There are indications that the Federal Government may not meet up with the timeline for the completion of the $1.5 billion Lagos-Ibadan standard gauge rail project, as it has exceeded its budget for the project, BusinessDay investigation has revealed.
BusinessDay understands that the project, which has delivery deadline of December 2019, is being executed by the Nigerian Railway Corporation (NRC) and its technical partner, China Civil Engineering Construction Company (CCECC).
Also, the Federal Ministry of Transportation has already compiled all incidental items and cost overrun from the $1.5 billion initially earmarked for the project, and is set to submit the list to the Bureau of Public Procurement (BPP) and the Federal Executive Council (FEC) for considerations and approvals.
Investigations also revealed that part of the cost overrun threatening to Lagos-Ibadan standard gauge rail project includes: Apapa port rail sidings initially budgeted at 2.4km, has now been estimated at 6.4km.
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The rail siding, which is expected to connect all the terminals in Apapa port to the standard gauge rail, was budgeted based on 2.4km calculation.
Rotimi Amaechi, Minister of Transportation, has directed that the difference should be calculated as part of the projects cost overrun,” a ministry source told BusinessDay.
The source further said: “Another cause of cost overrun is the identification and relocation of oil and gas pipelines in the port. A cost effective solution, which involves construction of protective structures over the oil and gas pipelines is being sought instead of outright relocation of the pipes.
“However, the detection of many underground oil and gas pipelines remain a challenge for the project consultant, and the use of a geo-radar equipment to detect underground pipelines is set to be put to use.”
This, the source said, was not part of the project budget and it was not envisaged the use of a geo-radar equipment at inception, and this also forms part of the project overrun that the Minister has already directed should be collated for onward submission to FEC.
Amaechi, during his routine inspection of the project explained that such cost overrun is expected as the project progresses.
“We will definitely have scenarios as the project progresses. Many of the issues we are having now were not envisaged at inception. We have asked that all cost overruns be submitted to the Ministry,” Amaechi said.
Recall that Fridet Okhiria, managing director of NRC, said the call for extension of the deadline of the project by the National Assembly had not been approved.
The delay will further put burden on port users as stakeholders call for effective use of rail line in cargo movement.
Hadiza Bala Usman, managing director of NPA, who have shown commitment to using effective intermodal transport system to move cargoes from the nation’s seaports, said that NPA under her management is keen to prioritising the movement of cargo by rail.
Usman said that the Federal Ministry of Transport needs to provide clear timeline and percentages of cargoes that should be moved through the different nooses of transportation that include inland waters, road and rail line.
“We need to determine the percentages to be apportioned to a particular transportation model because all cargoes cannot be moved by road. For instance, we need to determine that 30 percent of our cargoes must go through the rail and commit about three to four years timeline and deploy the necessary resources to building the needed infrastructure to achieve this,” Usman added.
AMAKA ANAGOR-EWUZIE
