The Contentious Abuja-Kaduna Railway – Whose achievement is it?

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The Contentious Lagos-Kano Railway – Whose achievement is it?

 

The Claim

 

On Thursday January 4, 2018, President Buhari commissioned 10 new coaches for the Abuja-Kaduna Rail. On the same day, Senator Ben Murray Bruce of Bayelsa State tweeted:

Governor El-Rufai, of Kaduna State, then responded to the Senator:

The senator again countered the governor’s claims with this tweet:

We therefore set out to fact-check the claims as follows:

  • That the achievement regarding the Kaduna train which President Buhari took a ride in was ENTIRELY the handiwork of the Jonathan government
  • That the Obasanjo Administration designed the Lagos-Kano dual track standard gauge rail system and the Abuja Light Rail
  • That the Obasanjo administration raised the financing and started the EPC (Engineering, Procurement & Construction) for the Lagos-Kano dual track-standard gauge rail system and the Abuja Light Rail
  • That the Yar’Adua – Jonathan administration stalled both projects for two years
  • That the construction of the Abuja-Kaduna rail began in February 2011 and ended in December 2014

 

The Facts

 

Are all the mentioned railway projects the same?

There appears to be some confusion on the various projects in question: The Abuja Light Rail, the Abuja-Kaduna rail line or the Lagos-Kano rail line.

The Abuja light rail is a project to construct a light rail system in the Federal Capital Territory. The rail network is expected to link Abuja with satellite towns such as Nyanya, Kubwa, Mararaba and Lugbe.

This is different from the Abuja-Kaduna coach that President Buhari commissioned in 2016. President Buhari’s January 2018 train ride which sparked this controversy was also on the Abuja-Kaduna and not the Abuja Light rail. It was this same Abuja-Kaduna that Governor El-Rufai referred to as Lagos-Kano rail; Abuja-Kaduna is a segment of the Lagos-Kano rail project.

 

History of the Lagos-Kano Rail

The Initiation – Obasanjo administration (May 1999 – May 2007)

On March 15, 2004, a report in a government publication hinted of a railway development plan: “A 25-year Strategic Development Plan for the railways in Nigeria has been approved by the Federal Executive Council and an Inter-Ministerial Committee has been inaugurated for its implementation”. PDF here.

In July 2006, it was reported that the Federal Executive Council had approved a technical design for the reconstruction and revival of the Nigerian rail system beginning from Lagos ports to Kano. It was a Design, Build and Maintain contract on the Lagos-Kano project”. Another report In August 2006; PDF here, here and here.

 

On August 9, 2006, the then President Obasanjo announced in a nationwide broadcast, a “bold new strategic plan for the modernization and expansion of the Nigerian Railway system to be implemented within a 25-year time frame”. Obasanjo outlined Federal Government’s commitment to implementing a railway expansion plan to link up all state capitals and major commercial centers in the country. The first Phase of the project, according to Obasanjo, was “the Lagos-Kano Standard gauge, double track railway line spanning over 1315 kilometers with a loop from Minna to Abuja and only Abuja to Kaduna being single track due to inadequate anticipated traffic”. This phase of the project was scheduled to be completed in four years at a cost of $8.3 billion. He also said “$2 billion is being obtained as soft loan from the Chinese Government” for the Lagos-Kano phase. The scope of work was to cover the following sections:

  • Lagos-Ibadan
  • Ibadan-Ilorin
  • Ilorin-Minna
  • Minna-Kaduna-Kano
  • Minna-Abuja-kaduna

In this news report, Obasanjo further outlined the design criteria or technical features of the planned railway systems. In his speech announcing the railway plan, Obasanjo said: “To start with, the Federal Government is committing the sum of US$2.5 billion dollars – one billion dollars from the Chinese Government concessionary loan and with one and a half billion dollars Federal Government counterpart additions between 2006 and 2007. It is my hope that subsequent Administrations will buy into this vision and that other friendly countries will offer similar concessionary loan assistance to continue the project in the years ahead with the possibility of a West African regional railway system”. PDF of Obasanjo’s budget speech is available here. This was also reported by Vanguard Newspaper.

On 30 October, 2006, the Lagos-Kano railway modernization project was awarded by the Obasanjo administration to China Civil Engineering Construction Corporation (CCECC), at a total contract value of US$8.3 billion. President Obasanjo flagged off the construction of the Lagos-Kano railway line on 28 November 2006 at Kajola in Ogun State.

