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Concerns Over Eastern Line Railway Contract - Politics - Nairaland

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Concerns Over Eastern Line Railway Contract by EcoBrick: 11:04am On Nov 16
The Eastern line is a very integral part of the Muhammadu Buhari-led administration’s rail development initiative. There are, however, concerns about aspects of the project, writes ROBERT EGBE

Minister of Transportation Rotimi Amaechi is passionate about connecting the country through railway. His principal, President Muhammadu Buhari, has also caught the bug and has approved almost everything the minister requires to bring the project to fruition. A regular clean bill from the Bureau of Public Procurement (BPP) has seen the project moving on, but there are concerns that there are irregularities in the handling of the contract for the rehabilitation and reconstruction of the Eastern Railway Line.

What exactly are the issues?

The project development coordinator of the Insight Dynamics Resource Ltd, Musa Ibrahim Kuchi, alleged serious breaches in the contract for the rehabilitation and reconstruction of the Eastern Line Railway project.

“The minister acted in breach of the law in seeking a no-objection certificate to award the contract for the rehabilitation and reconstruction of the Eastern line and that the BPP acted ultra vires in issuing such a certificate. Sections 16 & 40 of the Public Procurement Act 2007 stipulate five years imprisonment without an option of fine for such an infringement. The Federal Executive Council was misled into approving the contract by reliance on a defective certificate issued by the BPP. The Federal Executive Council recently approved the award of a contract to the Chinese contractor, CCECC, for the rehabilitation and reconstruction of the Eastern line for $3.1bn. The papers forwarded to the BPP by the Ministry are irregular in many respects and calls to question the motivation of the minister. Furthermore, the minister wants to take a loan for the project from the Industrial and Commercial Bank of China Ltd ( a private financial institution) to be backstopped by a sovereign guarantee at an interest rate of more than 3% whereas the US Eximbank offers a cheaper interest rate of 1.8% which the ministry spurned,” Kuchi said.

Taking loan from a private bank

Kuchi said it was wrong to ignore government-to-government loan arrangements with lower interest rates such as offered by the United States Eximbank.

“Usually loans such as the Chinese ICBC one are backstopped with a Federal Government sovereign guarantee and one danger of it is, that the sovereign guarantee may be discounted at 75-80% of its face value thereby allowing the contractor to receive money upfront while leaving Nigeria exposed. Is this why the minister has been misleading the government and the public by claiming that there is no alternative to China for funding of the railway projects even after US Eximbank has written over 80 emails to support railway development in Nigeria? Note only Lagos – Ibadan Rail project is being financed by Chinese Eximbank, all other projects are Chinese private commercial bank, and that is wrong especially where Nigeria sovereignty guarantee is involved,” he added.

Kuchi felt the BPP might have succumbed to political pressure and said it appeared that only the CCECC price assessment was used in violation of Section 16 and 40 of the Public Procurement Act.

“The minister foreclosed any opportunity for other companies to bid openly and competitively, therefore there is no transparency in the process. The tender was not advertised. The documents submitted to BPP by the Ministry reveals that the process of deal preparation appears deeply flawed with the contractor/concessionaire appearing to play the role of technical advisor as well which portends a conflict of interest. The contractor should not prepare the feasibility study that forms the basis of the Outline Business Case (OBC). Such items of work should be undertaken by an independent consultant acting as transaction advisor who should also be procured through an open tender. Before an OBC, there should be a scoping study incorporating a condition survey and also include a Bill of Quantities for the tendering contractors to price. Such an independent consultant would also produce an estimate of the scope of work that would form the benchmark for assessing bids. There is no justification or basis for assessing the contractor’s price in the manner used whereas it is a fundamental principle of the Public Procurement Act, that open and competitive tenders provide the best price assessment and value for money. You can’t be a referee and a player in the same game,” Kuchi explained.

He added: “The rehabilitation contracts were awarded on the Eastern line in 2011 for about $500m and by 2018, with about 70% of the contract sums expended/committed, the contracts appear to have been effectively abandoned by the government for no discernible reason. Railway services from the South East that commenced at the end of 2014 to the North had effectively stopped because the contracts were not completed and tracks vandalised.

