N10.4trn railway project runs into fresh crisis

Garba Lado, the committee’s chairman, made the criticism during an inspection tour of facilities at the site of the project contractors, China Civil Engineering Construction Corporation (CCECC), in Lagos.

Lado also alleged that the $250-million (N30.5-billion) paid to the CCECC by the Federal Government as mobilisation was not appropriated.

In April 2006, the Exim Bank of China signed a memorandum of understanding (MoU) with the Federal Ministry of Finance for the $2.5-billion loan during the visit of the Chinese president to Nigeria.

The Federal Government had planned to utilise half of the loan for railway development.

Former president Olusegun Obasanjo flagged off the Lagos-Kano dual-standard gauge construction project phase 1 at Kajola, Ogun State 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 was 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 objected to how the contract was awarded to CCECC.

The committee advised the contractors to swing into action, while their documents should be rectified in accordance with the due process.

Earlier, the CCECC chief coordinator, Karl Leo, said his company tender was adjusted, and it 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, and 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. Compensation is yet to be paid to the affected 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.