The Federal Government says the foundation of the Lagos-Ibadan segment of the Lagos-Kano rail project will be laid before the end of the first quarter of this year.
It also confirmed that it had secured $1.5bn from the China Exim Bank to commence work on the Lagos-Ibadan rail line project.
The Minister of Transportation, Rotimi Amaechi, disclosed these when he appeared before the Senate Committee on Land Transport to give a status report of the ministry’s 2016 budget, as well as present that of 2017.
Amaechi said the target of the government was to commence work on the rail project from the Apapa seaport down to Ogun State and then to Ibadan.
The minister said, “In the first quarter of 2017, the foundation of the Lagos-Ibadan segment two of the Lagos-Kano rail project will be laid. The implication here is that we will start the Lagos-Ibadan rail line before the end of March.
“Our target is to commence from the Apapa seaport down to Ogun and then to Ibadan. That is our plan. The counterpart funding is ready, but don’t forget that we are borrowing the money from China. The China Exim Bank is processing it. Our 15 per cent is ready; so, we are waiting for China Exim Bank. They have managed to release and approve $1.5bn for the Lagos-Ibadan line.”
“It is also envisaged that segment three of the Lagos-Kano rail project, which is the Kano-Kaduna stretch, as well as the first phase of the coastal railway line Lagos-Calabar, commencing from Calabar to Port Harcourt with extension to the Onne Deep Seaport will commence after the conclusion of the negotiation of a financing loan agreement,” he added.
Amaechi urged the National Assembly to approve the Federal Government’s plan to borrow $30bn, adding that the money was needed to finance some rail projects.
He said, “The National Assembly needs to give us approval for the borrowing plan so that we can commence work. We can’t sign the loan agreement with China unless there is an approval from the National Assembly.
“What the National Assembly has approved is the counterpart funding, but we need the approval to borrow the remaining money. If you look at $6.1bn in naira, and we are paying 15 per cent, you will know that the remaining amount is coming from China and until we have approval, we cannot do anything.
“Even now, the China Exim Bank has approved $1.5bn for the Lagos-Ibadan line. We are not able to sign the loan agreement because we need the approval of the National Assembly.”
The minister said all rail projects that were not completed under the 2016 budget had been included in the 2017 budget.
The Chairman of the committee, Senator Gbenga Ashafa, said the Senate would work with the minister to consolidate on the achievements and performances recorded last year.
Ashafa said “We must work together to ensure that we consolidate on the achievements and performances already recorded in the past year, while critically interrogating all the challenges faced in the 2016 budget cycle as well.”