The question the ministry has to answer is why is it now coming forward to award the same scope of work for over three times the price of the original contracts ($1.84bn) comparatively and when an aggregate of 70% of the original scope of work may have been completed just a few years earlier. They need to explain why the same scope of work is proposed to be awarded to CCECC at $1.8bn or (N650bn) instead of the balance of about N15bn required to complete the existing contracts. The same CCECC that rehabilitated the narrow gauge railway from Lagos to Jebba with N12bn ($80m) or $200,000 per km is now proposing to rehabilitate Port Harcourt –Maiduguri with $1.4m per km. That is a 700% cost inflation!”

Nigeria, he said, is building a standard gauge track between Lagos to Ibadan, Ibadan to Kano, Warri to Abuja and Lagos to Calabar and queried the sense in investing in building a new narrow gauge system that cannot interface seamlessly with the standard gauge system.

“Recently the request from the FMOT to Bureau for Public Procurement (BPP) claimed that this project is “among the railway modernization projects captured in the year 2020 appropriation of the Ministry in the sum of N67bn”. This is not true. All the modernisation projects are standard gauge and there is no narrow gauge railway modernisation project. It is indeed a misnomer for a modernisation project to be a rehabilitation of an old system.

“No US Company or AECOM did not pull out but were frustrated by the Minister of Transport and FMOT officials. Perhaps you will remember about a couple of months ago, the Minister of Transportation, Rotimi Amaechi, challenged the National Assembly to tell him where huge infrastructure loans could be accessed beside China. I met him far back in 2018 with details correspondences from US Eximbank and US Embassy commercial department where they indicated interest to support the ministry about their willingness to discuss Nigeria infrastructure projects for the past three years. But the Ministry of Transportation deliberately deployed every strategy to frustrate us and the American company AECOM even though they admitted in one of their letters to us that they have correspondence from US Eximbank. US Eximbank further expressed perplexity as to why the Nigerian government cannot engage with the US government at a bi-bilateral level for discussions regarding potential support, regardless of whether or not a U.S. exporter has provided affirmative interest.

“I have all documents to shows FMOT did not take US Eximbank opportunity and they don’t want Americans involved in rail projects in Nigeria even though they offer superior work quality, transparency and lower interest rate of less than 2% as against 3.2% Chinese offered us simply because Americans want government-to-government bilateral arrangement,” Kuchi further said.

He said his company met with Minister of Finance on the need to go along with the American deal.

“Yes we met her and she was very surprised, to say the least, and immediately directed her Permanent Secretary to write to FMOT requesting for their funding requirements to enable her to engage foreign affairs ministry on government-to-government bilateral negotiation, but to the best of my knowledge nothing comes out of that, ” he explained.

For a nation that intends to diversify its economy, Kuchi said, contemplating narrow gauge rail alignment is the last thing the ministry should undertake in the 21st Century.

“The narrow-gauge railway does have numerous disadvantages: When transporting goods, the cargo needs to be reloaded at transhipment stations for onward transportation by regular-gauge trains, signals and aerial lines are largely done away with, and elaborate automatic switches and block modes are rarely used. The narrow-gauge railways are also less smooth than normal railways, meaning jolts and vibrations are felt more intensely,” he said.

Legal tussle

Kuchi wants the court to direct the ministry to comply with the law and stop backdoor procurement.

“We are not asking the court should jail the minister, Rotimi Ameachi, and DG of BPP but we are bringing it to the court’s attention that the minister acted in breach of the law in seeking a no-objection certificate to award a contract for the rehabilitation and reconstruction of the Eastern line and that the BPP acted ultra vires by issuing such a certificate.

“We want to bring transparency to public procurement especially railway projects where billions of US Dollars are being spent. We are not seeking any kind of compensation but to ensure there’s transparency which will attract more foreign investment into the sector,” he said.

https://thenationonlineng.net/concerns-over-eastern-line-railway-contract/amp/?__twitter_impression=true

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Re: Concerns Over Eastern Line Railway Contract by EdoFirstBorn: 11:06am On Nov 16
Noise

3 Likes

Re: Concerns Over Eastern Line Railway Contract by ajailer(m): 11:50am On Nov 16
see the level of rot in this GMB govt no be here o. I have always known the Amaechi guy is taking a kick back for all these chinese loans and I can see the hands of Tinubu in this, he is fighting back and very soon all what we will be hearing will be tales of politicians opening their secrets to the public to know.... I hope this yansh opening will continue so that Las Las come 2023, na we d masses go win.

