Understanding the Big Spending on Railway


Nseobong Okon-Ekong attempts to unravel reasons behind the relentless construction of a modern railway system by the Muhammadu administration at seemingly overwhelming cost

One of the evident achievements of the President Muhammadu Buhari administration is the assertion to put something new in place in the railway system of the country.  Attaining a contemporary railway structure for Nigeria is one of the key pillars to boost the nation’s economy.

At different events, Mr. Rotimi Amaechi, Minister of Transportation has reiterated the commitment of the Federal Government to link the entire country through rail. The effort, he said, will cost between $36 and $40 billion to achieve complete interconnectivity of Nigeria.

For over 50 years, since 1927, successive Nigerian administrations did very little or no development in the railways. As at 2013, an estimated N3.7 trillion had been spent on the railways from the Sani Abacha regime to that time. The late President Umaru Yar’Adua had revoked a $8. 3bn contract, part of which was spent on the purchase of 50 locomotives at $500 million by Abacha.

In 2003, N7 billion was allocated by the Olusegun Obasanjo administration for the completion of the Nigerian Railway Corporation (NRC) workshops and repair of grounded engines. The Federal Government was criticized for constructing one kilometer of railway line at N1. 22 billion.  Many believed that the amount of N3. 7trillion was enough to complete light rails across the country.

Critics of the high expenditure in railway construction argue that there are international benchmark prices for construction of kilometres of either roads or rail lines across similar terrains. But sources inside the Ministry of Transportation and the Nigeria Railway Corporation explained that apart from environment and ecological conditions, there are other peculiarities that led to the high cost.

Construction of the Lagos-Ibadan which was scheduled for completion in December 2018 was delayed for many reasons. The project which has faced delays now has a new completion date in May 2020. Some of the factors that impeded progress were heavy rains, hostility of communities occasioning deployment of soldiers to protect the railway workers from hoodlums and armed robbers. Unsure of what may happen during the 2019 national elections, the CCECC management vacated the construction site, but they have since returned, particularly when Amaechi, was again returned as minister in-charge of the project.

Another factor which has led to high cost of construction of railway lines in Nigeria, particularly in the thickly populated Lagos corridor of the Lagos-Ibadan railway line is the cost of relocating some facilities. For instance, it will cost over N5 billion to find a new base for the Nigerian Army 81 Ordinance Corps in Yaba. Other facilities which need to be relocated in order to make way for the new railway line include  oil and gas and water pipelines within the Lagos axis, level crossing obstruction, bridges, buildings and high voltage lines.

Some of the cost intensive features of the Lagos-Ibadan railway line are four extra-large bridges, 11 larges bridges, four medium bridges, 2017 culverts, 40 railway no-level crossing and 31 pedestrian overpasses

*Minister of Transportation, Mr. Rotimi Amaechi says it will cost Nigeria between $36b and $40b to complete the interconnectivity of the country by rail

*For 31 years, between 1927 and 1958, only two minor extensions were carried out; Kafanchan – Bauchi and Bauchi – Maiduguri

*For over 50 years, from 1970, successive Nigerian administrations did very little or no development in the railways

*In 2006, a $8.3bn contract for the modernization of Lagos-Kano standard gauge was awarded to CCECC

*In 2017, the Muhammadu Buhari administration reached an understanding with GE (General Electric) and the consortium was expected to bring $2.7 billion to fix the old narrow gauge, which is about 3,500 kilometres rail line from Lagos to Kano; and on to Funtua. The syndicate of companies led by GE was also supposed to fix from Port Harcourt to Maiduguri; with a provision to recover its expenditure over 20 to 30 years.

* The Abuja-Kaduna rail project cost $874m. China’s EXIM bank provided $500m as a concessionary loan for the project. The remainder was provided by the Federal Government. The Abuja-Kaduna segment is the first to be implemented as part of the Lagos-Kano standard gauge project.

*In August 2012, a $1.53 billion contract was awarded to CCECC to deliver the 312km long Lagos-Ibadan rail line, which is a double-track standard gauge line within four years. Completion date was fixed at 2016; with extensions to Apapa Sea Port and associated railway stations, commenced in March 7, 2017. The project which has faced delays was previously scheduled for completion in December 2018 now has a new completion date in May 2020.

 *There are indications that variations will occur in the budget as a result of emerging details not included in the original contract details

*The Federal Government approved Ministry of Transportation’s request of $2.3 billion loan for the construction of Lagos-Calabar coastal railway project expected to cut across most states in the South East and South. The sum of $1.8 billion would come as a loan from Chinese banks, with the government providing a counterpart fund of $500 million

*On May 18,2018, the federal government awarded $6.68 billion to CCECC to build a major segment of railway from Lagos to Kano