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Transportation receives fresh boost as FG okays $2.3 billion coastal rail project

The Federal Government has approved $2.3 billion for the construction of a rail line that will run across Nigeria’s coastal states.

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Nigeria's Coastal Rail Project

The Federal Government has approved $2.3 billion for the construction of a rail line that will run across Nigeria’s coastal states.

Chinese banks will provide $1.8 billion (78.26%) of the fund in the form of a loan facility. The Federal Government, on its part, will contribute the balance of $500 million (21.74%) as counterpart fund.

The Minister of Transportation, Rotimi Amaechi, who disclosed this yesterday, during his valedictory press conference, stated that the project would cover Lagos, Delta, Anambra, Edo, Rivers, and Cross River States. It will also connect the central rail line that goes to Abuja, he said.

“the government has approved for us to seek a loan of $1.8bn to start work on the coastal rail. The coastal rail is from Lagos to Calabar. So we are taking the segment that starts from Port Harcourt to Warri to join the central line that goes to Abuja.

“And then another segment that starts from Benin to Onitsha. But as it is going to Onitsha, it will join the central line again at Agbor. The Port Harcourt-Warri line will join the central line at Warri. The Benin-Onitsha line will join the central line at Agbor. They are all part of the coastal rail line, which is about $11.1bn.”

He noted that the Federal Government had equally given its approval for the development of the central line.

Funding for the project: Speaking further, the Minister disclosed a Special Purpose Vehicle would be used to borrow the money from China, on behalf of the Federal Government. In other words, the Government will not be raising the capital itself. However, it will make a 15% equity contribution to the project while the contractor makes a 10% equity contribution. The Special Purpose Vehicle that would borrow the outstanding 75% would be constituted.

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“The Federal Government will give a sovereign guarantee to enable them to get a quick loan. In turn, the contractor will give us a performance guarantee. The performance guarantee means that since you have concessioned this project to me after the completion, I will run the seaport and the rail line in such a way that I will pay back in 20, 30 or 40 years time, depending on the agreement reached.”

Why it matters: The planned coastal rail line project is an important development due to the many ways it could contribute towards the development of the Nigerian economy. The project itself will create jobs opportunities for Nigerians. More so, it would catalyse economic activities by encouraging easier and more efficient transportation across the country.

Ronald Adamolekun is a creative writer with proficiency in journalism, financial reporting, financial analysis and imaginative writing. However, his core competency lies in fiction and short story writing as well as feature writing. He is a graduate of English and Literature from Covenant University, Ota, Nigeria.

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Appointments

Joe Biden appoints Nigerian-born Funmi Olorunnipa Badejo as Counsel

Nigerian-American, Funmi Olorunnipa Badejo has been appointed as a member of the office of the White House Counsel.

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U.S President-elect, Joe Biden, announced the appointment of Nigerian-American Funmi Olorunnipa Badejo as a member of the office of the White House Counsel, to serve as an Associate Counsel.

He announced it this week in a statement seen on his transition website.

A part of the statement reads:

  • “The Counsels are experienced and accomplished individuals, have a wide range of knowledge from various fields and will be ready to get to work on day one.”

What you should know about Funmi Badejo

  • Funmi Olorunnipa Badejo, before the announcement, was General Counsel of the House Select Subcommittee on the Coronavirus Crisis, chaired by House Majority Whip, James E. Clyburn.
  • Other government roles she has served include serving as Counsel for Policy to the Assistant Attorney General in the Civil Division of the U.S. Department of Justice, Ethics Counsel at the White House Counsel’s Office, and Attorney Advisor at the Administrative Conference of the United States during the Obama-Biden administration.
  • She started her career as an associate with the law firm of Manatt, Phelps & Phillips, LLP and was also a Legal Counsel at Palantir Technologies Inc.
  • She is a graduate of Political Science from the University of Florida, with a Master of Public Administration (MPA) from Harvard University and holds a Law Doctorate from the University of California School of Law.
  • She becomes the 3rd Nigerian American to be appointed under the Biden Government.

Biden’s transition committee said the new Counsels would work under the direction of White House Counsel, Dana Remus, and “help restore faith in the rule of law and the accountability of government institutions.”

