Obasanjo Awarded $841.6m Rail Project Without MoU – Contractor

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CHINESE Civil Engineering And Construction Company, CCECC, a construction firm handling the Abuja rail project, on Monday, February 15, told the Senate committee on the Federal Capital Territory, FCT, that former President Olusegun Obasanjo awarded the contract in 2007 without an engineering design or the drafting of a Memorandum of Understanding, MOU.

Etim Abak, the CCECC’s project manager, who briefed members of the committee while on oversight visit, said the contract was awarded based on conceptual design and that estimates were not properly done.

Abak further disclosed that the signing was predicated on uncalculated estimate by Nasir el-Rufai, the then minister of the FCT and current governor of Kaduna State.

The revelation was made on the heels of the Senate committee’s discovery that, while the 60.67 kilometres rails contract was inflated by $10m per kilometre, the length was later reduced to 45 kilometres without a refund of the cost for the 15.67 kilometres which was dropped.

Consequently, Dino Melaye, chairman, the Senate committee, demanded refund of $195,878,296.74, being the amount for the 15.67 kilometres cut out from the Chinese firm’s contract.

Melaye expressed disappointment that the project was mired in fraud. He said: “The Federal Government has so far invested $31.5bn and another $7.6bn from the SURE-P fund and if you put these together, we have altogether $39.1bn invested in the rail project, leaving the balance of $113. 233,155.32.

“I did research and looked at rail construction of the same specifics, of the same technology across the globe and one cannot but complain that this railway project in Nigeria is on a very high side.”

The committee chairman further queried the rationale behind the government’s loan of $500m from Exim Bank of China for the project calling it misplaced.

“From my comparison with other rail projects across the world, the federal government’s investment in this project is enough to execute the project without taking a loan as high as $500m from China. From our research and it’s very simple, the world is now a global village.

“As you are sitting here now, on your phone you can google details, even in India and Egypt. Fortunately, one of those projects in Zambia was also done by this same company, CCECC. We have six countries and the average cost per kilometre, none is above $4m per kilometre. Why is the Nigerian project costing approximately $14m per kilometre?” Melaye asked.

— Feb 16, 2016 @ 13:45 GMT

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