NIGERIA: CHINA CHANGES ITS MIND
Posted on 19 March 2009 by Railways Africa Editor
On 12 March, the Chinese government reversed its decision to provide $2.5 billion counterpart funding to the Nigerian federal government for the execution of the $US8.3 billion rail modernisation project initiated by the administration of former President Olusegun Obasanjo. China now says it is only committed to the provision of a $500 million concessionary loan while the federal government must obtain the balance of $2 billion from Chinese banks at the prevailing interest rate.
Minister of transport Alhaji Ibrahim Bio disclosed this at the current investigative public hearing organised by the House Committee on Land Transport into the Lagos-Kano and Ajaokuta-Itakpe-Warri rail projects. TEEM Nigeria Limited was engaged by the federal government to supervise and monitor both projects. Were the Kano project to be cancelled, Bio told the hearing, the federal government would be obliged to pay between $1.1 billion and $1.4 billion in compensation, in terms of the agreement under which the contract was awarded to the China Civil Engineering Construction Company (CCECC).
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