Business Hilights
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GE exited transportation business to concentrate on power, technology

…Transnet may review terms and conditions for Nigeria railway deal

Fresh details have emerged on why the leader of the consortium driving reforms in the nation’s railway sector, General Electric (GE) pulled out and handed over consortium leadership to South Africa’s Transnet Group.

The firm left the industry due to its management decision to exit transportation sector with the aim of concentrating on IT and power which analysts say, are the two key sectors powering knowledge economy now being largely embraced by many economies of the world including Nigeria.

Whereas the Federal Government has already began talks with Transnet for the continuation of ongoing reforms in the nation’s railway concession, feelers indicate that the South African company may wish for a review of terms and conditions agreed with the federal government when GE was leading the consortium.

Business Hilights recalls that the entire deal was priced at $2bn, but considering the sudden change in leadership, Transnet may demand an upward or downward review of the Memorandum of Understanding sealed with the federal government in 2017.

Weekend, the Minister of Transportation, Mr Rotimi Amaechi, said Nigeria has nothing to lose from the pulling out of GE and that talks with Transnet is in progress.

According to the Minister, “We are in talks with Transnet. When we conclude, we will sign the concession agreement and they will rehabilitate the entire 3,500 kilometres of railways.”

Though the Minister denied the fact that the pullout was not a setback for the project, it would be recalled that GE had won a contract last year to manage Nigeria’s narrow-gauge rail network in partnership with three other companies, namely SinoHydro of China, Transnet, and APM Terminals.

The deal with federal government through the Ministry of Transportation in April included proceeding with the interim phase of the narrow-gauge concession that is expected to grow freight haulage capacity in the country ten-fold to 500,000 metric tons annually.

The concession aims to cover about 3,500km (2,200 miles) of existing narrow-gauge lines from Lagos to Kano and from Port Harcourt to Maiduguri.