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President Buhari To Probe $1billion Loan For Rail Projects


President Muhammed Buhari Monday in Abuja called for an explanation from the Ministry of Finance on the foreign loans obtained for rail projects but diverted to other purposes.
Speaking at the end of a presentation on the Ministry of Transport by the Permanent Secretary, Mohammed Bashar at the Presidential Villa, President Buhari said that it was disappointing to find that foreign loans obtained in line with signed agreements were moved from one project to another.
“I hope that due process was followed before such diversions were carried out. Taking money from one project to another has to be done properly,” Garba Shehu, his senior special assistant on media and publicity, quoted the President as saying.
Mr. Buhari was reacting to the specific instance of the diversion of a substantial part of the loan of USD1.005 billion from the Chinese Exim Bank, obtained for the construction of a standard gauge rail line linking Lagos to Kano but which was moved elsewhere.
The permanent secretary had informed the President that only USD 400 million of that loan remained with the Ministry of Finance.
The president regretted that government had, over the years, failed to meet its counter-part funding obligation on some projects, leading to such projects being left uncompleted or abandoned.
He added that there was a clear need to streamline, harmonize, and prioritize on-going projects in the transportation sector.
The permanent secretary of the ministry also briefed the president on other challenges facing the transport and maritime sectors such as encroachment on railway land, lack of security on inland waterways and the confused nature of agreements between the Nigeria Ports Authority and ports concessionaires.
The $1.1billion million agreement was signed in September 2012 between Nigeria and China Exim Bank.
The fund, according to the then Minister of Finance, Ngozi Okonjo-Iweala, was for the execution of three “high priority impact projects,” in the transport and Information Communication Technology sectors of the economy.
The projects, scheduled for completion in 2015, included the Abuja Light Rail, four airport terminals and the Galaxy Backbone ICT infrastructure.
Mrs. Okonjo-Iweala signed the agreement in Beijing, the Chinese capital, on behalf of Nigeria, while the Managing Director of China Exim Bank, Sun Ping, signed for the bank.
The minister said the construction of the light rail project handled by the China Civil Engineering Construction Corporation (CCECC) would gulp $500 million; the four state-of-the-art airport terminals to be located in Abuja, Kano, Port Harcourt and Enugu would take $500million, while the Galaxy Backbone ICT infrastructure will take $100million.
Those who worked out the final details of the agreement with the officials of the Chinese bank included former Ministers of Aviation and the Federal Capital Territory (FCT), Stella Oduah and Bala Mohammed respectively as well as the former Minister of State for Works, Bashir Yuguda; the Director-General of the Debt Management Office (DMO), Abraham Nwankwo, and former Special Adviser to the President on Performance Monitoring and Evaluation, Sylvester Monye.
The light rail project was meant to help improve transportation for residents of the Federal Capital Territory, especially workers, while the backbone was to help improve service delivery in areas like education and health while empowering the youth with better connectivity to the rest of the world.
She said the four new airport terminals were to help create jobs and ensure that Nigerian air travellers enjoy good services.
The minister said the facility was obtained under a concessionary term of 2.5 per cent interest over 20 years, with a grace period of seven years.
One part of the intra-city rail network was to extend from the city centre to Kubwa and the Nnamdi Azikiwe International Airport, while the second would run from the city centre to Masaka in Nassarawa State.
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