The President Muhammadu Buhari-led federal government on Friday, signed the Memorandum of Understanding (MoU) on the lagos-Ibadan and Calabar-Port Harcourt railway projects with the China Civil and Engineering Construction Company (CCECC) for $11.117 billion, saving $800 million from the initial estimated value of $11.917 billion.
The Minister of Transportation, Rotimi Amaechi, signed the agreement on behalf of the federal government, while the President of CCECC, Cao Baogang, signed for the company in Abuja on Friday.
At the signing ceremony in Abuja, Amaechi said the contract which was initially negotiated by the Goodluck Jonathan administration, will be completed in two years, and expressed optimism that federal government will meet its counterpart funding of 15%, the China EXIM bank will defray the remaining 85% of the project.
Amaechi said, “we were able to save 800 million dollars from the initial sum of the project which will be delivered in the next two years. This contract was awarded by the President Goodluck Jonathan regime at 11.917 billion dollars and when we took over at Ministry of Transportation we negotiated with CCECC and succeeded in reducing the contract sum from 11.917 billion dollars to 11.117 billion dollars.
“We are able to save 800 million dollars after negotiation with CCECC and that has to do with the fact that CCECC said prices of commodities like steel and other things have come down. “So, our gathering is to sign same contract but with different price and to make it legal from the initial price to the negotiated price.
“As soon as we conclude discussion with China Exim Bank, they will commence construction of the first segment,’’ he said adding that the first segment would be from Calabar, Uyo, Aba and Port Harcourt and it would include all the seaports on the route.
“The entire contract covers Calabar, Uyo, Aba, Port Harcourt, Yenagoa, Otuoke, Ughelli, Warri, Sapele, Benin, Agbor, Asaba, Onitsha, Ore, Ijebu Ode, Sagamu and Lagos. “My expectation is that the project can be completed in two years since funding won’t be a problem,’’ the minister said.
On his part, the CCECC boss, Baogang, said that the railway would contribute immensely to the economic development of the country and open doors of employment, adding that the company was ready to train Nigerians through building of factories, especially those in the grassroots.
“I know that railway contributes immensely to the economic development in Nigeria and it is very important.
“Railway will open doors for local people and I am sure that we will create more than 400 jobs with this project.
“We will execute this project with quality materials and with high speed and we hope to deliver in two years as expected by the minister,” he said.