Lack of funds stalls N16tr railway projects across Nigeria

Several railway projects worth over $21.3bn (about N16 trillion) across the country have stalled due to lack of funding, findings by Daily Trust have revealed.

The development is threatening the federal government’s railway modernisation programme designed to connect all states of the federation. 

The projects include the Ibadan-Kano Standard Gauge Railway ($5.3bn); $11.17bn Lagos-Calabar coastal railway project; $3.02bn rehabilitation project for the Eastern Line (Port Harcourt-Maiduguri) and the $1.9bn Kano-Maradi railway project.

All the projects were incorporated in the 25-year railway roadmap unveiled during the administration of former President Olusegun Obasanjo which will expire in 2025.

The $11.17bn Lagos-Calabar coastal railway project which had been in the pipeline for almost two decades was in 2021 approved by the Federal Executive Council (FEC) during the Muhammadu Buhari-led administration.

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It would be recalled that in 2016, China and Nigeria signed an agreement for the over $11 billion contract to build the coastal railway which was to start before the end of 2018.

While the project did not take off, the federal government at the same time flagged off the Lagos-Ibadan project which is 157km and completed it in record time.

Along the line, the government also did the groundbreaking for the Kano-Katsina-Jibiya-Maradi-Kano-Dutse line which is being funded by a consortium of European financial institutions.

This was followed by the ground-breaking for the reconstruction of the Eastern rail corridor, the Port Harcourt-Maiduguri rail, at the cost of $3.01bn.

Then Minister of Information, Alhaji Lai Mohammed, who spoke at the time on the Lagos-Calabar project, said the route was critical because, after the Lagos-Kano route, the Lagos-Calabar coastal route would link all coastal cities in Nigeria. A route alignment was also announced.

The proposed route alignment would run from Lagos to Shagamu, Shagamu to Ijebu-Ode, Ijebu-Ode to Ore, Ore to Benin City, Benin to Sapele, Sapele to Warri, Warri to Yenagoa, Yenagoa to Port Harcourt, Port Harcourt to Aba, Aba to Uyo, Uyo to Calabar, Calabar to Akamkpa to Ikom, to Obudu Ranch; with a branch line from Benin City to Asaba, Onitsha Bridge and then Port Harcourt to Onne Deep Seaport.

“This particular project is very important, especially for our coastal economy. The cost of the project is $11,174,769,721.74 and we have six years for the completion of this project,” Lai said.

Also in March 2021, the former president flagged off the rehabilitation of the old narrow gauge from Port Harcourt-Maiduguri Eastern Railway line covering over 2000 kilometres.

In February 2021, the former Minister of Transportation, Rotimi Amaechi, inaugurated the 284km Kano-Maradi rail line which construction was to be completed in 2023.

The railway line links Katsina, Kano, Jigawa with Maradi, Niger Republic. 

How funding stalled projects 

After securing a $1.5bn loan from China to complete the Lagos-Ibadan standard gauge which is Lot two of the Lagos-Kano Standard Gauge, China is said to be non-committal on providing the loan for the Ibadan-Kano Lane.

This was why the federal government again segmented the project starting with Kaduna-Kano Standard Gauge which is being funded internally.

A source at the China Civil Engineering and Construction Corporation (CCECC) told our correspondent that the projects are in the stage of loan negotiation.

“The loan approval is the issue. Once we can get the loan approval, we are ready to start the work. Coastal rail is also facing the same loan issue.

 “For the purpose of economic revival and revolution, we have to complete the Lagos-Kano Standard Gauge which stops at Ibadan. Narrow gauge cannot support the economy to a large extent,” the source said.

As of September 2022, the federal government is said to owe China $4.09bn while China has not made a commitment on the loans for the coastal rail and Ibadan-Kano rail.

The new Minister of Transportation, Senator Saidu Alkali, who is inheriting the various railway projects, however, promised to ensure that the contracts were not stalled. He did not however disclose how the government would source funding for the projects.

Customs building to give way in 3 months for Apapa Ports connection 

Meanwhile, the minister yesterday assured that the Customs building obstructing the standard gauge to Apapa Ports would be removed in three months’ time.

Speaking during a meeting with the management and leaders of the Nigerian Railway Workers (NUR) at the  Nigerian Railway Corporation (NRC) headquarters, the minister also assured of the commitment of the Bola Tinubu-led administration to the railway modernisation programme.

He also gave the Nigerian Railway Corporation three weeks to complete the operationalization of the Asiwaju Bola Ahmed Tinubu Train Station at Apapa.

Daily Trust reports that the Customs building had stalled the linkage to the Apapa Port forcing the NRC to temporarily bypass it and create a track in order to start freight services on the Lagos-Ibadan Railway.

But the removal of the Customs building which three former ministers of transportation could not achieve, would increase the tracks connecting the ports to three.

Alkali said the discovery that the building was still standing after several engagements with the customs “requires urgent executive action.”

He said it is unfair that the building is preventing the completion of two standard gauge lines to convey containers from Lagos to Kano within three months.

Alkali also pledged to ensure the payment of the long unimplemented presidential approval for the upward review of their special allowances.

“I am assuring you that through personal contact and using administrative machineries, I will reach out to the acting Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, and the Chairman National Salaries, Incomes and Wages Commission to facilitate the removal of the Customs building at APTM and ensure speedy implementation of the presidential approval of increased special allowances for railway workers,” he said.

The minister commended China Civil Engineering Construction Corporation (CCECC) for the rail wagon assembly plant at Kajola, Ogun State, which is already assembling some wagons.

He stated that the plant should go into the container and coach assembly to boost economic activities, especially with the expansion of rail projects in the country.