Can Nigeria sanction China’s CCECC over alleged failure to fund its rail projects? ADEYINKA ADERIBIGBE writes on its implications.
The Minister of Transportation, Mu’azu Sambo, was miffed penultimate week. He couldn’t understand the seeming desertion of agreements to deliver more rail lines to Nigeria.
To demonstrate his disappointment, he gave the contractor – China Civil Engineering Construction Corporation (CCECC) – till October to either fund some of the rail networks for which it has entered into a contract with Nigeria, or be sanctioned by the Federal Government.
Blowing hot during his tour of some projects in Lagos, Sambo described as unacceptable the pace of work on the Kano-Kaduna standard gauge and the Port Harcourt.
For him, two years after signing an MoU with Nigeria, the contractor had done nothing and might never do anything, as CCECC neither provided the counterpart funding nor mobilised to site.
According to him, the agreement stipulated that CCECC is to provide 85 per cent of the project cost, while the Federal Government provides the balnce.
He said: “I have given them till October 2022 to fulfill their own part of the agreement or stiff sanction would be meted out to them.
“How could it be said that years after the agreement was signed, CCECC is yet to provide a dollar or move to the site?”
Experts observed that whatever is happening to the Kano-Kaduna rail construction and the Eastern line (known as the Port Harcourt-Maiduguri rail line) is reverberating across all corridors where there are hanging projects.
But they averred that the minister’s outburst was capable of embarrassing the government, as it had the potential of rupturing the amity between the two countries.
With 10 months to handing over next May, hardly would the Muhammadu Buhari government get another rail project delivered, despite contractual agreements some dating back to 2017, 2019 and early last year, or with currency swap that saw the Federal Government accepting the China’s currency as a means of exchange for international trade between the two countries, watchers said.
Sambo was not alone in his criticism of the China’s company. His immediate predecessor, Rotimi Amaechi, had in March accused CCECC of being unserious with the Kano-Kaduna rail project, urging the contractor to provide funding for the project and get it off the ground.
Amaechi had said: “The pace of work is extremely slow. The pieces of equipment are supposed to be 2,000 plus, but what they (CCECC) have brought so far is 541, they claim that 300 and some equipment are in Kaduna. Even if you added all together, you will have 841 equipment in place of the 2,000 equipment that they were supposed to bring. That means something is wrong somewhere.
“I know they (CCECC) claim that there is no money, that we have not funded them. CCECC has not brought money. The Chinese are no longer giving us money for more than three to four years.”
A top official of the Federal Ministry of Transportation, who preferred anonymity, said the rail projects might have become sucked in the “civil service officialdom”. Left with insufficient time, other projects might have to wait on Buhari’s successor, whose commitment is critical to the sustenance of the rail transformation, their nurturing and maturation.
For him, at the heart of the delay is the inability of the government to come up with counterpart funding for any of the project for which the new minister is annoyed.
Another source, a former staff member of the ministry, blamed Sambo’s outburst on the quality of advice available to him.
Noting that the new minister is new on the job, the former official said he should not dabble into issues without proper briefing.
Giving an insight, he said the Lagos-Kano standard gauge rail line was a project okayed since 2002 as to cement the bilateral relationship between the two nations.
He said the contract for the Lagos-Kano (also known as the Western Line of the Nigerian Railway Corporation), worth is $6.6 billion, came with some concessions from the Chinese government, who brought in CCECC and its subsidiary – the China Rail Construction Corporation (CRCC) – which have some presence in Nigeria – to execute the project.
According to the source, who would not want to be mentioned, any sanction meted to China, which might include relieving CCECC of the project, might be subjected to several interpretations that could hurt the relationship between the two nations.
He said: “Have officials of the Ministry of Transportation fully briefed the new minister? Have the Ministry of Finance fulfilled Nigeria’s obligation which was to provide 15 per cent counterpart funding and have been able to secure the right of way for the projects? If we haven’t fully discharged our side of the bargain, would it be right to blame a friend who is bringing his money to help build our infrastructure for not coming up with his own side of the bargain?”
Beyond asking what could amount to a rhetorical question, the source disclosed that the condition which was obtained in 2002, or even 2019 no longer obtains, and Nigeria, if indeed it needed global funding, must make itself ready and think out of the box to make it happen.
Analysts said Nigeria’s situation may not even be helped by the fact other nations including Ghana, and Cote d’Ivoire in West Africa, Kenya, Zambia and Ethiopia are already waking up and seeking assistance from China and other friendly nations to build similar infrastructure.