Nigeria has signed a $3.9 billion (about N1.411 trillion) public private partnership agreement with the China Railway Construction Corporation Limited (CRCC) to build a new standard railway track from Abuja to Itakpe.
The contract also covers the construction of the Warri sea port. Under the terms, Nigeria will take 15 percent equity in the project while the CRCC will take 10 percent equity. The remaining 75 percent will be sourced from Chinese banks to execute the project.
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.
Minister of Transportation Rotimi Amaechi gave the details shortly after he signed the agreement with CRCC.
"The signing ceremony that we had today (yesterday) is the first PPP railway agreement for Abuja-Itakpe or Abuja- Baru-Itakpe and Lokoja and it is between Nigeria and CRCC.
"The agreement is 15% Nigeria's equity and 10 percent CRCC equity and then we borrow 75 percent as SPV from the Chinese bank," he explained.
Mr. Amaechi, who told CRCC to resume at the site immediately, also explained that "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 percent."
According to him, the entire rail facilities are being executed by CRCC and its subsidiaries.
On the Lagos-Ibadan rail facility, the minister told the contractor that it must be delivered on schedule.
He also said the ground breaking for the building of rolling stock production centre will be performed on November 8, 2019, barring all unforeseen circumstances.
"There is a need to also instruct both CCECC and CRCC to realise that we need to localise the technology and we need local participation of both Nigerian engineers and contractors," the minister said.
"We need you to work with us to develop the knowledge of Nigerians, that's why we emphasise on the universities we are asking you to build.
"We are expecting that not only will you build, you will provide us with lecturers until we can train our own lecturers," Amaechi charged CRCC.
The CRCC vice president Mr. Wang Wenzhong, said they are committed to building quality facilities in Nigeria.
"We also demand our subsidiaries to work hard for Nigeria and also the people. We want all our projects in Nigeria to be the best in terms of quality to meet the satisfaction of the people of Nigeria," he said.