Amid national apprehension about Nigeria’s rising external debt, the federal government has pleaded with the National Assembly to approve a $5.3 billion Chinese loan request to enable it execute the Ibadan-Kano standard gauge rail line.
While disclosing its plan to commence skeletal operation on the Lagos-Ibadan railway mid September, the government has also directed the Chinese Civil Engineering Construction Company (CCECC) to complete the Lagos-Ibadan rail project on or before January 2021.
The Minister of Information, Mr. Lai Mohammed made the appeals during the inspection of the Lagos-Ibadan rail project alongside his transportation counterpart, Mr. Rotimi Amaechi and Managing Director of Nigeria Railway Corporation, Mr. Fidet Okhiria, among others.
The federal government sealed $5.575 billion loan agreements with the Export–Import Bank of China between December 10, 2010 and May 29, 2018, according to Debt Management Office (DMO) documents.
Of the total $5.575 loan agreements wrapped up with this timeframe, the document showed that China EXIM had already disbursed $3.313 billion while the federal government was left with an outstanding loan of $3.121 billion.
With this debt exposure and its implication for the country, Mohammed appealed to the National Assembly to approve a $5.3 billion Chinese loan request to enable the government execute the Ibadan-Kano standard gauge rail line.
He justified the decision of the federal government to borrow to fund infrastructure projects, saying there is nothing bad in borrowing, provided the funds are invested in infrastructure rather than services or consumption.
Mohammed claimed that the government “does not borrow money for overhead but for capital projects. There have been concerns about Nigeria’s borrowing from China and other countries.
“There is no better way to answer Nigerians as to what we have done with the money we have borrowed than this trip,” the minister said in a statement. On this trip, you have seen first hand the stations being constructed, the rail lines and the people who are working on the projects.
“Rather than arguing with critics, we opted to allow you (journalists) – the ears and eyes of Nigerians – to come and see for yourselves what we are doing with the money we are borrowing.
“We didn’t borrow money for services or overhead expenditure. We borrowed money for capital projects: rail; roads; bridges; power – infrastructure generally.”
Also during the inspection, Amaechi said $1.6 billion is being expended on the Lagos-Ibadan standard gauge rail line and the stations.
Amaechi, however, said there “will be no financial cost arising from the delay of the contract. The Chinese cannot be held responsible for the delay occasioned by the pandemic, adding that there is a clause for force majeure in the contract.
He warned that the probe of the loan by the National Assembly could cause further delay in the handing over of the project and hamper the borrowing plan for the Ibadan to Kano leg of the railway project, expected to cost about $5.3 billion.
He urged members of the National Assembly “to stop their investigation of the issue of loan and allow us to secure the loan for the project. They are not investigating corruption in construction, but rather the issue of loan.
“They should allow us get the loan for Ibadan to Kano, which is about $5.3 billion and not discourage lenders from borrowing us money for the project.”
On the railway operation, Okhiria said the corporation would commence skeletal passenger service on the Lagos-Ibadan Standard Gauge Railway in the middle of next month.
According to the NRC managing director, the low scale passenger service of 15 round trips a day will be from Yaba, in Lagos, to Ibadan, while full passenger service will begin in January 2021 after the delivery of the project by the construction firm.
He said NRC had acquired 24 new locomotives and a set of Diesel Multiple Unit (DMU) made up of eight coaches to facilitate the take off.
The project, originally due for completion in May, was slowed down by a number of factors, including underfunding, rainy season, and the COVID-19.
The virus had limited the construction workforce at each station, which stood at 200 before the pandemic, to 20 workers.
Source: THISDAY
