SPV) will be set up with Transnet and other firms to do the job.

More details later…