The Nigerian Senate has resolved to probe the country’s Ministry of Transport headed by Rotimi Amaechi over the procedure leading to concession of Port Harcourt-Maiduguri and Lagos-Kano rail lines to General Electric, GE, a U.S. conglomerate.
Mr. Amaechi had in an interview with CNBC in June announced Nigeria’s engagement with GE regarding the concession of Western and Eastern rail lines – Lagos to Kano and Port Harcourt to Maiduguri respectively – worth around $2 billion.
“GE is already in; we are trying to get the government agencies to allow us negotiate with GE,” Mr. Amaechi said. “The company is going to bring in over $2 billion in the Nigerian railway sector in which they are going to revive the Lagos-Kano narrow gauge and revive the Port Harcourt-Maiduguri narrow gauge by private investment.”
Due to lack of funds, concessioning appears the method of choice of the Muhammadu Buhari administration for major projects. Apart from the rail lines, the government has also announced its decision to concession Nigeria’s four major international airports.
But in a motion at the Senate on Tuesday, Akpan Bassey (PDP-Cross River) said Mr. Amaechi violated the Public Enterprises (Privatization and Commercialization) Act, 1999 by “unilaterally engaging General Electric for the concessioning of the Western and Eastern Rail Lines.”
Mr. Bassey, the Chairman of the Senate Committee on Gas, said upon approval of the of the project by the National Privatization Council in April 2015, twilight of former President Goodluck Jonathan’s tenure, the Bureau of Public Enterprises and the Nigeria Infrastructure Advisory Facility had developed a roadmap.
He said the BPE had engaged the Global Infrastructure Facility and the World Bank in discussions on how to access funds to manage the project before Mr. Amaechi’s “unilateral” deal with GE.
Following the motion, the Senate resolved to refer the matter to its committees on privatization, finance, land transport, anti-corruption and financial crimes, trade and investment for further actions.
The GE engagement, however, has the backing of President Buhari who announced it in his Independence Day speech.
“General Electric is investing two point two billion USD in a concession to revamp, provide rolling stock, and manage the existing lines, including the Port Harcourt-Maiduguri Line. The Lagos-Calabar railway will also be on stream soon,” the president said.
During the 2016 budget process, Mr. Amaechi had a fractious relationship with the National Assembly over the Lagos-Calabar coastal rail project which the legislature did not include initially, after passing the budget.
The project was not in the original appropriation bill presented to the lawmakers by Mr. Buhari, but was forwarded through the committee on land transport as a supplementary proposal of the transport ministry.
Mr. Amaechi was also recently under the spotlight, after he was accused by two Supreme Court judges of trying to manipulate judgements in favour of Nigeria’s ruling All Progressives Congress. He has denied the allegations while the judges, as well as seven others have been suspended pending conclusion of corruption charges against them.