Nigeria has signed a US $3.9bn public private partnership agreement with the China Railway Construction Corporation Limited (CRCC) for the construction Abuja-Itakpe railway project.
The contract was signed by both parties at the headquarters of the Federal Ministry of Transportation in Abuja. Minister of Transportation Rotimi Amaechi made the announcement and said that the agreement is 15% Nigeria’s equity and 10% CRCC equity and then borrow 75% as SPV from the Chinese bank.
Abuja-Itakpe railway project
“The signing ceremony that we had today is the first PPP (Public Private Partnership) railway agreement for Abuja-Itakpe or Abuja-Baru-Itakpe and Lokoja. Part of the agreement is that CRCC 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%,” said Minister Amaechi.
According to Mr. Amaechi the entire rail facilities are being executed by CRCC and its subsidiaries. The contract also covers the construction of the Warri sea port. The CRCC will operate both the rail and sea port, recover the money, pay back the debt and hand over the facility to Nigeria under the PPP that would last for 30 years.
The minister noted that the rail line is one of the longest in Nigeria now, stressing that besides the narrow gauge is the Itakpe-Warri Rail line, which Julius Berger got close to completion before it was later abandoned.
Nigeria’s rail system consists of 3,505 km of 3 ft 6 in (1,067 mm) gauge lines and 507 km of standard gauge lines. Efforts are underway to develop the Cape gauge network as well as construct a new standard gauge network that can help transportation through this means to be suitable.