Nigeria’s Railway Merry-Go -Round

I was reflecting on a related matter last week when news broke that Nigeria, now 57, may not develop a railway network after all: there is no money, Transportation Minister Rotimi Amaechi said on Thursday. He was speaking to journalists after he said he had briefed President Muhammadu Buhari on our railway dreams.  For the […]

I was reflecting on a related matter last week when news broke that Nigeria, now 57, may not develop a railway network after all: there is no money, Transportation Minister Rotimi Amaechi said on Thursday.

He was speaking to journalists after he said he had briefed President Muhammadu Buhari on our railway dreams.  For the first time, Nigerians heard through the Minister that the President is deeply interested in the rail subject. 

But while pointing out that his ministry has received approval for all the current projects, he drew attention to the perennially under-construction Lagos-Kano line, and the proposed Port Harcourt-Maiduguri.  “The money is not just there,” Mr. Amaechi said, “It is a total of about $16 billion and you don’t just pluck $16 billion from the sky.”

Mr. Amaechi is interesting because he is the first federal official since the civil war to demonstrate genuine official motivation about rail transportation.  In terms of contemporary rail questions, however, here is how he has single-handedly confused the discussion:

Speaking at the Quarterly Business Forum in Abuja on January 23, the Minister announced that the government had paid its full counterpart funding of N72 billion for the construction of the Lagos-Ibadan rail line.

He also stated, again quite curiously, that that payment was also the amount required to access a $30 billion loan Nigeria sought from the Chinese government, a loan he said had already been approved by China and was awaiting only the approval of the National Assembly. 

Interestingly, that statement came less than two weeks after China’s Foreign Affairs Minister, Mr. Wang Yi, announced in Abuja his country would invest an additional $40 billion in Nigeria.

“Nigeria and China are strategic partners; our relations have been developing well,” he said following a meeting with his Nigerian counterpart, Geoffrey Onyeama.  “China has already invested or financed a total number of $22billion projects here in Nigeria, another $23billion projects are on-going.”

That would be about $75 billion, but nobody is making clear in where the investment has gone, or is going.

Two months later, in March, Mr. Amaechi then said the government had concluded plans to borrow $6.1bn from the Chinese Export-Import Bank (EXIM) to complete all current rail projects by the end of 2019.

“Construction of the Lagos-Ibadan and the $US 1.2bn Kano – Kaduna lines have been targeted in the budget, as well as the first phase of the Coastal Rail line (Lagos-Calabar),” RailJournal reported him as saying while defending his Ministry’s 2017 budget at the National Assembly on March 28.  

It was three years ago, in November 2014, that the story broke globally of the Lagos-Calabar line, described as China’s single largest overseas contract project: 22-stops over 1,402 kilometers.  It was to be undertaken by China Railway Construction Corp. Ltd, (CRCC), of which CCECC is a part, for $11.97 billion. 

I confess I fell in love with the idea of that coastal rail right away, as I fantasized about how other lines connecting economic and business nodes in the Middle Belt and the North would help industrialize the country.

But Nigeria had been borrowing from China relentlessly, almost uncontrollably, during the Goodluck Jonathan years.  I commented on this and related issues in an August 23, 2015 story I called: “Borrowed By China.”

Urging President Buhari to inspect the China file closely to harmonize it, I recalled some fascinating takeaways from President Jonathan’s visit to China in July 2012.  Bloomberg News, for instance, reported that Nigeria had also signed an agreement on a $20 billion project that could lead to 20,000MW of electricity within one year.  

Like many others, that plan evaporated.  It is unclear now that Nigeria never undertook that harmonization.  Instead, the Buhari government, in the tradition of Nigerian governments not accepting the principle of continuity, has opted for loans and more loans, particularly from China.  

Thus, in addition to all the announcements made by Mr. Amaechi earlier in the year, Rail Journal again curiously reported on May 26 that the government had named a consortium, led by the United States General Electric (GE) and including South Africa’s Transnet and China’s SinoHydro, the “preferred bidder” for a concession to rehabilitate, finance and operate the entire Nigeria Railways network.

Mr. Amaechi must explain this confusion.  The Chinese, for their part, have kept straightforward records of their work in Nigeria.  For instance, while every Nigerian government since 1999 has claimed to be budgeting for and building the Lagos-Kano rail, the CRCC 2008 report says the company completed that project in 2003.  “We also supplied locomotives for the Nigeria Railway System and provided training programs for local technicians…We currently provide survey, design, construction and 5-year maintenance services for this multi-track railway between Lagos and Kano, which measures 2,733 km.”

In the 2009 annual report, CRCC writes that it “undertook 72 construction projects in overseas countries…[including] the railway project in Abuja of Nigeria.”  That is the same project that President Jonathan budgeted for, but never built.

Among others, in July 2012, then Information Minister Labaran Maku announced that the government had approved the construction of the re-designed Abuja light rail, for a contract sum of $823.5m. 

At that same event, FCT Minister Bala Muhammed also told journalists that the FCT had already obtained a loan from China for the “speedy” completion of the project in 2013.  But the project was neither begun, nor the $823.5m accounted for either by that government, or Buhari’s.

Nonetheless, in March this year, the current FCT Minister, Mohammed Bello, citing “the benefits that we are enjoying because of our friendship with China,” said EXIM will provide $1.79 billion for the second phase of the Abuja Rail, as approved by the government.

What about Abuja-Kaduna?  In the 2014 Annual Report of CRCC, the company said that of its projects overseas, the “…Abuja-Kaduna and Ankara-Istanbul High Speed Railway were open to traffic…”  

Really?  Remember that Buhari opened the rail line only in July 2017, two and a half years later.

What about the Lagos-Calabar?  Well, it never got started, and last February, industry source The StructuralEngineer reported that China and Nigeria agreed in July 2016 to an $11bn contract to build it, and that it would be completed before the end of 2018. 

Of course, it won’t, as Mr. Amaechi last week announced there is no money!  What is worse, his declaration comes just days after his Ministry published its latest Rail Development Plan, saying there are preparations for 10 new rail lines.

The question is whether the Buhari administration gives all these conflicting signals because it is confused or because it is insincere.   In 2010, the 18km, 1.8bn Mecca Metro in Saudi Arabia transported over 1 million Hajj pilgrims, including Nigerians, ferrying over 72,000 passengers per hour; the contract for it had been signed only two years earlier.  The Tanzania-Zambia Railway, which is 860-km long and has 320 bridges, 22 tunnels, two locomotive plants, was completed in just five years (1970-1975).  

Why are we all words?  Is there a persuasive explanation for this merry-go-round?