The line will pass through Barrow, with a branch to Lokoja, the Kogi state capital. The contract also includes the completion of the line from Warri Central Station to the new Warri Sea Port, which CRCCI will also construct, along with operation for 30 years.
The contract, signed by minister of transport, Mr Chibuike Rotimi Amaechi, and CRCCI in Abuja last month, is a public private partnership (PPP).
“The signing ceremony we are witnessing today is the first PPP railway agreement for Abuja, Barrow, Itakpe and Lokoja,” Amaechi said. “In the agreement, it is 15% Nigeria and 10% CRCCI and then we will borrow the remaining 75% from the Chinese EXIM bank through a special purpose vehicle (SPV).
“Part of the agreement is that CRCCI will provide us with a performance bond before we give a sovereign guarantee for them to be able to borrow the remaining 75%.”
Any additional costs arising from the contract will be borrowed with the government’s guarantee, which would also be backed by a performance bond from the company.
“There is a concession agreement that requires CRCCI to manage both the railway and the seaport and recover the 75% and pay the money,” Amaechi said.
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