FG Says Revenue From Railways Cannot Repay Chinese Loan

Minister of Transportation, Rotimi Amaechi, on Monday, said that all the loans taken from China to build railways could not be repaid from rail business due its its low economic viability.

Amaechi who disclosed this during a monitored interview on Arise TV said that some of the rail projects would not be completed under president Muhammadu Buhari’s administration.

The 156-kilometer Lagos-Ibadan railway costs $1.5bn and it is funded by a $1.3bn loan from the Export-Import Bank of China and about $182m from the Nigerian government.

China has yet to release the loan of $5.3bn, which is needed to extend the railway from Ibadan in the country’s south to Kano.

The Abuja- Kano railway was valued $1.5bn with $500m borrowed from China under Goodluck Jonathan. This sums to over $7.1bn for the three lines alone.

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“You are looking at economic viability, I am not aware of anywhere in the world please help furnish me with the information where rail line have been used to payback such loans.

“Nowhere in the world. If you leave the rail as it is, it is not economically viable in terms of cash. What makes its economic viability is the fact that it provides services for those who are involved in other economic activities,” Amaechi said.

He said it was laughable that people who were opposed to the Chinese loan were now clamouring for rail ways to pass through their villages.

Amaechi said, “I’m happy you are asking that question. I thought we were being criticised for taking the loan. Now, everybody is asking: when are you bringing it down to my village, not even to the city.

“Because we don’t have time, Covid or no Covid, we will commence construction with the money funded from the budget, between Kano and Kaduna.

“When the loan negotiation has been completed, we will commence the Ibadan to Abuja. We believe that we should be able to complete the Kano- Kaduna one before the end of the government, while the one from Ibadan to Abuja may be some few months after we leave office. But before we leave office, we should have been able to take it to over 80 per cent completion.”

According to him, as soon as the government receives the Chinese loan, it will commence the construction of the Ibadan to Abuja railway

“Before the end of this month, we should commence the construction of the Kano-Kaduna railway. We have already mobilised the contractors with some funds.

“We will fund it initially from our budget, but pending when the loan facility or the negotiation for the loan facility has been completed,” he said.

The minister noted that rail proceeds moved from the N70m revenue that accrued to the Abuja Kaduna rail to N350m as at May.

“This means once we remove the operational cost, we have started paying back the loan even though that will not be the only source of repayment,” he added.

The minister further argued that there was no clause in the loans signed by the administration or past administration that mortgages any of the country’s national assets to China.