Chinese firm delays delivery, cites exchange rate issues
ALTHOUGH a huge sum of $849,750,903.00 (about N170 billion) has been invested in the construction of a 186-kilometre standard gauge rail line from Abuja (Idu Station) to Kaduna, the project is far from completion. The amount was obtained by the Federal Government from the China Export and Import (EXIM) Bank as a loan facility.
The Chinese construction company handling the project, China Civil Engineering Construction Corporation (CCECC), is two years behind in delivering the rail transportation venture.An official of the firm cited what he called ‘fresh hurdles,’ including exchange rate issues, as impediments to the completion of the project.
Efforts to get the Ministry of Transportation comment on the project were not successful as phone calls and text messages to top officials in Abuja did not yield any results.
According to a contract agreement signed with the Federal Government on October 22, 2009, the Chinese construction firm was expected to complete the job in 46 months which should have been in December 2014. Yet, at present, most of the critical aspects of the project are still under construction.
Former President Goodluck Jonathan, citing insufficient resources to fund the nation’s entire budgetary needs, had announced that his administration had secured about $900,000,000.00 from the China Export and Import Bank, through the Federal Ministry of Transportation with the active support of the then Finance Minister, Dr. Ngozi Okonjo-Iweala.
The credit facility which was granted under the permission of the Chinese government, stipulated that the loan would be released in tranches by way of shipment of hardware such as steel rail tracks, structural equipment, earth movers, concrete bridges, Chinese trucks, concrete sleepers, precast T-beams, for the laying of rail tracks covering 187 kilometres.
Other components of the project such as the provision of modern railway engines, cabins of various categories, personnel, securing frequency band for communications, are the sole responsibility of the Federal Government through the Transportation Ministry.
However, investigations reveal that the project which is a Build, Operate and Transfer (BOT) initiative of the past administration may be suffering because those behind it are no longer in government.
Another reason for the slow pace on the loan-funded job, according to a source, is weak monitoring or supervision by the Federal Ministry of Transport which has the duty to ensure timely completion as stated in the contract agreement.
But the current Minister of Transportation, Rotimi Chibuike Amaechi, has upon assumption of duty pledged to engage all parties to the agreement to ensure the early completion of the project.
The minister’s intervention is crucial, given the budgetary allocation of N202,000,000,000 to the Transportation Ministry’s capital project envelope in the 20I6, out of which NI,302,73,886 and N2I6,797,393,980 are for overheads. But the ministry’s personnel cost is to take NI2,494,680,094.
When The Guardian sought clarifications from the NCC headquarters on why the frequency was yet to be released for the Federal Government’s rail project, an official of the commission at the front desk said the NCC did not entertain investigations into such issues, saying they were exclusive to the commission. Attempts to also speak with the commission’s head of media and public relations were also rebuffed by the official who insisted that the NCC website was the best option.
Investigations carried out at a cross section of work stations in Abuja and neighbouring corridors showed that progress has been at a snail speed, the fact that the rail project is being funded by a loan facility project notwithstanding.
According to an investigation, the level of track laying so far is about 80 per cent completed though it had been about 70 per cent just before the last general elections.
It is expected that the remaining 20 or 30 per cent work on track laying as well as completion of the nine stop stations should have been completed by now.
Also, none of the proposed nine stop stations has been completed, even as the pace of work remains slow. When The Guardian visited the offices of the Chinese company along Airport Road, as well as the Iju Work Station of the company, a top official who asked not to be named said the firm was prepared to complete the job but was faced with new challenges which are being addressed.
Part of the problem, according to him, is the dwindling value of the naira, which makes it difficult to complete certain contents of the bill of quantity captured with the old rates.
“I can tell you confidently that the track laying is over 90% completed and our men are on site working. The only problem we are experiencing is stealing of our rail pegs by miscreants. This is really giving us cause for worry because we are yet to deliver the job to the Federal Government, and so we are paying extra cost to hire personnel to secure our installations. This costs a lot of money. Again, there is the issue of building a corridor fencing around the rail tracks to secure them. This was not factored into the initial agreement, yet very essential to safeguard the work we have done.
“These are some of the issues. But as I said, these and others are being looked into,” the official said.The construction of Abuja-Kaduna rail project is part of the Federal Government 25-year Strategic Modernisation Programme of the rail transport sector. Other projects in the programme include: the I,342.50-kilometre Lagos-Kano rail line; 181-kilometre Lagos-Ibadan route; the 200-kilometre Ibadan-Ilorin route; 270-kilometre Ilorin-Minna route; 145-kilometre Minna-Abuja and finally the Minna-360 kilometre Kano-Minna rail line.
There is hope, however, that with the present administration’s determination to ensure complete infrastructural development in the country, due attention will be paid to the completion of the project.
This is important so that several speed train engines and new model cabins procured from General Electric (GE) as well as scores of wagons and crude carriers by the last administration are not abandoned to rot away.