Fitch Report: Chinese company dominates Nigeria’s N10.5tn railway projects

 

The United States-based Fitch Solutions’ latest report on Nigerian railway system has revealed that a Chinese company, Chinese Civil Engineering Construction Corporation, has handled the majority of railway projects in Nigeria worth over $25.51bn (N10.5tn)s.

The report, titled ‘Nigeria Rail: Near-Term Focus On Northern Region With Long-Term Upside For Southern Projects’, said Chinese financing had supported CCECC to handle most rail projects in the country.

The report, however, listed other companies that are major players in the Nigerian railway sector.

It read in part, “China Civil Engineering Construction Corporation has dominated the railway construction sector in Nigeria, supported by Chinese financing.”

The breakdown of the top rail projects handled by CCECC shows that the approved Lagos-Calabar coastal railway project covering 1402km was awarded to the Chinese company for $11.10bn.

Also, the Abuja-Itakpe-Warri rail line project with a contract value of $3.90bn, sponsored by China Railway Construction Corporation and EXIM Bank of China, was awarded to CCECC, Julius Berger and Sinohydro Corporation, another Chinese company, alongside General Electric. The project is still at the planning stage.

Also at the planning stage is a 334km Ogun intercity railway line with a contract value estimated at $3.51bn. The project is scheduled to be handled by CCECC.

The Port Harcourt-Maiduguri rail line rehabilitation project covering 1443km is under construction at a contract value of $3.2bn. The project is being handled by CCECC.

Also, the 156km Lagos-Ibadan rail project was completed in 2021 by CCECC at a contract sum of $1.7bn.

Other rail projects awarded to CCECC include the Ibadan–Ilorin with a length of 200km; Ilorin – Minna, with a length of 270km; and Minna – Abuja with a length of 300km.

The 187km Abuja – Kaduna line, which was completed in 2016 after five years, was awarded to CCECC at a cost of $876m. The 204km Kaduna – Kano project is handled by CCECC for $1.2bn.

The CCECC manages most construction work for the railway sector in Nigeria, which has been supported by Chinese financing.

The Federal Government had sought loan facilities from Chinese lenders to implement several infrastructural projects, including standard gauge rail lines.

In a document titled, ‘Status of Chinese loans as at September 30, 2021’, the DMO disclosed that 15 projects were funded with Chinese loans. Four of the 15 projects are rail-related. The loan agreement between Nigeria and China on rail-related projects is put at about $2.47bn.

A $500m loan was disbursed for the Nigerian railway modernisation project (Wu- Kaduna section) with an agreement date of December 20, 2010. Another $500m agreed on November 7, 2012, was disbursed for the Abuja light rail project.