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FG concessions rail lines to GE, Multinational to invest over $2.2bn

By on May 26, 2017

The federal government Wednesday handed over the letter of award appointing General Electric (GE) as the concessionaire for two narrow gauge rail lines in the country, after the company’s emergence as the preferred bidder for concessions.

The concession will see the U.S. multinational invest in excess of $2.2 billion in the two major narrow gauge rail lines that traverse several sections of the country.

The ceremony, which took place in the Ministry of Transportation, Abuja, marked the formal concession of the rail lines to GE for investment and operation.

The letter of award was handed over to the President/CEO of GE Transportation, Jamie Miller by the permanent secretary in the ministry, Alhaji Sabiu Zakari, who represented the Minister of Transportation, Mr. Rotimi Amaechi.

According to Miller, “Today we are pleased to accept the letter of award as the preferred bidder for the narrow gauge rails in Nigeria.

“GE, with its partners, is committed to working on this project. GE and its partners will work with the federal government to work through a concession process to bring Nigeria’s railway operations to life.”

She added that with the concession arrangement, GE would bring both project management and deep knowledge of the industry and knowhow on how to work projects such as this in a successful way. “We will partner with both the government and the ministry to do so,” she said.

She stated: “One trunk of the line from Lagos to Kano will pass through several states like Ogun, Oyo, Kwara, Niger, Kaduna and Kano. Another trunk starts from Port Harcourt in River State through Abia, Enugu, Benue, Nasarawa, Plateau, Bauchi, Gombe and Maiduduri in Borno.

“In the first instance, perhaps before 2017 ends, GE will introduce 20 locomotives and about 200 coaches to move freight and passengers even as more investments follow.”

Responding, Zakari said the Federal Executive Council (FEC) recently approved the outline business case for the concession of the narrow gauge rail lines.

“The president, transport section of GE which is the preferred bidder for the concession came and collected the letter of award.

“Based on that, we had a few discussions on the interim solutions to be taken before the take off of the final concession agreement.”

He hinted that the ministry would enter into an interim arrangement with GE that will see it provide Nigeria with locomotives and wagons as well as handle the renovation of the narrow gauge lines, which will facilitate usage.

According to Zakari, “GE will bring many coaches that will help in freight and passenger movement and this will ginger the economy. Our total agreement is for about 100 wagons in the interim and 20 locomotives.

“GE will make investments in terms of renovations and reactivation of wagons, coaches and the rail tracks, together with the signaling system and railway stations. This will make the narrow gauge comfortable for usage across the county and GE will recoup their investment over time.”

He added that the concession arrangement would not result in a hike in rail transport fares to a level that would affect poor Nigerians.