Saturday, July 25, 2020 2:58 pm
By Tony Iyare
Ordinarily, we should be celebrating, popping wine and dancing ourselves lame that the administration of President Muhammadu Buhari has finally completed the 276 kilometer standard guage Itakpe-Ajaokuta-Warri Railway which construction started in 1987.
But apart from haven fallen short of delivering this project on time, we have again largely kept to our sordid image of some costing abracadabra that merely flies in the face of what happens elsewhere.
Finished After 33 years
Is it not really tragic and intriguing that what was initially slated to be completed in 5 years has taken us 33 years to accomplish, recommending the project highly for the inglorious section of the Guinness Book of Records?
Almost akin to the pitiable story of the 27 kilometer Lagos mono rail project, yet to be finished after 11 years, we seem unperturbed about our snail stride in a world where many countries including the United Arab Emirate (UAE), have joined the exploration to Mars.
Missing a Milestone
If we had kept to schedule, the Itakpe-Ajaokuta-Warri line would have been the first standard guage railway in Africa but we opted to play the Russian roulette and missed that. Even countries like Ethiopia and Kenya, which started their standard guage railway many years after, had long completed their projects.
The protracted Itakpe-Ajaokuta-Warri railway line has a total length of 276 km and links Warri in Delta State to Ajaokuta, in Kogi State. The rail line now has a total of 12 stations in its new design. The line was originally conceived to transport Iron Ore from Itakpe to Ajaokuta and Aladja Steel Rolling Mills. It was also designed to transport processed steel to the port in Warri, Delta State.
Abandoned After Massive Work
It was unfortunate that successive governments could not pull through the initial vigour with which the project took off in 1987. After construction works were performed for 254 km, the project was abandoned. It was only in 2009 that it was again brought on stream with the Federal Government agreeing to pay $92.45 million (NGN 33 billion) for the design and completion of the outstanding 22 km.
The contract was then awarded to Technique Engineering, Architecture, Marketing (Team Nigeria) and Julius Berger, which were responsible for the construction of Ajaokuta-Warri section and construction of six stations and for the rehabilitation of the completed section.
A Funding Revival
In 2017, the Buhari administration announced that it was funding revival of the Itakpe-Warri rail line at a cost of $200 million (N72 billion). The plan was to get it ready for commercial operations by 2019. The project was then re-awarded to three construction firms – Julius Berger, China Civil Engineering Construction Corporation (CCECC) and ZTE.
Minister of Transport, Mr Rotimi Amaechi, who spoke during a tour of the project facility in Agbor and Warri, Delta State on Saturday, commended the contractors, CCECC, TEAM Nigeria and Julius Berger for living up to expectations in terms of quality delivery on the project.
“We are planning for the President to perform a virtual commissioning of this project. The contractors have since concluded their jobs and left the site, the only contractor left is the CCECC, and they will soon leave as well and hand over to NRC. We’ll know if NRC has done a good job when they manage it properly because the issue is maintenance. I am satisfied with the job done by CCECC, TEAM and Julius Berger. The contractors must be commended for a good job delivery,” he said.
The New Design
It’s quite upbeat that the Buhari government has not only redesigned it from its initial vision of a goods train to a central railway line that will also ferry passengers. It could therefore be understandable why many big cities in the axis were not initially linked.
The new design provided for 12 new stations between Itakpe and Warri in a new arrangement. Two stations are located between Itakpe and Ajaokuta with the remaining 10 stretching between Ajaokuta and Warri. They include Itakpe, Eganiy, Adobe, Itogbo, Agenebode, Uromi, Egehen, Igbanke, Agbor, Abraka, Okpara and Ujewu stations.
A whooping $3.9 bn (N1.4 Trillion) contract was also signed in October 2019 to extend it to Abuja, the Federal Capital Territory. The contract for the new 252.6 kilometer Abuja-Itakpe-Lokoja rail line was awarded to China Railway Construction Corporation (CRCC) under a public-private partnership. Expected to pass through Baro, which now has an inland port, the rail line will also link Lokoja, the Kogi State capital. As part of the agreement, the Chinese firm will also construct a link to the Warri seaport.
Amaechi stated that Nigeria will contribute 15% of the project cost, CRCC will invest 10% while CRCC will borrow the remaining 75% from Special Purpose Vehicle (SPV). The company will also be responsible for managing the rail network until the loan is repaid, after which the project will be handed over to the federal government.
“We will give them sovereign guarantee and they will give us performance bond that protects our sovereign guarantee. When they finish construction, they will manage for 30 years,” he explained.
A Viable Line
But until the Itakpe-Ajaokuta-Warri railway is linked to Abuja, it may not be really viable as a passenger line. The rail line also needs to be connected to Benin City, Asaba/Onitsha and perhaps Akure and Ado Ekiti to further boost its commercial value.
The eventual connection of Benin City, Asaba/Onitsha to the proposed Lagos-Calabar Coastal Railway and Akure and Ado Ekiti to the Western line would be the nadir for the industrial transformation of many of the adjourning cities.
Addis Ababa-Djibouti Line
While we played chess with the Itakpe-Ajaokuta-Warri railway, Ethiopia and Djibouti launched the first fully electrified cross-border standard guage railway line in Africa which links Ethiopia’s capital, Addis Ababa, to the Red Sea port of Djibouti – a stretch of more than 750km (466 miles).
Travelling at 120km/h, the new service cuts the journey time down from three days by road to about 12 hours. The $3.4bn (£2.7bn) project was built with the help of funding from a Chinese bank.
In 2011, one year after finalizing the plans on the national railway network, financing was secured for ERC-Route 1 (the Addis Ababa–Djibouti Railway) and construction was awarded to Chinese construction firms. In October 2016 and January 2017, the railway was completed and inaugurated.
The 759 km railway cost around US $3.5b (US $4m per km of railway) with the Exim Bank of China facilitating a package, that resulted in loans of about US $2.5b in total for the Ethiopian section of the railway plus another US $500m for the Djiboutian section.
A later survey revealed that the actual costs were around US $5.2m per km of railway, around 30% more than planned, resulting in total costs of around US $4.5b. As the loans came from China, most contractors were from China. The construction was an EPC/Turnkey project (FIDIC). Djibouti is particularly important to landlocked Ethiopia which currently imports and exports nearly 90% of its goods through its port.
In 2011, Kenya signed a memorandum of understanding with the China Road and Bridge Corporation to build a 609 kilometer standard-gauge railway between the Indian Ocean port city of Mombasa and Nairobi, the country’s capital. The US$3.6 billion railway was the largest infrastructure project ever undertaken in Kenya since independence.
Financing was finalised in May 2014, with the Exim Bank of China extending a loan for 90 percent of the project cost and the remaining 10 percent coming from the Kenyan government. 25,000 Kenyans were hired to work on the project. Track laying was completed by December 2016 while Passenger service was officially inaugurated on 31 May 2017, eighteen months ahead of schedule. Even the extension from Nairobi to Naivasha was completed in October 2019.
Comparing Rail Contracts
Although it may be too simplistic, to compare two rail contracts only on the basis of distance. The terrain and other factors can also significantly affect the cost. Even the 392 km Awash–Weldiya Railway which connects the whole north of Ethiopia, with almost a third of the Ethiopian population, with the main line and additionally through the Addis Ababa–Djibouti Railway with Ethiopia’s lifeline, the port of Djibouti is way below the Nigerian costing.
The construction contract assumes costs per km of railway to be US $3.8m, which is surprisingly low for a challenging terrain with 56 bridges and 12 tunnels (tunnels: 10 km length) with theoretical calculations amounting to $7m per km in 2015.