The Nigerian Minister of Transportation, Mr. Rotimi Amaechi, has made some clarifications on the withdrawal of General Electric from railway concession in the country, insisting that the FG has not signed any agreement with the American company.
According to the minister, GE was still negotiating with the Federal Government on the planned $2.7 billion deal to concession and rehabilitate Nigeria’s narrow gauge railway when it backed out.
The minister stated this speaking on the the ‘Morning Show’ of Arise News Network, insisting that GE did not abandon the railway deal on account of Nigerian economy.
He said further that GE was no longer in the business of transportation and had to hand over its interest in the deal to another firm.
“General Electric did not pull out. One thing that thrives heavily in Nigeria is rumour, I don’t know where you got that information, no concession agreement has been signed, none. We have been negotiating, there is no way you will get a concession agreement in one year.
“What happened is that most of their business activities, they have dropped a lot of (them), I don’t know if it includes energy, transportation and all that. When they found out that they couldn’t continue in that line of business…because they were no longer in transportation business, the next company took over the lease, they didn’t pull out, it has nothing to do with our economy, they were excited about this thing.”
Amaechi futher revealed that GE had told him that they had for 11 years approached successive administrations in Nigeria to do the railway concession but the company was not successful because previous administrations wanted to award contracts for the railway while that of Muhammadu Buhari, preferred the concession model, adding that South African firm, Transnet SOC Limited, which deals in pipeline, port, and rail construction would now take over from GE and that a Special Purpose Vehicle (SPV) would be set up with Transnet and other firms to do the job.
“I said I wasn’t going to award any contract because railway is too expensive. The total investment is supposed to be $2.7 billion, which is N1 trillion. No government can pull out N1 trillion to rehabilitate the entire narrow gauge.
“Now, the South African company has continued, they want to do the rehabilitation, we are at the point of setting up the SPV before we can sign the concession agreement.
“Have we finished negotiations? The answer is yes; the problem we have is that they want another six months to get their ministers in South Africa to give them approval to set up an SPV and we can’t sign without that because there are four companies involved.
“The four companies will form an SPV with which they will come to the table to sign. Each company, especially the one in China, say they will need six months to be able to convince their government to go into the concession. We are good to go, we are waiting for our partners,” he added.