FEC approves contracts for resuscitation of Railways, others
By
Jun 18, 2009, 16:07

In pursuit of her avowed commitment to the implementation of the seven points agenda, the Federal Executive Council (FEC) has approved N114 billion ($76.250 million) for the purchase of 25 C25 EMPD diesel-powered locomotives for the reactivation of the Nigeria Railways Corporation (NRC). Also approved were contracts for agriculture and power projects.

The Minister of Information and Communications, Prof. Dora Akunyili who made the disclosure while briefing the media in company of the Minister for Transportation, Alhaji Ibrahim Bio on the outcome of the week’s Federal Executive Council at the State House on June 17 stated that the decision to acquire the locomotives was to strengthen the nation’s rail system in readiness for public private participation.

The Minister for transport who noted that ‘nobody would want to buy a dead horse’ which necessitates the conduct of all the necessary feasibility studies with an analysis of the economic viability of the Nigerian railway, stated that government wanted to create enabling environment and a viable system before inviting the private sector to participate in the entire exercise.

“A memo was presented and approved for the supply of 25 locomotives. As you are all aware, Nigerian Railways has been comatose for over 20 years, reasons being that there have been very low budgetary allocations. Secondly, being that the management for the railways system has not been very good and has not been profitable. So it has been the idea of Mr. President in his seven-point agenda to revive the Nigeria Railway Corporation so that it can give service to Nigerians.” He said.

According to him, in the bid to improve the railways government embarked on the procurement of locomotives which is one of the major keys for reviving the railway system and that considering the duration of producing locomotive which is between about eight to ten months, the president has given approval which council ratified. This he said would be followed by rehabilitation of tracks which is expected to be completed before the locomotive is delivered.

He stated further that the agreement also provided for capacity building of the Nigerian railway drivers, engineers and the staff generally to meet the challenges of the modern locomotives being procured which although are diesel powered uses electrical system as against the former ones that uses hydraulic system.

Responding to the question on consultations with stakeholders such as road transport unions, he said although no problems are envisaged from that quarter in the rehabilitation or functioning of the Nigerian rail transport, government is however trying to bring everyone on board. He noted that government is partnering with Oando and Dangote who are pure haulers, explaining that it will pay them to invest in rail and locomotive than what presently obtains by the number of trucks they put on the road which has further put pressure on the roads and its attendant risk.

“If Dangote today buys five locomotives, each will pull about 30 wagons and each wagon is equivalent to what a trailer carries, so five multiplied by 30 is about 150. The cost of fuel consumption for one locomotive is equal to same fuel consumed by one trailer, so it is economically wise. We are preaching that to all of them. I want to say that when General Electric came here, Dangote sought to have a discussion with them because he wants to buy locomotives to put on the track.” He explained further.

On safeguards against failures like earlier attempt by General Abacha administration’s attempt at revival of railway and the status of the Obasanjo administration’s deal with Chinese firms, the Minister of Transport explained,

“It is not similar because without iota of doubt, the process we are following is more transparent. The Chinese trains brought by the Abacha administration were 50; none of them today is on our rail track. They are all bad for reasons may be the technology is not as good as the one we are buying.

“What we are buying today is General Electric and they have been in the locomotive production business for over eight decades. For the question of the number of locomotives we have today in the Nigerian Railway Corporation, General Electric locomotives were bought 30 to 40 years ago. They are still the ones we are using today. So that is the difference between what happened before and what is happening now? We are going for the best.”

On the status of standard gauge and Chinese contract, the minister explained that there are two issues,
“Mr. President and all Nigerians want the standard gauge because it is faster and modern, but in the wisdom of Mr. President he wants to have a low hand input. The Nigerian rail track is there and with minimum cost we can be able to rehabilitate it particularly in the movement of goods from Lagos to Kano, that is the prime expectation of Mr. President to at least see movement from Lagos to Kano to reduce the pressure on our roads in the movement of these heavy trucks,

“Nobody has said the issue of standard gauge is terminated, it is not so. What is there is that Mr. President wants due process followed. That contract was not properly advertised, designed, no proper financial plan, these are issues that we have been directed to visit and we are at the level of completion.”

He also said because of the economic meltdown, “the former President based his payment schedule on excess crude oil and the current situation, there is no excess and there is cash crunch for this particular project. So it is beneficial for us to reconsider it to ensure that the national economy does not suffer and in the next few days you will hear about that project. We were asked to re-scope into phases up to five phases so we can execute in phases according to resources of the country.”

On the question of concessioning he said, “Mr. President has given a target that within the next 44 weeks, this rehabilitation and locomotives should dovetail into concessioning agreement. We don’t want the Nigerian Railway to be run by government any longer because past experiences have shown that if you use the same management system, it will still collapse. We are hoping that by June next year a concessioner would have been in place to take over the management of the railway system. If it is concession now nobody will want to buy a dead horse and that is why all the necessary feasibility studies have to be carried out and analysis of the economic viability of the Nigerian railway.”

Alhaji Bio also announced Council’s approval for the award of N2.74 billion for the construction of an inland port in Oguta, Imo State which would be serviced by inland waterways across South-east and South-south states.

“In the area of inland water transportation, a memo was also presented in addition to the dredging of the River Niger which is about to commence in July. Council also approved the construction of Oguta Inland River Port which has been on the drawing board at the sum of N2.7 billion with the completion period of 24 months. This is supposed to serve the inland water ways transportation particularly in the area of movement of goods and services within Imo, Anambra and Bayelsa states. I believe with this Mr. President has shown enough commitment in the execution of his seven-point agenda particularly in the area of transportation item.”

Other approvals by Council announced by the minister for information are contracts for agricultural projects including dams and irrigation projects to be constructed,

• Dams in Sabke, Katsina State (N1.19 billion); Ogbese, Ekiti state (N5.49 billion); Zobe, Katsina (N6.86 billion); New Nigeria Farmers project in Kwara (N2.82 billion); and other irrigation systems in various states (N3.71 billion).

• Two silos are to be built in Abuja (N4.17 billion) and Uyo (N1.73 billion),

• Release of N4.73 billion out from the Agriculture ministry’s 2009 budget, being 25 per cent of government grant for a tractor hiring scheme in conjunction with a private firm.

Also approved by the Council are,

• Contracts of N331.98 million for consultancy services for designing roads, bridges, drainages and telecommunications facilities for the arterial roads around the central area of Abuja.

• A variation of N578.57 million was also approved for the contract to complete the construction of the Shehu Shagari Presidential Complex in Abuja. The new contract sum now stands at N3.22 billion. The complex is meant to accommodate visiting heads of states and is expected to be completed in 24 months.

• Ratification of the president’s anticipatory approval of more power projects which include purchase of 160 330KV transformers for 1.92 million Euros, and N61.97 million;

• Variation of contract sum for construction of Gombe-Yola-Jalingo transmission line to the tune of $13.51 million (now $76.76 million) and

• Cost variation for the construction of switchyard for Aloji power station with the final cost at $7.63 million, plus N500.3 million.

Related stories:

President Yar’Adua flags off expansion of Abuja highways

FEC approves concession of Lagos-Ibadan expressway

NIPP Steering Committee approves N117billion for completion of ongoing power projects

© Copyright 2006 nigeriafirst.org