Govt defends
100% execution by foreign firms
The Federal
Government is breaching its own local content policy in the construction of
over $20 billion rail tracks across the country, as indigenous firms are being
excluded from the execution of the projects.
If the
extant policy, which provides that 40 per cent of such projects should be
executed by local contractors, is followed, Nigeria would retain about $8
billion in its coffers and address unemployment and other social challenges.
The $8
billion, equivalent of N2.416 trillion, is about one-third of Nigeria’s 2017
national budget, and can almost fund the entire Lagos-Kano standard gauge
railway projects estimated at $8.3 billion.
There are a
number of other rail projects, 98 per cent of which were awarded to Chinese
firms. They include: Kano State rail, $1.85 billion; Lagos Blue Line light
rail, $1.2 billion; Lagos monorail, $1billion; and Abuja light rail, $841.64
million expected to be completed in October. Ogun and Oyo states are also
working on some rail projects.
Assessing
the scope of work, experts have insisted that Nigerians have the capacity to
handle key aspects of the projects, especially laying of tracks, survey and
design. They also expressed the fear that Nigeria would end up becoming a
dumping ground for rail contractors engaged just to provide infrastructure
without adequate manpower to operate and maintain it.
In the $1.5
billion Lagos-Ibadan end of the Lagos-Kano railway project alone, Nigeria would
have saved about $0.6 billion, if part of the projects were handled locally,
the experts said.
According to Guardian , already,
anxiety is beginning to peak among Nigerians that the country may lose out on
the other benefits accruing from the award of the contracts, saying that the
money to be realised would have helped in salvaging the nation’s ailing
economy, reduced poverty level and boosted local capacity development.
Defending
the exclusion of indigenous firms, the Minister of Transportation, Rotimi
Amaechi, told The Guardian that since China is financing the projects through
the China Civil Engineering Construction Corporation (CCECC), the contractors
have 100 per cent execution right of most of the rail projects.
Although he
said government was in talks with the contractors to involve local firms,
stakeholders who spoke to The Guardian, argued that the exclusion of Nigerians
from the rail projects contravened the Nigerian Content Development Act 2010,
which primarily guides operations in the petroleum sector but is gradually
being introduced in other sectors.
So far, the
Chinese contractor has declined commenting on the issue. When The Guardian
visited CECC head office in Ebute Metta, Lagos on June 2, 2017, requesting
public interest information on some of the projects, an officer directed this
reporter to a project director known as Ronaldo who said he was not in the
capacity to speak to the press. The organisation’s spokesperson, who was
identified as Garvin, said: “For all our projects, we have our clients. We are
only a contractor, if you need any information you should talk to them, we cannot
give you any information because we are not the owner of the projects.”
Some experts
lamented that China is taking advantage of the ailing state of the Nigerian
economy to provide infrastructure loans, which do not come in cash but as
projects executed by Chinese consortium and personnel. The model, many argued,
deprives indigenes of the benefitting countries of the Chinese loans which are
expected to be repaid with interest.
Already,
work on the Federal Government-sponsored $1.5 billion Lagos-Ibadan end of the
Lagos-Kano railway project, and other rail projects by Kano, Lagos, Oyo and
Ogun states has been commissioned.
The
government said it would use 20 per cent of the $30 billion to be borrowed from
multilateral finance institutions to build railways.
While
commissioning work on the Lagos-Ibadan railway project, Acting President Yemi
Osinbajo had told journalists that the project alone would create up to half a
million jobs. However, experts are concerned that the projects, basically
financed and constructed by Chinese consortium are not being executed in
compliance with local content policy, which seeks transfer of technology and
building of indigenous skills to sustain projects.
“If
government overlooked a holistic approach to building a sustainable railway
industry, the huge sum invested in the sector could go down the drain,”
Managing Director, Planet Projects, Biodun Otunola warned.
According to
him, Nigeria has not accurately considered the social and economic benefits of
the projects, especially in the locations of the rail lines. Otunola said
failure to develop local capacity and involve Nigerian contractors may compound
the country’s infrastructure woes.
Already,
lawmakers, particularly from the South-East, have expressed worry that the
standard gauge lines of Lagos-Kano, Kano-Kaduna, Lagos-Ibadan, and Lagos-Calabar
excluded the region, alleging that the project executors had deviated from the
original plan. According to them, the original plan links the South-East to
other zones in the South-South, South-East, North-Central and North-East as
well as some key cities such as Port Harcourt, Aba, Enugu, Makurdi, Lafia,
Gudi, Jos, Bauchi and Maiduguri.
The Oba of
Lagos, Rilwan Akiolu cautioned that except locals are involved in the execution
of the projects, Chinese may remain the major beneficiaries.
The
Chairman, Apapa Branch of the Nigerian Society of Engineers (NSE), Dr. Ombugadu
Garba, said the Nigerian government is known for signing pacts without adequate
consideration, and rarely implements the plans correctly.
Citing the
many challenges confronting the power sector years after privatisation, Garba
said: “Government rushes into agreements without proper consideration.
Investment in excess of $20 billion is a huge sum of money that we must not
joke with.
“We need
transfer of core technology, otherwise we will keep going to the Chinese each
time we have problems with the rail system. Nigerian engineers must be fully
involved. We must have the knowledge of the technology at every bit of the
contract. There must also be components for training and retraining of people.”
Also, a
London-based Nigerian railway expert, who manages Jeerea Nigeria Limited, James
Akpoviroro, expressed worry that government’s poor handling of the projects may
leave Nigerians disappointed.
Akpoviroro,
who admitted that China is crucial to the revival of the rail sector in
Nigeria, however, said that the exclusion of locals from the execution of the
projects and failure to build their capacity as well as initiate a robust
maintenance plan may thwart expectations of taxpayers.
“There is no
solid government’s say on the railway. There appears to be no indigenous expert
advising government on what path to take, all they are doing now is to just see
that the railway is running. We must realise that China is only loaning the
money to us, we will pay back. It is very important for government to seek the
involvement of locals at this point. Foreigners would leave someday, and if
that happens, the system may collapse,” he said.
The Director
of Rail, Ministry of Transportation, Mohammed Babakobi, who could not identify
any local contractor involved in the projects, said government had planned for
local manpower capacity development.
According to
him, government has a plan to grow the local content to about 40 per cent, and
is considering a transportation university that would give attention to the
rail sector.
Babakobi
disclosed that maintenance plan, building of local capacity and technical
support for up to a period of five years were detailed in the contracts signed
with the foreign contractors. He added that plans were underway for local
assemblage of railway materials.
0 Comments