It is now crystal clear that the federal government will continue to fund rail modernization and extension through foreign loans despite the huge debt burden already accrued.
Indications to this effect became rife as chairman, Senate Committee on Land Transport, Senator Adamu Aleiro, recently said negotiation for release of 85% loan by EXIM Bank of China for the completion of Ibadan-Kano standard gauge railway line formed part of discussions during President Bola Ahmed Tinubu’s visit to China in September.
He also disclosed that African Development Bank will soon release $350m for the completion of the single track standard gauge railway line from Kano-Maradi in Niger Republic.
The chairman stated further that to make the release of 85% foreign loan a reality the National Assembly has already appropriated and N530 billion in the 2024 supplementary budget for all projects that require counterpart funding.
This revelation has dispelled speculations hitherto making the rounds that the standard gauge rail projects initiated by the immediate past government based on loans (counterpart funding) have been jettisoned by the present government due to the burden of loan repayment within 35 years, based on Build, Operate and Transfer model.
While some stakeholders are of the view that government should first rehabilitate the narrow gauge railway line to complement the ongoing standard gauge projects others advised government to give priority to development of railway for goods transit only.
According to Segun Musa, Chief Executive Officer/Chairman, Widescope Internationl Logistics Company Limited, the federal government should have set up a committee to work out modalities on feasibility of the 30 years loan repayment period and how to use the tracks for commercial purposes.
He noted that the only way government can repay the staggering amount of foreign loans invested in rail development is for the management of NRC to concentrate on evacuation of bulk goods on long distance.
While commending government for its efforts to secure counterpart funding for completion of Ibadan-Kano and Maradi-Kano standard gauge railway line, Musa noted that the full economic potential of the Lagos-Ibadan corridor will be fully appreciated when it is extended to Kano.
According to him, Nigeria will reap economic gains from the two aforementioned projects and repay its Ioan in record time if service is dedicated to goods carriage.
Mr. Nnorom Ibekwe, however, said that the railway management in partnership with China Civil Engineering Construction Corporation should endeavour to complete the Ibadan-Kano standard gauge rail line for strategic reasons.
He noted that, when completed, goods destined for Maradi could be evacuated from Lagos to Kano by rail for onward movement to Maradi in Niger Republic by rail.
Nnorom explained that there was nothing wrong in securing foreign loans to build infrastructure that will be paid for in future and used by generations yet unborn.
According to him, Nigeria cannot continue to use the old narrow gauge railway line under the guise of lack of fund when other countries are sourcing for fund to develop their rail infrastructure.