The Federal Government needs more time to negotiate a railway concession project with the United States’ General Electric, the Minister of Transportation, Rotimi Amaechi, has said.
Reuters reported that both sides had confirmed talks on the GE being granted a railway worth around $2bn, with Nigeria’s economic growth hampered for decades by the lack of roads or functioning railways.
The government, suffering from a slump in revenue from crude exports, wants to boost exports of food and other non-oil products.
“The GE is proposing a two-year rehabilitation of the rail tracks to be carried out by them and to have a concession period of 25 years within which to recover their investment,” Amaechi said on Wednesday.
“The government has not agreed and that is what our advisers will sit with the GE to agree,” he added.
The country has already signed two deals worth around $5bn with China Civil Engineering Construction Corp, part of China’s state-owned railway construction firm, to modernise and build railways in the North and South, the Transport ministry said last month.
The Africa Finance Corporation and Greenwich Financial Advisors will assist the government in the talks on the railway concession.
Nigeria’s passenger and freight railway system was mainly built by British colonial rulers before independence in 1960.
A GE spokeswoman, Patricia Obozuwa, said the government had formally notified GE that it was “initiating a competitive procurement process” following the expression of interest by the firm.
She said the process was “to award a concession for the rehabilitation, financing and operation of the narrow gauge railway system” on lines connecting Lagos with Kano, and another linking Port Harcourt with Maiduguri.
“This procurement process is still ongoing and as such, we are not at liberty to disclose full details at the moment,” she added.
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