Federal government has said the promise to construct the $1.96 billion narrow gauge Eastern Railway Corridor for the South East region before the end of President Muhammadu Buhari administration would not be feasible.
The minister of transportation, Mu’azu Jaji Sambo, disclosed this yesterday after the Federal Executive Council (FEC) meeting presided over by President Buhari at the Presidential Villa, Abuja.
Buhari had two years ago performed the groundbreaking of the $1.96 billion rail line project assuring that it would stimulate economic activities in 14 states it covers.
The then minister of transportation Rotimi Amaechi had said the Port Harcourt-Maiduguri line would be delivered before the end of the tenure of the present administration.
But Sambo said financing the project had become an issue because the government cannot access loans from China.
He said “Now, the eastern line is the line from Port Harcourt-Maiduguri, it has been segmented in such a way that the first part of the works covers from Port Harcourt to Enugu.”
“The truth of the matter is that if there was a promise to deliver this line before the end of this administration, this promise is no longer feasible because, when the contract was approved, it was approved on the premise that 85 percent will be funded through foreign loans, while 15 percent will be the counterpart funding for the national budget.
“Since that approval, we have not been able to obtain 85 percent foreign loans for this project. We have been funding it through the national budget on the basis of the 15 percent counterpart funding of the Federal Government; and therefore, funding has been a major challenge for this project.”
Sambo said the federal government has not been able to obtain the foreign counterpart funding embedded in the project, making it impossible to fund it as envisaged.
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