How Obasanjo Awarded $841.6m Rail Project Without Design

A Project Manager of a Chinese Civil Engineering and Construction Company, Etim Abak has told the Senate Committee on the Federal Capital Territory how former President Olusegun Obasanjo awarded the Abuja Rail Project in 2007 without an engineering design or a Memorandum of Understanding and inflated the rail project by $10m per km.

 

The revelation was made when the Senate Committee on Federal Capital Territory (FCT) led by Dino Melaye visited the site of the project to carry out oversight functions, Punch reports.

 

The committee discovered that the former Minister of FCT and current governor of Kaduna State, Mallam Nasir el-Rufai, allegedly signed the $841.645,898m contract based on an uncalculated estimate.

 

The committee also discovered that the contract, which was for 60.67-kilometre rail project, was inflated by $10m per km and that the length was later reduced to 45km without refund of the cost for the 15.67 km. All these were done against the laid down rules and regulation for which contracts are to be awarded.

 

In the face of that, the senate committee ordered the company to immediately refund $195,878,296.74 being the amount for the 15.67km that was cut out for cheating Nigerians.

 

Abak said, “The contract was awarded based on conceptual design and estimates were not properly done. There was no formal design submitted and rail bridges and crossover bridges were not captured in the contract.”

 

However, Melaye said his findings revealed that the rail project was inflated by over $10m per km and expressed his disgust at the conduct of the company to shortchange Nigerians.

 

“Now, you have reduced the length of the kilometre standard gauge from 60.67 kilometres to 45.245 kilometres. Meanwhile, there is no concomitant reduction if you juxtapose the length of kilometres and the reduction in terms of the cost.

“If we are to spend $841 million for 60.67 kilometres and now you have reduced to 45.245 kilometres and the only reduction in terms of monetary value is from $841.6 million to $823 million and with reduction of just about $17 million that to me is not commensurate to the reduction in terms of length, ‘’ he said.

 

He added: ‘’The federal government has so far invested $31.5 billion and another $7.6 billion from the SURE-P fund and if you put these together, we have altogether $39.1 billion invested in the rail project, leaving the balance of $113. 233 million. The sum of $3 million was proposed in the 2016 national budget of the FCT for the rail project.

“If you look at this, I would want to say that I did a personal 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 also questioned the rationale behind obtaining $500 million from Exim Bank of China for the project by the federal government, arguing that the money already injected into the project was more than enough to complete the project. Melaye insisted that the contract was inflated.

 

‘’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 even in India and Egypt. Fortunately, one of those projects in Zambia was also done by this same company, CCE.

“We have six countries and the average cost per kilometre, none is $4 million per kilometre. Why is the Nigerian project costing $13.8 million approximately $14 million dollars per kilometre.”