Fed Govt to pay N71bn counterpart funding for six railway projects

The Federal Government is to partly fund six rail projects connecting virtually all regions of the country with a counterpart funding of N71.15bn this year.

Also, N15.1bn will be spent on the development of safety and security critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

A report on selected projects in the 2021 budget obtained by our correspondent from the Federal Ministry of Finance, Budget and National Planning in Abuja showed that in the rail sector, the government had mapped out six projects that it would partly fund this year.

The government stated that the N71.15bn would serve as counterpart funding for railway projects including the Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri), which was also described as an ongoing project.

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

Construction work is currently ongoing on some of the rail projects, while others are new projects, as physical construction work had yet to start on them.

Minister of Transportation, Rotimi Amaechi, had explained that the Lagos-Kano line (ongoing), which would be connected from the Ibadan end of the Lagos-Ibadan railway, would cost about $5.3bn.

On January 9, 2021, Amaechi declared that the construction of the Ibadan to Kano line would commence once the Chinese government approved its $5.3bn loan to Nigeria, as the Federal Government had given approval for the contract.

“We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

Meanwhile, a few of the rail projects had come under criticism, as many Nigerians and groups had faulted the locations where the projects were sited.

An example is the Kano-Katsina-Jibiya-Maradi in Niger Republic, which on January 11, 2021, the Federal Government announced that it signed a $1.96bn Memorandum of Understanding with Mota-Engil Group for the construction of the standard gauge rail project.

Amaechi signed on behalf of the Federal Government, while the Managing Director, Mota-Engil, Antonio Gvoea, signed on behalf of the contracting firm.

The $1.96bn rail line connects Nigeria and Niger Republic, as the new railway corridor, located in Northern Nigeria, would run through three states.

The states include Kano, Jigawa and Katsina and the 283.75km rail line would go through the territory of Niger Republic as far as Maradi.

This particular project had been greeted by widespread criticism. The Pan-Yoruba sociopolitical organisation, Afenifere, for instance, said many Nigerians were against the move by government to construct the rail line.

Afenifere’s Publicity Secretary, Yinka Odumakin, told our correspondent that it was unfortunate that the President, Major General Muhammadu Buhari (retd.), was more interested in constructing a project outside Nigeria than in developing bad roads within Nigeria.

Odumakin said, “It is an unfortunate development. We know the state of Nigerian roads. We know that our roads are in a very bad shape; for instance, look at the Lagos-Ibadan Expressway, the roads to the East, to Port Harcourt and the rest of them.

“They are not Buhari’s priority, rather his priority now is the line to Maradi in Niger Republic. They are more interested in their kings and kins who are Fulanis outside Nigeria than in Nigeria itself.”

He added, “It is unfortunate. So the Afenifere and many other Nigerians out there are not in support of this initiative. In fact, how can we support it?”

Meanwhile, aside from rail infrastructure, the report on selected projects in the 2021 budget listed other projects to be developed in the aviation sector, among others.

In the aviation sector, it stated that N3bn was for safety and security critical projects and airport certification nationwide.

“N10bn is for the construction of a second runway at the Nnamdi Azikiwe International Airport, Abuja,” it stated.

The report added, “N900m is for extension and asphalt overlay of MMIA (Murtala Muhammed International Airport) runway. N1bn for construction of new terminal building in Enugu.

“N200m is for construction of Abeokuta airstrip.”

Some selected projects in the power sector were also mentioned as infrastructure to be funded by the government this year.

A total of N1.3bn was earmarked for rural electrification access programme in federal universities.

Also, N160.83bn was for multilateral and bilateral funded projects such as the Zungeru power project, Abuja power feeding scheme, transmission access project, etc.

A N200m counterpart fund was named as part of the money to be provided by government for the development of the Mambilla Hydro Power project.

In the report, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the government was optimistic that there would be significant improvement in macroeconomic performance by the second quarter of 2021.

This, according to her, was because the Federal Government was already implementing several measures to overcome the country’s fiscal constraints.

Ahmed said, “In addition to the Strategic Revenue Growth Initiatives, we are leveraging technology and automation, plugging fiscal drainers and ensuring more effective independent revenue monitoring.”

She, however, noted that the Federal Government remained mindful of the need to provide safety nets to cushion the impact of reform measures on the vulnerable segments of the population.

The minister explained that the goal of fiscal interventions would be to keep the economy active through carefully calibrated regulatory/policy measures designed to boost domestic value-addition.

Ahmed said this would de-risk the enterprise environment, attract external investment and sources of funding, among others.

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