The federal government on Thursday, October 10, signed a deal of $3.9 billion with China Railway Construction Corporation (CRCC) for the construction of the Abuja-Itakpe railway.
The Chinese firm, according to Rotimi Amaechi, the minister of transportation, will also handle the construction of a seaport in Warri, Delta state, Daily Trust reports.
Speaking in Abuja during the signing ceremony, Amaechi said that the Public-Private Partnership (PPP) agreement states that Nigeria will take care of 15% of the cost, while China Railway Construction Corporation will handle 10% of it.
The minister also stated that the remaining 75% will be borrowed by the Special Purpose Vehicle (SPV) which the federal government will pay back in a period of 30 years after which it will take back ownership of the assets.
He said: “We will give them a sovereign guarantee and they will give us a performance bond that protects our sovereign guarantee
When they finish construction, they will manage for 30 years. “The entire railway for now in Nigeria is constructed 100 by CRCC. I think that the good working relationship we have had with CRCC is the reason we have not been able to engage other companies.”