The Federal Government is likely to pay an additional N300 billion if it wants its rail projects to become a reality. This was made known by the Minister of Transportation, Rotimi Amaechi. This follows a more detailed analysis of the contract terms with the China EXIM Bank.
The extra cost the FG will pay on the project, which is expected to take off as soon as the 2017 budget is passed, is due to compensation, insurance, tax and survey. These costs are to be borne exclusively by the Federal Government, as the contract excludes the Chinese partner from paying any of the above mentioned fees.
Amaechi, while talking to some lawmakers on oversight function, also explained that with this development, the China EXIM Bank, the funding partner, will fund only 78% of the rail project and not 85% as earlier touted. “The problem we have is that the China EXIM Bank is not funding 85 percent of the project but they are asking for 78%” Amaechi said. According to him, these were the same terms applicable to the recently commissioned Abuja-Kaduna standard gauge rail project.
As if fearing criticism from the lawmakers for overlooking these finer details, Amaechi also pointed out that the Minister of Finance was responsible for sorting out the negotiations and contract terms while his Ministry plays only an implementing role.
