Nigeria: Delay in securing Chinese loans derailing Port-Harcourt-Maiduguri rail projects
The Nigerian government has revealed that delay in securing Chinese loans is derailing the construction of the Abuja-Kano and Port-Harcourt-Maiduguri rail projects, as 85% of the loans required are expected to be funded by Chinese financiers.
This was disclosed by Nigeria’s Transport Minister, Mua’zu Sambo in a press briefing on Friday.
He insisted the FG has covered its 15% of obligations to the contractors and is being delayed by financing arrangements for the remaining 85%.
What he said: The Minister of Transportation, Mua’zu sambo noted that the Abuja-Kano and Port-Harcourt Maiduguri rail projects are ongoing but there is a challenge with the 85 percent foreign loan yet to be secured.
“We have been driving these two projects solely through appropriation, which is part of the 15 percent which Nigeria is supposed to contribute.
“Indeed I can tell you for sure that with respect to the Kaduna-Kano rail we have paid completely to the contractor the 15 percent obligation of the Federal Government.
“Until we have the 85 percent component, the project will have to be continually funded through the appropriation,” He added.
He also disclosed that the takeoff of the Transportation University in Daura was also being delayed by administrative challenges as it ought to have commenced in September but there are certain challenges being encountered.
“Some of the challenges are administrative and efforts are being made to clear them with the National University Commission and the Federal Ministry of Education,” he said.
What you should know
Recall Nairametrics reported last year that The Federal Government revealed it is discussing with the London-based bank, Standard Chartered Bank Plc, over the funding of two rail line projects expected to cost about $14.4 billion, as against the earlier plans to get the loans from Chinese banks.
The 2 rail projects include the eastern line that links Port Harcourt with Maiduguri and the extension of the Lagos-Ibadan rail line to Kano.
Ex-Minister of Transportation, Rotimi Amaechi, said, “We’ve moved away from China in some of our projects. Finance Minister Zainab Ahmed is overseeing the talks with the emerging markets-focused financial institution about arranging the infrastructure loans.’’
Earlier this year, while expressing concerns over the Kano-Kaduna railway project, he said “The Chinese are not funding the way they used to fund us and up till now, we are yet to conclude the loan for this project. So we are funding this project from the budget.
