The Senate on Tuesday rescinded its decision on the financier of the Kaduna- Zaria-Kano railway project in the country from the China Exim Bank to the China Development Bank.
With this development, the Senate has harmonised the terms of the 2016-2018 Federal Government’s external borrowing plan for the project.
The resolution was a sequel to a motion by Senator Sadiq Umar (APC, Kwara North).
In his presentation, the Senator, who noted that the National Assembly had in 2020 approved $22,798 446,773 loans for the railway modernisation project of the Kaduna-Kano segment, recalled that the National Assembly approved the sum under the 2016-2018 Medium Term External Borrowing (Rolling) plan.
The loan which is commercial, with a maturity period of 15 years, the Euro as currency, has an interest rate of 2.7 percent plus six months, a commitment fee of 0 .4 percent, and an upfront fee of 0.5 per cent.
The Senator who also recalled that the communication from the Federal Ministry of Finance requesting the approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna-Kano segment), said: “This was occasioned by the COVID-19 pandemic whereof China Exim Bank withdrew its support to finance the project”.
Umar added that to secure the funds for the project, “the contractor, CCEC Nigeria Limited, in collaboration with the Federal Ministry of Transportation, engaged China Development Bank (CDB) as the new financier in the sum of $973, 474, 971.38.
In his contribution, Senator Isa Jibrin (APC, Kogi East), who noted that there was a wide gap between the $22.7 billion and the $973.4, said: “Was any disbursement made out of the $22.7 billion”.
He advised that going forward “We need to be very careful about the core structures of these loans.
Clarifying the matter, the Chairman of the Senate Committee on Local and Foreign Debts, Senator Clifford Ordia (PDP, Edo Central) said: “The submission of $22.7 billion was in respect of five projects under the 2016-2018 external borrowing plan.
“Incidentally some of the other projects were approved apart from the project that has to do with the Kaduna-Kano segment.
“The financier declined to finance the project. So they had to look for a contractor to finance the segment of the rolling plan”.
Senate President, Dr Ahmad Lawan explained that “this issue started in 2018 but we approved it in 2020.
“We are not talking about the approval of the loan, it’s the financier that backed out and there is now another financier”.
