• Approves N30bn intervention fund for mining
•US conglomerate seeks 25 years to recover investment
By Tobi Soniyi in Abuja
The Federal Executive Council (FEC) has approved the plan by the Ministry of Transportation to concession the rehabilitation of the Port Harcourt-Maiduguri and Lagos-Kano rail lines to U.S. conglomerate, General Electric (GE), at no cost to the government.
The Port Harcourt-Maiduguri rail line would depart from Port Harcourt, pass through Aba, Umuahia, Enugu, Makurdi, Jos, Gombe, Bauchi to Borno, while the Lagos-Kano line would depart from Lagos to Abeokuta, Ibadan, Ilorin, Kano, Funtua, Zaria and terminate at Kaura Namuda.
GE confirmed last week it would be investing about $2 billion under the concession programme for railway projects in Nigeria.
Also, council approved the sum of N30 billion as intervention fund for the mining sector.
The approvals were made know yesterday by the Minister of Information and Culture, Alhaji Lai Mohammed, while briefing State House correspondents on the outcome of the FEC meeting at which President Muhammadu Buhari presided.
At the briefing were the Minister of Mines and Steel Development, Dr. Kayode Fayemi, and Minister of Transportation, Mr. Rotimi Amaechi.
On the planned concession of rehabilitation of rail lines to GE, Amaechi said: “I’m sure you are aware of the attempt to concession the railways to General Electric; council approved the advisers that would sit with GE as our own experts to negotiate with the firm on the concession.”
According to him, the narrow gauge rail line would to a great extent, assist the agriculture, mines and steel development sectors in the transportation of the extracted minerals.
“We are rehabilitating at no cost to government the Port Harcourt-Maiduguri line which includes Port Harcourt, Aba, Umuahia, Enugu, Makurdi, Jos, Gombe, Bauchi to Borno.
“Then the Lagos to Kano line will include Lagos, Abeokuta, Ibadan, Ilorin, Kano, Funtua, Zaria and to Kaura Namuda. We are rehabilitating all of them.
“It is essentially to encourage freight movement. We have over 30 million metric tonnes of freight on the Lagos-Kano route, of which presently we are moving slightly above 100 metric tonnes.
“While the Port Harcourt to Maiduguri line is currently moving nothing, but we are anticipating 11 million metric tonnes that can be moved from Port Harcourt to Maiduguri. So the rehabilitation will encourage the movement of cargo and passengers.
“GE will do everything required from rehabilitation, investment and other auxiliary railway infrastructure,” he explained.
Amaechi said GE had proposed to manage the rail lines for 25 years in order to recover its investment, but the Nigerian government has not approved the proposal.
“That is what our advisers will sit with GE to agree,” he declared.
Mohammed also said FEC ratified the president’s anticipatory approval for the Ministry of Mines and Steel Development to qualify to access the national resources fund.
He said: “You will recall that in August, FEC approved the road map for the growth and development of the mining sector.
“In recognition of Mr. President’s campaign promise to Nigerians and in particular his consistent statement on diversification particularly in agriculture and mining sector, council ratified his approval of a N30 billion intervention fund for the mining sector.
“It will be highly focused on exploration. Exploration is at the heart of mining. If you don’t search you won’t find.
“You have heard all sorts of talk about how rich Nigeria is in mineral resources, but the quantity, quality, the geological prospectivity have been a challenge because we have neglected the sector for such a long time.
“If we really must attract mining investment into the country, we need investment grade geological data for those who are in mining to be engaged in the sector.
“And having looked at what has been done in other countries even smaller than Nigeria, countries like Burkina Faso spending averagely $300 million a year on exploration and Ghana and Cote d Ivoire and so on and so forth.
“This is why council approved this for mining and this is significant because this is for access to the natural source development fund which accounts for 1.68 per cent of the Federation Account. It is the equivalent of the Ecological Fund and the Education Trust Fund.”
Shedding more light on the fund, Fayemi added: “It is meant primarily for agriculture, mining and the water resources sectors. This will cover exploration primarily but also research and development in partnership with our universities.
“It will also cover security and mining in partnership with the Ministries of Interior and Defence and the Department of State Security just to tackle the menace of illegal mining across the country.”
Fayemi said the fund would also support small-scale miners with land.
He said FEC also laid emphasis on the importance of inter-ministerial coordination.
In this regard, Fayemi explained that his ministry would work with the Ministries of Transportation, Power, Works and Housing, Health, and Environment on how to engender safer mining practices.
“Whatever we do eventually could help us build a multi-sectoral focus on mining and also encourage private sector investment in the sector,” he added.
He said government was already negotiating with sovereign investment in mining in order to attract private capital to the sector, as well as access to the Nigerian Stock Exchange.
“The guidelines will be ready in a month,” he said.