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International Consortium Signs Interim Phase Agreement with Nigeria for Rail Concession
Following its award of preferred bidder status by the Federal Government of Nigeria in May 2017, an International Consortium last Friday in Washington D.C, signed an agreement to proceed with the Interim Phase of the Nigerian narrow-gauge railway concession.
Initiated by General Electric, the world’s premier digital industrial company, the Consortium is comprised of SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider.
In the interim phase of the rail concession, Remedial Works will be carried out on part of the narrow-gauge rail line system to make it technically and economically operable. Additionally, a joint operation will be established between the Consortium and the Nigeria Railway Corporation (NRC) with an initial supply of 10 locomotives and 200 wagons to augment the existing rolling stock in Nigeria.
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This program is expected to deliver an increase in the number of available locomotives, thus increasing the frequency of passenger and freight rail services. In addition, freight haulage capacity by the end of the first 12 months of the interim phase is expected to increase roughly ten-fold, from its current less than 50,000 metric tonnes per annum to about 500,000 metric tonnes per annum.
Speaking on the occasion, Lazarus Angbazo, CEO of GE Nigeria said “GE is committed to the sustainable development of Nigeria and as such we are delighted to have reached this crucial stage of the project to revamp and revitalize the country’s legacy rail infrastructure system. The Consortium looks forward to commencing execution of this Interim Phase with the continued support of the Federal Government and the Ministry of Transportation. As operations begin, our strong partners, such as Transnet and SinoHydro, will bring their strong operating and development skills to the forefront.”
Following the commencement of the Interim Phase, the Consortium will conclude negotiations with the Federal Government on the terms of the substantive phase of the concession agreement that will expand service to up to 200 locomotives and associated rolling stock. This will see to the comprehensive rehabilitation of Nigeria’s narrow-gauge rail infrastructure and the return of rail transport as a key element in enabling the country’s socio-economic development.
Chief Executive of Transnet International Holdings, Mr Petrus Fusi said, “We are pleased to be a partner in this ground-breaking concession and look forward to the successful execution of the Interim Phase with the government and the opportunity to add value.”
Similarly, SinoHydro Chairman, Mr. Ding Zhengguo mentioned, “This announcement is a step closer to the opportunity to transform rail infrastructure and transportation logistics in Nigeria; a country with huge potential.” He added “We are very excited to partner with this resourceful consortium to deliver value.”
APM Terminals has been actively investing and participating in Nigeria’s logistics infrastructure since 2006, and we are proud to be a part of this project to improve access for the Nigerian hinterland to the global logistics chain.” – David Skov, Head of Terminals IMEA added to the statements.
According to the Minister of Transportation, Mr. Rotimi Amaechi, “This milestone project is an unprecedented commitment by the Federal Government of Nigeria, which, combined with the GE-led Consortium’s drive to modernizing Nigeria’s rail infrastructure, will add immense value to Nigeria’s long term economic growth and productivity.” “This will be an important catalyst for small and medium enterprises and a key provider of almost incalculable socio-economic benefits for the many Nigerian towns and villages through which the rail network passes. “he added.
The headquarters of Heritage Bank at Victoria Island, Lagos, was besieged on Thursday by members of the labour union, protesting the recent dismissal of 1,000 support workers.
The National President of the National Union of Banks, Insurance and Financial Institutions Employees, Comrade Anthony Abakpa, led the demonstration, condemning the bank’s management for what he deemed a lack of adherence to due process in the termination of employment contracts.
Speaking during the protest, Comrade Abakpa asserted that the leadership of Heritage Bank failed to follow established protocols before executing the mass layoffs.
He emphasised the union’s commitment to pursuing justice for the affected workers, vowing to escalate their demands until the bank’s management rectifies the situation.
“We will intensify our demands for justice,” declared Comrade Abakpa, urging the bank’s management to take corrective action to address the grievances of the dismissed workers.
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, clarified that Nigeria is not utilising its foreign reserves to bolster the naira, despite recent fluctuations in reserve levels.
Speaking from Washington DC, where he is attending the International Monetary Fund-World Bank Spring Meetings, Cardoso highlighted the influx of $600 million into Nigeria’s reserves account within the past two days.
While the naira has experienced a notable appreciation against the dollar in recent weeks, climbing over 40% from approximately N1,900/$ to about N1,000/$1, Nigeria’s foreign reserves have been dwindling. As of April 15, reserves dropped to approximately $32.29 billion, marking the lowest level in over six years.
Cardoso emphasised that the shifts in reserves are typical for any country, where various financial obligations, such as debt repayments, necessitate withdrawals.
He stated, “What you’ve seen with respect to the shift in our reserves is normal in any country’s reserves where, for example, debts are due and certain payments need to be made. They are made because that is also part of keeping your credibility.”
Continuing, Cardoso underscored the dynamic nature of the market, advocating for a system driven by willing buyers, willing sellers, and price discovery.
He emphasised, “The shift in our reserves has really little or nothing to do with defending the naira, and that is certainly not our objective.”
Dangote Petroleum Refinery has made headlines by announcing a further reduction in the price of diesel, dropping it from ₦1200 to ₦1000 naira per litre.
The refinery’s decision comes on the heels of its recent supply at a significantly reduced price of ₦1200 per litre, which was introduced three weeks ago, signifying a remarkable 30 per cent decrease from the previous market price of approximately ₦1600 per litre.
This substantial reduction in diesel prices at Dangote Petroleum Refinery is expected to reiterate positively throughout various sectors of the economy, potentially serving as a catalyst in alleviating the persistently high inflation rate in the country.
In a statement last week, Aliko Dangote, Africa’s wealthiest individual and the owner of the refinery, expressed his optimism regarding the potential impact of the price reduction on inflation in Nigeria.
“I believe that we are on the right track. I believe Nigerians have been patient, and I also believe that a lot of goodies will now come through. There’s quite a lot of improvement because if you look at it, one of the major issues that we’ve had was the naira devaluation that has gone very aggressively up to about ₦1900,” he remarked.
As anticipation builds around the implications of this move by Dangote Petroleum Refinery, stakeholders and consumers alike remain hopeful for the positive effects it could bring to the Nigerian economy in the coming months.
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