23 Likes 1 Share

Re: Concerns Over Eastern Line Railway Contract by baralatie(m): 12:01pm On Nov 16
did I just read the word backdoor procurement

2 Likes

Re: Concerns Over Eastern Line Railway Contract by IamFINESSE: 1:35pm On Nov 16
cheesy
Re: Concerns Over Eastern Line Railway Contract by obasi101(m): 1:35pm On Nov 16
I ll d suggest that the 3 ppl whom faces appeared in d above news should be sentenced to death by firing squad..... I riseeeee!!!!!!! grin

7 Likes

Re: Concerns Over Eastern Line Railway Contract by Sonnobax15(m): 1:35pm On Nov 16
h
Re: Concerns Over Eastern Line Railway Contract by ATEAMS: 1:35pm On Nov 16
Whatever is my right as a man is also the right of another; and it becomes their duty to guarantee as well as to possess.

1 Like 1 Share

Re: Concerns Over Eastern Line Railway Contract by pickatyou2: 1:36pm On Nov 16
Q
Re: Concerns Over Eastern Line Railway Contract by ImpregnaTor(m): 1:36pm On Nov 16
Anything concerning Nigeria just dey vex me

simple stuff that some countries will just do without publicity and silly noise, will take Nigeria years of stupid noise, planning and media prapaganda before the project will start and get abandoned for the next president and the circle continues

11 Likes

Re: Concerns Over Eastern Line Railway Contract by Mcuzy(m): 1:37pm On Nov 16
People dey loot us dem dey shoot us.
Untop the kain suffer dem put us.
Problem nor dey finish
Re: Concerns Over Eastern Line Railway Contract by Thiwalade: 1:37pm On Nov 16
angry
Re: Concerns Over Eastern Line Railway Contract by Soarr(m): 1:38pm On Nov 16
For 5yrs now, they should tell us one single rail projects they've started and completed.
I don't mean the ones gej started and they completed o

11 Likes

Re: Concerns Over Eastern Line Railway Contract by winterfell007(m): 1:38pm On Nov 16
After Amaechi will open his mouth and shout 'I'm Igbo' Igbo fire you there!! Look at how you've completely damaged the eastern rail lines. I still remember them being somewhat functional during GEJ's administration with concrete plans to modernize them

6 Likes 1 Share

Re: Concerns Over Eastern Line Railway Contract by Ogonimilitant(m): 1:39pm On Nov 16
Another 2nd Niger bridge project.
all planned to make sure it does work

1 Like

Re: Concerns Over Eastern Line Railway Contract by MadamExcellency: 1:46pm On Nov 16
Railway services from the South East that commenced at the end of 2014 to the North had effectively stopped because the contracts were not completed and tracks vandalised.

It was abandoned on purpose. The new government and the bureaucrats needed their share and glory.

On a second note. Are these shortcuts not inherent in the system? Why the complaint on the Eastern Rail lines when same corruption and shortcuts didn't stop Abuja and Northern States connections.

7 Likes

Re: Concerns Over Eastern Line Railway Contract by Franktom247(m): 1:51pm On Nov 16
Manual government china that gives you the railway loans use electric trains but na locomotive them come build for una both ALLAH & JESUS CHRIST go combine judge this government for all the deceit and evil you people are commiting to the citizens

2 Likes

Re: Concerns Over Eastern Line Railway Contract by AK481(m): 1:55pm On Nov 16
idiot people.

time for south east you people are bringing up nonsense.let them build it like that.