News reports in November/December 2006 said that the Obasanjo government was sourcing about $1.4 billion as initial financing for the West-North rail project, while the East-North rail project would be done based on a “resource swap” under which the South-Koreans would provide the long and short-term “low interest” loans to help cover part of the estimated $10 billion plan, in exchange for oil blocs.

In February 2007, it was reported that the government signed a $2.5 billion loan facility with China, in October 2006, “a substantial part of which will be used to finance the refurbishment of the railway system” and that Infrastructica – “a consortium of international and domestic private investors and banks have already come together to offer 1.4 billion dollars over 10 years for the development of rail infrastructure and services”, according to Transport Minister Habib Aliu. Another one said “China is investing four billion dollars in oil and infrastructure projects in Nigeria in return for the four drilling licenses”

PDF here, here, and here.

 

However, this China Exim Bank’s document dated November 2006 did not list Nigeria’s railway loan.

In his 2007 budget speech, Obasanjo said that all tiers of government had committed to jointly execute and fund six major developmental projects with large foreign exchange components (including the $8.3billion railway project) from the excess crude account. He promised to seek parliamentary authorisation for the Federal Government’s share of these major expenditures and that “other tiers of government will also seek authorisation for their portion of the spending from their respective legislative arms”. However, no parliamentary approval was obtained for the projects, either from the National Assembly or the state assemblies and the payments were not appropriated.

 

In March 2007, without recourse to due process, Obasanjo paid $250million from the excess crude accounts to CCECC of the $1.13billion mandatory mobilisation fees. The fund paid to the CCECC was not provided for in the 2007 budget.

According to this August 2015 report , “The contract was signed in October 2006 and the Chinese contractor immediately started work with the ground-breaking perform by Obasanjo at Kajola in November, 2006. Obasanjo left in May 2007 but managed to cause a problem by not fully making the down payment of about $2bn to the contractor. The down payment was due 14 days after contract execution. Instead, he paid only $250m and asked that the balance be obtained from the China Exim Bank loan”.

Thus, the $2.5billion loan mentioned by Obasanjo was never consummated. No other money was paid to CCECC by the Obasanjo administration, apart from the $250m. Obasanjo never signed the documentation to activate the $2.5bn China-Exim Bank loan, instead “CNOOC was given RFR [Right of First Refusal] on four blocs as settlement for the anticipated $2.5 billion loan from Exim Bank for the Lagos–Kano railway and the Mambilla power station. The closeness of this round to a farreaching change of government, however, proved to be too much for CNPC and CNOOC, which declined to bid” (see Pg 3).

See further details on the opaque oil-for-infrastructure agreements on pages 14, 17-18, 23-25, and 28 of this Chatham House report, and in other sources here and here.

 

The Pause, Regularization, and Renegotiation – Yar’Adua Administration (May 2007 – May 2010)

When President Umaru Yar’Adua was sworn in, he was unhappy with a few contracts and agreements entered into by his predecessor, President Obasanjo. He alleged that due process was not followed, contracts were not approved by the National Assembly in contravention of the law and Yar’Adua revoked a number of them. He suspended the rail contract awarded by President Obasanjo. Read about it here, here, and here.

In 2008, unresolved disagreement between the presidency and the Federal Ministry of Transportation stalled the take-off of the $8.3 billion contracts awarded to CCECC. Allocation for the Railway Modernisation Project was conspicuously missing from the list of projects under the Ministry of Transportation or special project unit in the presidency in the 2008 budget proposal. “According to a Presidency source, President Yar’Adua has vowed to strictly observe the due process and rule of law, and hence does not want to have anything to with funding of contracts, which is not approved by the National Assembly, being it Special Project Unit under the presidency or not. ‘The truth of the matter is that Mr. President is interested in the immediate take off of the project. Mind you the man believes in the rule of law and I can’t see a Yar’Adua president going out of his way to fund the project from the source that is not recognised by the law’”. PDF here.

 

On October 26, 2009, the Federal Government signed a new agreement with CCECC for the first phase of the Nigerian Railway Modernisation Project, having re-scoped the project into five segments: Lagos-Ibadan; Ibadan-Ilorin; Ilorin-Minna; Abuja-Kaduna; and Minna-Kano, which would be undertaken separately, over the course of 25 years. The contract designated as Phase 1, Segment 1 of the re-scoped project would cover the Abuja (Idu)-Kaduna axis with a contract sum estimated at about $875 million.

The new contract was to be funded by the Nigerian government, with a concessionary loan of $500m by CCECC. The loan was also reported here but referred to as a Chinese government loan of US$500m.

