Nigerians demand probe of alleged inflated Lagos-Ibadan rail construction contract

Minister of Transportation, Mr Chibuike Amaechi briefing State House Correspondents after a meeting with President Muhammadu Buhari at the Presidential Villa in Abuja on Tuesday (2/1/18)
Minister of Transportation, Mr Chibuike Amaechi briefing State House Correspondents after a meeting with President Muhammadu Buhari at the Presidential Villa in Abuja on Tuesday (2/1/18) 0015/2/1/2018/Callistus Ewelike/NAN

Nigerians have called on the government to probe an allegation that the contract for the construction of the Lagos-Ibadan rail line was inflated by about 360 per cent.

The Nigerian government said the contract for the construction of the 156-kilometres rail line, which was awarded to the China Civil Engineering Construction Corporation (CCECC) in 2016, cost taxpayers about $2 billion.

CCECC is a subsidiary of the Chinese engineering conglomerate, the China Railways Construction Corporation (CRCC).

But, the call for the probe of the contract followed recent reports that the Ghanaian government agreed to pay $2 billion to another subsidiary of the Chinese firm for the construction of a similar rail line estimated at more than thrice the length of the Nigerian system.

The Ghanaian contract

Last March, the Ghanaian government announced the signing of a $2 billion Memorandum of Understanding with the CRCC to finance the rehabilitation and construction of a 560-kilometre standard gauge railway line in the country.

Although reports said the MoU with the China Railway Construction Corporation with CRCC (International) has since been revoked for alleged “breach of confidentiality”, Nigerians are still interested in knowing how a similar contract back home cost more.

The Ghanaian rail line expected to run through designated stations and terminals at Aflao and Elubo was more than 414 kilometres longer than the Nigerian version of the project awarded to the same Chinese engineering construction conglomerate.

The Ghanaian Minister of Railways Development, Joe Ghartey, signed the agreement on behalf of his government, along with CRCC representative, Dou Yisuo, and the Managing Director of Lakeland Group of Companies, the local content partners of CRCC, Henry Djaba Jnr.

Under the agreement, Mr Ghartey said the Ghanaian government would not be funding the railway lines construction.

“The funding is to be arranged by CRCC,” he said. “Besides CRCC, another Chinese Company, Sinochem, one of the largest Oil Companies in China, is equally prepared to provide up to $3 billion as funding of railway construction projects throughout the country, backed by Crude Oil futures.”

Prior to the signing of the agreement, reports said Mr Ghartey travelled to Nigeria at the invitation of his Nigerian counterpart and former Minister of Transportation, Rotimi Amaechi.

The visit of the Ghanaian Minister of Railway Development to Nigeria, it was reported, was to specifically inspect and assess the construction of the railway system handled by the Chinese Conglomerate.

According to the Ghanaian minister, the construction of the Nigerian railway line was strikingly similar to the one proposed for Ghana.

Civil society groups kick

However, Nigerian civil society groups frown at the high cost of the Nigerian version of the contract, which is the same cost as Ghana’s despite the former being almost two-thirds shorter than the latter.

The Lead Director, Centre for Social Justice (CENSOJ), Eze Onyekpere, described the development as a brazen abuse of the debt procurement and contract award process, which calls for a probe and investigation by government.

“Nigerians should no longer keep quiet in the face of brazen looting of the treasury under the guise of development. There is absolutely no basis for the higher cost (of the contract) as the Lagos-Ibadan route is not a difficult ecological terrain.

“Beyond laying the tracks, we are not even getting modern electric or solar-powered trains, but outdated diesel engines in the name of modernization.

“Those behind this rot and looting should be brought to book,” Mr Onyekpere said in his Facebook post on Wednesday.

For the General Secretary, Nigeria Labour Congress (NLC), Peter Ozo-Esan, there is a general worry about the cost competitiveness in infrastructural development in Nigeria.

“Historically, we have always noticed that the construction of roads and the development of other infrastructure in Nigeria cost multiple times more than the cost in other countries,” Mr Ozo-Esan told Punch.

“No doubt, all rail line development is very, there is a need to invest more,” he said. “However, this needs to be done in a cost-effective manner, to give value for our money.”

Comparing the cost of the construction of railway lines in other places, like Ethiopia, with those in Nigeria, by the Chinese, Mr Ozo-Esan said in each case, the cost in Nigeria is always the highest.

He blamed the situation on the lack of transparency in the Nigerian budgetary process and the contract tendering process.

“What we pay for infrastructural development needs to be revisited very squarely if we are to benefit and develop from investments in these areas,” he said.

The Ministry of Transportation officials did not answer calls on Wednesday seeking clarification over the issue. They also did not respond to emails sent to them.


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