The Nigerian government has revealed that the delay in securing Chinese debts derailed the construction of Abuja-Kano and Port-Harcourt-Maiduguri railway projects, as 85% of the loans required are expected to be financed by Chinese financiers.
This is disclosed by Nigeria’s Minister of Transport, Mua’zu Sambo at a press briefing on Friday.
He insisted that the FG has covered 15% of its obligations to contractors and is delayed through 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 progressing but there is a challenge of 85 percent foreign loan that is yet to be secured.
“We are driving these two projects only through the allocation, which is part of the 15 percent that Nigeria should contribute.
“In fact I can tell you for sure that in relation to the Kaduna-Kano railway we have paid the contractor in full the 15 per cent obligation to the Federal Government.
“Until we have 85 percent of the component, the project must continue to be funded through appropriations.” He added.
He also revealed that the takeoff of the Transportation University in Daura was also delayed by administrative challenges because it was supposed to start in September but some challenges were encountered.
“Some of the challenges are administrative and efforts are being made to clear them up by the National University Commission and the Federal Ministry of Education,” he said.
What you should know
Remember Nairametrics late reported year that The Federal Government revealed that it is discussing with the London-based bank, Standard Chartered Bank Plc, to finance two rail line projects expected to cost about $14.4 billion, against previous plans to obtain loans from Chinese banks.
The 2 railway projects include the eastern line linking Port Harcourt to Maiduguri and the extension of the Lagos-Ibadan railway line to Kano.
Ex-Minister of Transportation, Rotimi Amaechi, said, “We are moving away from China in some of our projects. Finance Minister Zainab Ahmed led talks with emerging market-focused financial institutions about arranging infrastructure loans.”
Last year, while expressing concerns about the Kano-Kaduna railway project, he said”The Chinese are not funding the way they funded us before and until now, we have not finalized the debt for this project. So we are funding this project from the budget.