THE TIDE
Senate committee faults N996bn rail contract
Justus Awaji • Wednesday, Dec 5, 2007
The Senate Committee on Land Transport on Monday criticised the $8.3
billion (about N996 billion) Nigerian railway modernisation contract
for alleged lack of due process.
Sen. Garba Lado, the committee’s chairman, made the criticism during an
inspection tour of facilities at the China Civil Engineering
Construction Corporation (CCECC) the project contractors site in Lagos.
Lado also alleged that the $250 million (about N30 billion) paid to
CCECC by Federal Government as mobilisation was not appropriated.
In April 2006, the Exim Bank of China signed a MoU with the Federal
Ministry of Finance for the $2.5 billion loan during Chinese
president’s visit to Nigeria.
The Federal Government of Nigeria planned to utilise half of the loan
for the railway development.
Former President Olusegun Obasanjo flagged off the Lagos/Kano standard
dual gauge construction project phase 1 at Kajola, Ogun, on November
28, 2006, with 48 months completion period.
Lado also expressed dissatisfaction with the way and manner the entire
project was executed without regards to due process in the past.
“We at the National Assembly are not aware of this project. It is when
we summoned you (the stakeholders) that we discovered that due process
was not followed.
“Even the $250 million paid as mobilisation was not appropriated, so
something has to be done to actualise the project,” Lado said.
He said in spite of the payment of mobilisation fee, there were no
significant progress at the project site.
Lado stressed that the mere fact that the firm had enough equipment on
the site could not justify its non-performance at all.
A cross-section of the committee members raised serious questions on
how the contract was awarded to CCECC.
The committee unanimously advised CCECC to swing into action, while its
documents should be rectified in accordance with the due process.
Earlier, CCECC Chief Coordinator, Mr Karl Leo, had said his company’s
tender, as adjusted, was the fairest out of the three companies that
bid for the project.
According to him, the whole process of contract negotiation lasted more
than one and half months, saying that out of the $1.1356 billion that
should have been released, only $250 million was paid.
Leo said the Chinese government was expected to contribute $500 million
for the first phase of the project, including survey, design and
construction under the MoU.
He attributed the non-payment of compensation as the factor hindering
the project, as compensation had yet to be paid to the communities to
be affected by the project.
Other problems, he said were lack of import waivers for its equipment
and materials for the project, including permit to import cement.
