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Chinese, US firms disagree over splitting of Nigeria railway concession programme

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Chinese, US firms disagree over splitting of Nigeria railway concession programme

The much anticipated take off the concession of railway services in Nigeria by the end of October 2016 could not be actualised followed a last-minute disagreement between the Federal Government and the United States’ General Electric on involvement of a third party to the deal.

Said to be worth about $2.2 billion, the concession was aimed at having the foreign firm take over expansion and modernization of the rail lines and running railway services via the Lagos to Kano/ Kaduna axis and Port Harcourt to Maiduguri.

But a source said governments bid to leave part of the expansion project to a Chinese firm did not go down well with GE, which insisted on having the entire deal fully taken over by it.

The Minister of Transportation, Rotimi Amaechi, while throwing more light on the issue Thursday, gave reason for the delay in kick starting the programme.

“GE is proposing that they will carry out a two-year rehabilitation of the rail tracks and to have a concession period of 25 years within which to recover their investment,” Amechi stated.

He disclosed that government had not agreed with GE having the entire proramme run by them and for such a long period.

Besides the issue of long duration, a major cause of delay in the non take off of the project is the unresolved question of whether the earlier agreement with a Chinese firm, China Civil Engineering Construction Corp (CCECC) will still subsist.

Government had in 2013 signed deals of about $5 billion with CCECC to modernise and build railways in the North and South.

Wether that agreement will still stand, with the new one involving GE is the main issue in dispute now, said an officer of the Transport ministry.

But to resolve the gray matters, the two parties to the despite, including the Federal Government have agreed that a consortium of firms, led by the Africa Finance Corporation and Greenwich Financial Advisors will study the issue in contention and advise government on the way forward.

Nigeria’s passenger and freight railway system was built by the British colonialists in 1940s.

Emma Eke….

RipplesNigeria …without borders, without fears

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