Nigeria’s rail concession faces fresh hurdle as General Electric reportedly pulls out

Rail tracks connecting Abuja - Kaduna
Rail tracks used to illustrate the story

Indications emerged Wednesday that General Electric Co (GE) has pulled out of a long-term concession deal with the Nigerian government.

The deal signed by the Muhammadu Buhari administration has been repeatedly mentioned by officials as one of the successes of the rail sector in the country.

A procurement officer of GE told Reuters Wednesday that the company pulled out of the deal, struck to maintain and operate narrow-gauge rail lines across Nigeria.

The railway concession project was worth around $2 billion for two lines connecting cities in the northern part of the country to others in the south.

The concession was meant to cover about 3,500 km (2,200 miles) of existing narrow-gauge lines from the nation’s commercial hub, Lagos, through to Kano in the north. It is also expected to extend from Port Harcourt in the South-south to Maiduguri, Borno State capital, in the North-east.

A consortium led by GE had submitted the only bid for the project in partnership with Transnet CGETR.UL of South Africa, Dutch-based APM Terminals and China’s Sinohydro Consortium.

Although it remains unclear why GE pulled out of the concession; but Fola Fagbule, senior vice president and head of advisory at Africa Finance Corporation (AFC) which ran the procurement process after being appointed lead adviser by the government, said Transnet was in discussion to replace GE.

The Nigerian government, in its bid to ease transportation and facilitate commerce, has shown commitment to the rehabilitation of the railway system.

The government is yet to speak on the withdrawal by GE.

When the transport ministry was contacted, an official, who identified himself as Mr Agbor, declined to speak on the matter. He said the director of press had been replaced and the new director could not be reached as she is not ‘on seat’.

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