The immediate past Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Sunday debunked the allegation that a substantial part of the $1bn Chinese loan obtained for a railway project was diverted.
Okonjo-Iweala, in a statement issued by her media adviser, Mr. Paul Nwabuikwu, also said that contrary to the allegation, the Kano-Lagos rail project was not part of the projects listed for funding for the Chinese loan.
President Muhammadu Buhari had last Monday queried the Ministry of Finance over alleged diversion of the foreign loan obtained for the rail project by the administration of former President Goodluck Jonathan.
Specifically, the President was seeking clarification on the alleged diversion of $600m, which was part of a $1.005bn loan obtained from the China-Exim Bank for the construction of a standard gauge rail line linking Lagos to Kano.
But while reacting to the allegation, Okonjo-Iweala, who spearheaded the negotiation of the loan during her time as finance minister, said the China-EximBank kept and disbursed funds for approved projects to contractors based on milestones.
Giving a breakdown of the loan and how it was utilised, the former minister said that $500m was used for the expansion of four international airport terminals in Lagos, Kano, Abuja and Port Harcourt, $500m for the Abuja light rail project, $984m for the Zungeru hydro-electric power project and $100m for the Galaxy backbone project
Okonjo-Iweala, in the statement, noted that even if the alleged project was on the list of China-EximBank funded projects, diversion of any Chinese funds would have been extremely difficult because the terms of the contract and the processes would simply not have permitted such action.
The statement reads in part, “We have continued to receive media inquiries regarding an allegation reportedly made by the Permanent Secretary, Ministry of Transport, Alhaji Mohammed Bashar, that a substantial part of a $1bn loan obtained from the China-EximBank by the Jonathan administration for a Kano-Lagos rail project was diverted to other projects.
“I want to state categorically that there is no truth in the reported allegation. Anyone who is interested can cross-check with the China-EximBank or the Chinese Embassy.
“It is noteworthy that even though President Buhari, in his reported comments on the allegation, made no reference to Dr. Okonjo-Iweala, rightly stressed the need for due process and transparency in the execution of public projects, a sponsored media campaign has once again been launched by political elements to make the former minister the culprit in a non-existent scandal.
“The alleged diversion has no substance for the simple reason that the Kano-Lagos project was not even among the projects presented for funding by the China EximBank for several strategic infrastructural projects across the country. In fact, it was the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-EximBank. But in the end, no funds were assigned for the Lagos-Ibadan rail project by the China-EximBank.”
The funds, according to her, were released directly to the Chinese firm executing the contract only after the presentation of a duly certified proof of work by the Federal Ministry of Transport, based on the agreed milestones.