In case you missed it

  • Nairametrics reported last month that United States President-elect, Joe Biden, selected a Nigerian-born attorney, Adewale Adeyemo, as the Deputy Treasury Secretary.
  • Osaremen Okolo, 26, was also appointed as COVID Policy Advisor and a member of the COVID-19 Response Team.

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Corporate Press Releases

Global Credit Rating reaffirms Sovereign Trust Insurance Plc ‘A-‘rating

Global Credit Rating Limited has reaffirmed an A-rating for Sovereign Trust Insurance Plc.

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Sovereign Trust Insurance blames IT failure for delaying its 2019 financial statement

Global Credit Rating Limited, an international rating agency, has reaffirmed an A-rating for Sovereign Trust Insurance Plc.

According to a press release signed by the firm’s Deputy General Manager, Olusegun Bankole, and seen by Nairametrics, the insurance firm has consistently maintained its rating for over a decade now.

The key drivers that helped in the reaffirmation of the A-rating by the firm are;

  • Consistency in paying her claims obligations over the years, as captured in an earlier solvency and operational report for financial institutions in Nigeria and other allied businesses, released by the rating agency in December 2020.
  • Listing of rights issue in 2019 which helped to increase the shareholders’ funds of the company to N8.2 billion as at Q3 2020, up by 31% Year-on-Year. This played a catalyst role in maintaining the A-rating status of the firm.
  • The capital adequacy of the firm was also pivotal.

According to the information available on the website of the rating agency, the A-rating reflects high claims-paying ability, strong protection factors, modest risk which may vary over time due to economic and/or underwriting conditions.

This fact was buttressed by a section in the press release which reads:

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  • Sovereign Trust Insurance Plc has great potentials for growth in the years ahead, considering some of the strategies that have been put in place to propel its operations. Global Credit Rating noted that the company has shown a great deal of consistency in her claims obligations to her numerous customers spread all over the country.”

About Global Credit Rating Limited

  • Global Credit Rating Co (Pty) Ltd (GCR) operates as a credit rating services provider. The Company ratings for banks, financial institutions, insurance, corporate and public sector debt, and structured finance serves customers worldwide.

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Manufacturing

Notore chemicals shuts down 500,000 MTPA fertiliser plant for turn around maintenance

Notore Chemicals has shut down its fertiliser plant for turn around maintenance, in expectation of significant improvement in the Plant’s reliability index.

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Notore Chemical Industries Plc, Notore Chemical's plant at Onne, Rivers State, Company result, Fertilizer, Jobs, Profit, Notore Chemical Industries 2019 H1 Financial Statements

Notore Chemicals has shut down its fertiliser plant with a 500,000MTPA nameplate capacity for maintenance, in order to restore the plant’s productivity and facilitate a sustainable bounce back in operations.

This information became general knowledge after a notification issued by the Company Secretary, Mrs. Otivbo Saleh, was published on the website of the Nigerian Stock Exchange.

According to her, Notore Chemical Industries Plc had to shut down its fertiliser plant to pave way for the commencement of the Turn Around Maintenance, expected to return the Plant to its 500,000 MTPA nameplate capacity and improve the reliability index to 95%.

The TAM exercise was initially impacted by the COVID-19 pandemic, as the disruption to global businesses occasioned by the COVID-19 pandemic and its attendant restrictions by Governments all over the world affected the timely delivery of procured spares and the arrival to the site of Vendor Service Men (VSM).

Barring any unforeseen circumstance, the Turn Around Maintenance which has started should be completed on 8 March 2021.

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  • The company’s 2020 audited financial report tells a tale of effete operation, as the company made a Gross loss of N2.9 billion, due to the cost coming from the company’s operation completely eroding all the revenue generated from its operating segment.
  • The company managed to post a positive operating profit of N9.5billion at the back of N18.8billion revenue from contracts with customers. However, this was not enough to set the company on the path of profitability, as the heavy loan book of the company impacted its profitability in 2020.
  • Upon the completion of the TAM programme, the company expects a significant improvement in the Plant’s reliability index and sustained daily production output of 1,500MT.

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