How Nigeria was fleeced in $1.76b Lagos-Kano rail line rehabilitation contract

Hoping to ensure that the 1,124 kilometre Lagos-Kano narrow gauge rail line will guarantee daily transportation of goods and commuters along the Lagos-Kano rail route, the Federal Government under the Goodluck Jonathan administration awarded a rehabilitation contract of the said rail line at the cost of $1.76 billion.

The Ministry of Transportation then under Idris Umar had, according to agreement documents obtained by The Guardian, awarded the contract of the Lagos-Kano rail line also known as Main Western Line to Chinese Civil Engineering Construction Company (CCECC), which project was ostensibly completed and commissioned in 2012 for supposed daily operations.

However, investigations showed that though the project was carried out to enable government fast track daily transportation of heavy duty goods and passengers, the main goal for full rehabilitation of the commercially viable line was far from being realised as the Lagos-Kano rail line either maintained a little over twice daily shuttle services or far less despite claims that it would spur daily transportation of the commercially viable line.

Now, the same Lagos-Kano rail line is to receive new funding in the 2016 budget, only this time under the standard gauge modernisation project of the nation’s rail line works spanning 25 years vision period.

Although in the 2016 budget, the Ministry of Transportation appropriated N60 billion for government’s counterpart funding to complete reconfiguration of the Main Western Line to standard gauge, the National Assembly chose to jerk up budget envelope for the same project to N90 billion.

Investigations showed that all the benefits of full rehabilitation listed by the former administration for embarking on the rehabilitation of the Lagos-Kano narrow gauge line are the same benefits also put forward for embarking on standard gauge upgrade of the same route in the 2016 budget.

The former Ministry of Transportation under Umar had, through assurances from CCECC, stated that full rehabilitation of the Lagos-Kano line will guarantee daily movement of commuters and cargo by rail and increase the skeletal twice per week service operated before the rehabilitation.

An initial feasibility study for the project was produced by the Nigerian branch of the international engineering firm Julius Berger together with an Italian firm, TEAM Consultants, in 2001.

However, the CCECC said they also conducted a “detailed feasibility study” before they participated in a limited tender, and an environmental impact assessment after the contract was awarded.

The Federal Government in a signed agreement with the executing foreign companies had drawn up four possible designs with the help of Italian consulting firm TEAM, and Julius Berger to carry out the following four possible flexible designs for the railway, including rehabilitation of existing narrow gauge, single track at the cost of $1.76 billion; rehabilitation plus a second new narrow gauge, double track at the cost of $6.7 billion; building of new standard gauge, single track line at the cost of $5.81 billion; and finally new standard gauge, double track except Abuja-Kaduna, for $8.3 billion.

In April 2006, along with two other unnamed ‘pre-qualified companies,’ CCECC was invited to submit tender documents, which they did in June 2006 and were awarded rehabilitation contract of the Lagos-Kano rail line.

Apart from also assuring that the rehabilitation of the narrow gauge rail lines will boost daily movement of goods and passengers, the Chinese company and others through the then Federal Ministry of Transport stated that the rehabilitation will also enhance linkage of all terminals within Apapa port complex to marshaling yards and exchange gate to Ebute Metta and beyond.

The Guardian gathered that other benefits of the rehabilitation of Lagos-Kano rail line would include prompt evacuation of bulk goods from Apapa port; movement of petroleum products from Total, Mobil, Oando, A-Z, and Hensmor Tank farms to various locations in the country.

There was also the assumption for substantial reduction in road congestion associated with tankers carrying cement or petrol if the rehabilitation was done.

Nonetheless, investigations reveal that series of arguments over the superiority of standard gauge line over narrow gauge or broad gauge line have been rife in Europe and the United States many years ago.

While some proponents of narrow gauge argue that it is best for conveying heavy duty goods and cost saving, other reformists who wanted the new form of standard gauge or broad gauge also engaged government for concession, each arguing that the one is better than the other.

Investigations have shown that the narrow gauge rail tracks have in the past, served the country well for haulage and transportation of commuters, which is perhaps why parts of Europe have retained the narrow gauge line for different haulage rail services.

Head of Press in the Ministry of Transportation in Abuja, Yetunde Shonaiki when contacted, declined comments, saying the issue should be put into writing and submitted for verification.

When The Guardian called at the CCECC headquarters, top officials of the company who pleaded anonymity said the company violated no rules of engagement in the two instances.

One of the officials said the company was in order when it said that full rehabilitation of the Lagos-Kano narrow gauge line can foster daily operation, adding that in rehabilitation the rails are made to function as good as brand new.

Another official who equally pleaded anonymity said: “When you carry out full rehabilitation it’s just like fixing a bad portion of a road. But when you dualise, it gives room for more cars and you can move faster. This is what has happened. It’s also possible to liken the scenario before the Global System of Mobile Telecommunications (GSM) and the lines were few. But after digitisation of telephones, we now have more people who own phones. That is also how it is when you do standard gauge line. It is more stable and the trains can go faster on it.”

Another official explained that the CCECC was not the sole contractor to the job, arguing that the company merely carried out work on the rudimentary Jebba-Kano end of the 1,124km long rail track.

Documents obtained by The Guardian, however, showed that CCECC was a key contractor in the project, the same as captured newly in the 2016 budget.

Efforts to get Costain Ltd to comment on their level of involvement in the Lagos-Kano rail were not successful before press time, as they had been penciled down for participation in the rehabilitation project.

Also, repeated efforts to get the Director Rail Services in the Federal Ministry of Transportation, Mohammed Babakobi to comment on the issue failed.