About a week after the Federal Government announced the release of N72 billion as its counterpart fund for the construction of the Lagos-Ibadan standard gauge rail line, the Export-Import Bank of China has approved $1.275 billion (about N408 billion) loan for the project on behalf of the Chinese government.
While Nigeria is to bear 15 per cent of the cost of the project, China will shoulder 85 per cent for the first phase fast rail that will eventually terminate in Kano.
The Managing Director, Nigerian Railway Corporation (NRC), Fidet Okheria, said on Sunday that with the approval of the funds by the Chinese Exim bank, all was set for the commencement of the construction of the modern rail line from Lagos to Ibadan.
“The Exim bank of China has now approved the loan and the next stage is for the Minister of Finance to sign it to signal the beginning of the project,” he said.
He, however, said the final signing by the Chinese government for the project to commence could only come after two weeks when the country’s new year holiday would have been over.
The Minister of Transportation, Rotimi Amaechi, had last Monday said the Federal Government decided to release the N72 billion as its counterpart funds in full was to ensure that there would be no delay in the implementation of the project.
“On the construction of Lagos-Ibadan railway line, the Minister of Finance has been kind enough to release the counterpart funding in full. I think in the history of Nigeria, this is the first time that we are releasing counterpart funds in full so that there will be no delay,” he had said.
The contract was awarded to the China Civil Engineering Construction Corporation last year by the Federal Government and both parties had signed an agreement to that effect.
The new Lagos-Ibadan rail, spanning 156.65 kilometres, is a double line, which is the first phase of the new Lagos-Kano standard gauge line.
The contract for the 2,733km new Lagos-Kano rail was first awarded by the former President Olusegun Obasanjo administration in 2006 at a cost of $8.3 billion to the CCECC, but could not be executed due to paucity of funds.
It was rewarded to the same contractor by the President Goodluck Jonathan administration in 2012 for execution in six phases, starting with the Lagos-Ibadan stretch.
It was learnt that the new rail line would be built on the corridor of the existing narrow gauge Lagos-Kano rail line and but it would accommodate only modern locomotives and other rolling stock meant for standard gauge rail for faster movement.
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