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More money is expected to be injected into the Nigerian economy to ease liquidity with the approval of $1.275bn (about N408bn) loan for the project on behalf of the Chinese government.
Already, the federal had last week announced the complete release of its counterpart funding of N72bn for the same project, a development that will see to the timely delivery of the scheme.
Considering the terms and conditions of the loan, Nigeria is to bear 15 per cent of the cost of the project, China will shoulder 85 per cent for the first phase fast rail that will eventually terminate in Kano.
The contract was awarded to the China Civil Engineering Construction Corporation last year by the Federal Government and both parties had signed an agreement to that effect.
The new Lagos-Ibadan rail, spanning 156.65 kilometres, is a double line, which is the first phase of the new Lagos-Kano standard gauge line.
The contract for the 2,733km new Lagos-Kano rail was first awarded by the former President Olusegun Obasanjo administration in 2006 at a cost of $8.3bn to the CCECC, but could not be executed due to paucity of funds.
It was rewarded to the same contractor by the President Goodluck Jonathan administration in 2012 for execution in six phases, starting with the Lagos-Ibadan stretch.
The new rail line would be built on the corridor of the existing narrow gauge Lagos-Kano rail line to accommodate only modern locomotives and other rolling stock meant for standard gauge rail for faster movement.
Details given by the Managing Director of Nigerian Railway Corporation, Mr. Fidet Okheria show that work will resume immediately the China loan approval is signed by parties.
He noted that “The Exim bank of China has now approved the loan and the next stage is for the Minister of Finance to sign it to signal the beginning of the project”.
Business Hilights recalls that the Minister of Transportation, Mr. Rotimi Amaechi, had penultimate Monday said the Federal Government decided to release the N72bn as its counterpart funds in full to ensure that there would be no delay in the implementation of the project.
Amaechi added that “On the construction of Lagos-Ibadan railway line, the Minister of Finance has been kind enough to release the counterpart funding in full. I think in the history of Nigeria, this is the first time that we are releasing counterpart funds in full so that there will be no delay”
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