3 Likes

Re: Concerns Over Eastern Line Railway Contract by Nbotee(m): 1:57pm On Nov 16

The question the ministry has to answer is why is it now coming forward to award the same scope of work for over three times the price of the original contracts ($1.84bn) comparatively and when an aggregate of 70% of the original scope of work may have been completed just a few years earlier. They need to explain why the same scope of work is proposed to be awarded to CCECC at $1.8bn or (N650bn) instead of the balance of about N15bn required to complete the existing contracts. The same CCECC that rehabilitated the narrow gauge railway from Lagos to Jebba with N12bn ($80m) or $200,000 per km is now proposing to rehabilitate Port Harcourt –Maiduguri with $1.4m per km. That is a 700% cost inflation!”


Dis ppl want to finish dis country... Why collect a loan at an interest rate of 3% when U had the options of taking same at 1.8%? Where is dat ediot who was arguing like a slowpoke on an earlier thread. No wonder dey vehemently kicked against any review of all the Chinese loans wen d issue came up in the senate and the useless rubber stamped leadership have since done their bidding

3 Likes 1 Share

Re: Concerns Over Eastern Line Railway Contract by techwahala: 2:02pm On Nov 16
I'm not surprised sha because I knew that when it gets to turn of Easterners, there must always be a story to tell




Na still one Nigeria we d o undecided

3 Likes

Re: Concerns Over Eastern Line Railway Contract by Nairalandian(m): 2:02pm On Nov 16
I didn't even read the nonsense above....
Rubbish corn tree
Ordinary railway oooo
If them finally manage build am finish, all the politicians in Nigeria will come to the day they inaugurate it

2 Likes

Re: Concerns Over Eastern Line Railway Contract by Omezif(m): 2:03pm On Nov 16
Good development. It's trully big project that deserves serious attention. If government would do it as fast as possible it would assist a lot.
Re: Concerns Over Eastern Line Railway Contract by tolumizzy(m): 2:06pm On Nov 16
Waka
Re: Concerns Over Eastern Line Railway Contract by obimag(m): 2:08pm On Nov 16
Kano - Niger Rail Lines , No issues
Lagos to Abuja . Kano Rail Lines , No issues
Gas Pipeline from OBOB to Abuja - Kano Rail Lines , No issues
Transport University Daura , No issues

Eastern Rail Lines , K LEG

7 Likes

Re: Concerns Over Eastern Line Railway Contract by ZhiosonWind: 2:09pm On Nov 16
Chinese contracts are Greek gift
Re: Concerns Over Eastern Line Railway Contract by IgbofromDelta: 2:09pm On Nov 16
The same corrupt practices are at play at the Lagos to Ibadan, Ibadan to Abuja and Kaduna to Kano to Daura to Niger Republic rail projects.

All these rail projects should be stopped and reviewed together accordingly.

1 Like

Re: Concerns Over Eastern Line Railway Contract by tartar9(m): 2:09pm On Nov 16
Soarr:
For 5yrs now, they should tell us one single rail projects they've started and completed.
I don't mean the ones gej started and they completed o
So they're supposed to start new railways when there are uncompleted ones undecided

1 Like

Re: Concerns Over Eastern Line Railway Contract by Soarr(m): 2:11pm On Nov 16
tartar9:

So they're supposed to start new railways when there are uncompleted ones undecided
the money being wasted and siphoned, are they for new projects or old

3 Likes

Re: Concerns Over Eastern Line Railway Contract by slowice(m): 2:12pm On Nov 16
I didn't border to read it abeg.... I Don tire for this country

1 Like

Re: Concerns Over Eastern Line Railway Contract by Letmehearword: 2:17pm On Nov 16
Amechi surely have been short changing Nigerians with all this his Chinese infrastructural loans and award of contracts, but wait I, why did they have to use the Eastern rail line as the case in point, when he's been busy commissioning rail lines in the North using the same fund process, the answer might not be too far fetched 2023 political scheming, the recent spotting of Presidential posters in Kaduna, time will reveal the rest, Amechi shouldn't enslave us without delivering the infrastructures oo, then carry his cross for eying the big seat.

1 Like

Re: Concerns Over Eastern Line Railway Contract by gratiaeo(m): 2:32pm On Nov 16
The only problem here is eastern rail if it's not there wouldn't be problem

1 Like

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