The Minister of Transport, Mr. Ibrahim Isa-Bio, who signed the agreement on behalf of the federal government, noted that the project was reviewed downward from the initial $8.3 billion signed by the Obasanjo administration. He was quoted to have said: “The former agreement was lopsided. We had to analyse the previous project to make sure it serves the public better. We will work on each one on the unit cost: the bill of quantity, and the legal agreement that was previously signed, to make sure everything follows international regulation standards.”

“Then, the cost has been reviewed as some of the costs that were about $1.2 billion have been reviewed to about $875 million, saving the country about $300 million. Due to the high cost of the (initial) project and the absence of a funding plan, the present administration decided to review the plan. Also, a lot of issues were discovered which were inconsistent with the policies of this government and they had to be removed, which has led to a downward review of the contract fee,” he said. The transport minister said the $250 million paid to CCECC and $8.4 million paid the consultants (TEAM Nigeria Ltd.) by the Obasanjo administration would be part of the new contract.

 

Funding and Construction – Jonathan Administration (May 2010 to May 2015)

Financing for the Abuja-Kaduna project that was eventually executed by President Jonathan in December 2010. It was a concessionary loan of $500milion from the Chinese Government at 2.5% interest, repayable in 20 years. Reuters also wrote about the $500million loan here. PDF here and here.

Construction started February 2011 on the Abuja-Kaduna project and rail track works was fully completed by December 2014. Also read here and here.

However, a railway line does not only include the rail track, it also includes train coaches, train stations, signalling and communication equipment which the Minister of Transportation in the Buhari administration confirmed was completed by the Buhari administration.

Former President Goodluck Jonathan himself appears to have agreed that the project was NOT completed in December 2014. In this news report, former President Goodluck Jonathan was requesting that the incoming Buhari administration complete the rail project in his last few days in office in May 2015.

In September 2016, former President Jonathan referenced an article published in January 2016 by Tolu Ogunlesi that the Abuja Kaduna rail project was almost complete. President Jonathan did not dispute Ogunlesi’s assertion that the Abuja Kaduna project was almost complete in January 2016. This December 23, 2015 report quoted the Minister of Transport, Mr Rotimi Amaechi: “In 2016, we hope to complete work on the Abuja-Kaduna railway line as Mr. President is highly committed to it”.

 

The Abuja-Kaduna Rail service was finally commissioned by President Buhari on 26 July 2016.

 

History of the Abuja Light Rail

On May 15, 2007, Nigerian President Obasanjo attended the ground-breaking ceremony for the Light Rail Mass Transit Project constructed by CCECC. Another report said the foundation stone for a $84 million Abuja Light Rail Project was laid on May 7, 2007 by the then President, Chief Olusegun Obasanjo, but the project was practically abandoned for a while.

In 2007, Yar’Adua suspended nearly all the “oil-for-infrastructure” projects that Obasanjo signed with Beijing, including the Abuja light rail deal. The contracts saw Chinese energy firms get preferential bidding on Nigerian oil blocks in exchange for support on major infrastructure projects.

On August 18, 2010, The Federal Executive Council, under President Jonathan, approved $841 million contract for the reworked version of the contract for the design and construction of the Abuja Rail Mass Transit Project. The contract was for project management services in respect of the Lots 1-3 of the light rail transit project, christened The Abuja Rail Mass Transit project.

In this November 2011 NASS proceeding, Hon. Kigbu Joseph Haruna said “Aware that the Abuja Light Rail Project was launched in May 2007 at a ground breaking ceremony by President Olusegun Obansanjo and up-till now nothing much has been done despite the 2011 time frame for completion;

Concerned that the Rail Project which was touted to be an asset for the City in its bid to host the Commonwealth Games in 2014 may never see the light of the day just like the failed Lagos Metro Line Project;

Further concerned that over 213.8 Million Dollars was paid to the China Civil Engineering and Construction Company but no significant progress has been made;”

In 2012, Jonathan started to move the Abuja Light Rail Project forward: The deal signed by former president Olusegun Obasanjo with China included the promise of a $500-million loan, with $341 million in matching funds from Nigeria to build it by 2011.

In August 2012, a change in the cost and size of the Abuja Rail Mass Transit Project was announced, with the length decreased from 60.67km to 45.25km, which in turn decreased the overall cost to about US$824million.

In 2012, a loan of $600 was signed – $500 for Abuja Light Rail (and the rest for Galaxy Backbone) by the Finance Minister, Ngozi Okonjo Iweala.

In 2014, the Federal Government awarded contracts for Lots 4, 5, 6 of the Abuja Rail Mass Transit System: “For the Lots Four, Five and Six, that is why we are doing the feasibility study. We want to run away from the previous practice where contracts were awarded on the basis of conceptual design. This time around, we are coming with the engineering design and the bill of quantities before we go to tender”. More information here. More information on the China Exim bank loan of $500m for the Abuja Light rail here, another one here and here.

However, a recent Senate Committee inquiry revealed that President Olusegun Obasanjo awarded the $800m Abuja Rail contract in 2007 without the crafting of a design or Memorandum of Understanding (MOU). The contract was said to have been signed based on “uncalculated estimate by the then minister of FCT and present Kaduna State Governor, Mallam Nasir el-Rufai”.

The project manager for the construction firm, Etim Abak said, “The contract was awarded based on conceptual design and estimates were not properly done. There was no formal design submitted and rail bridges and crossover bridges were not captured in the contract”. PDF here and here.

In May 2015, this news report referenced a 61% completion. The ALR was inspected by President Jonathan here, and here.  

The project is still ongoing but expected to be completed soon.

 

Conclusion

 

Was the achievement regarding the Kaduna train that President Buhari took a ride in ENTIRELY the handiwork of the Jonathan government?

No. Especially with the emphasis on the word ENTIRELY.

The original contract referred to by Governor El Rufai was initiated by the Obasanjo administration but cancelled and renegotiated by the Yar-Adua administration. The Jonathan administration raised financing and funded the project, but even he did not dispute the fact that the Project was not 100% complete when he left government. Therefore, the claim by Senator Ben Murray Bruce, that the “achievement was ENTIRELY the handiwork of the Jonathan government”, is false.

 

Did the Obasanjo Administration design the Lagos-Kano dual track standard gauge rail, and the Abuja Light Rail system?

We were only able to establish the existence of a conceptual design (a broad outline of form and functions) for the two projects during the Obasanjo administration. This does not represent a full engineering design for the railway projects.

Further, the Kaduna-Abuja project was a new addition under Yar’Adua – Jonathan as the Minna-Kaduna-Kano and Minna-Abuja-kaduna segments of the project initiated by the Obasanjo administration were re-scoped as Minna-Kano and Abuja-Kaduna respectively. Therefore, the claim by Governor El-Rufai that the Obasanjo administration designed the Lagos-Kano dual track standard gauge rail, and the Abuja Light Rail, is false. The Obasanjo administration only initiated both projects.

 

Did the Obasanjo administration raise the financing for the Lagos-Kano dual track-standard gauge rail system, and the Abuja Light Rail?

The $2.5billion loan agreement mentioned several times during the Obasanjo administration was never executed. The Obasanjo administration neither paid the full mobilization fee ($250m was paid out of $1.13bn), nor provided the counterpart funding required to start the project. Financing for the Lagos-Kano and Abuja light rail projects were raised by the Goodluck Jonathan administration.

Therefore, the claim by Governor El-Rufai that the Obasanjo administration raised the financing for the Lagos-Kano dual track-standard gauge rail system, and the Abuja Light Rail, is false.

 

Did the Obasanjo administration start the EPC (Engineering, Procurement & Construction) for the Lagos-Kano dual track-standard gauge rail system, and the Abuja Light Rail?

No detailed engineering design had been done at the end of Obasanjo’s tenure; procurement could not have started as the Obasanjo administration did not make budgetary provisions for the railway projects; the ground-breaking ceremony performed by Obasanjo was a symbolic beginning of construction. Therefore, the claim that the Obasanjo administration started the EPC on both projects is false.

 

Did the Yar’Adua – Jonathan administration stall both projects for two years?

The Yar-Adua administration could not continue the contract as negotiated by Obasanjo for various reasons: No financing (no loan contracts) or funding arrangements (no budgetary provisions) for the projects; and Obasanjo did not make the full 13% mobilization payment. The delay in starting the railway projects under Yar-Adua could not have been termed stalling as the Yar-Adua administration met no ongoing project to continue. Therefore, the claim by Governor El-Rufai that the project was stalled is false.

 

Did the construction of the Abuja-Kaduna rail begin in February 2011, and did it end in December 2014?

The February 2011 start date is correct as stated.

The December 2014 end date is correct, if the Senator was referring to the track works only.

If he was referring to the railway project as a whole, the claim is false, as work continued after the December 2014 date. The Abuja-Kaduna Rail service was commissioned by President Buhari on 26 July 2016.


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