In yet another example of Chinese influence on Nigerian transportation construction, two subsidiaries of China Railway Construction Corp. (CRCC) have won a provisional $1.8-billion engineering, procurement and construction contract for a four-line, 74.3-kilometer light-rail project in Nigeria’s northern state of Kano.
In an Aug. 30 statement, CRCC says China Railway 18th Bureau Group Co. Ltd. and China Railway Construction Electrification Bureau Group Co. Ltd. now await official approval from President Muhammadu Buhari and fulfillment of conditions set out in the financing bank's letter of intent. The bank has not been named, but, to date, all Nigeria’s railway projects have been financed by Exim Bank of China.
“The Company considers that there are still uncertainties in the final execution of the general contracting and subcontracting agreement,” the company said in a statement.
The Nigerian president’s office and CRCC did not immediately respond to emails to confirm when the two conditions, which are set out in the agreement with Kano’s Ministry of Works, Housing & Transport, are likely to be met.
CRCC stated that the standard-gauge railway lines have been designed for a speed of 100 km per hour and will be completed in the next 24 months. No construction commencement date was provided.
“The contract amount of the project accounts for approximately 2% of the operating revenue of the Company for the year 2015 under the People's Republic of China (PRC) accounting standards,” the company said.
Chenyi Lu, Moody's Investors Service vice president and senior analyst, on Sept. 1 said, “CRCC contract size accounts for about 0.7% of the company’s total order backlog, or 3.3% of its overseas order backlog at end-June 2016.”
"This award demonstrates the company's strong capabilities with cutting-edge technologies in railway, urban rail transit and bridge construction to win large-scale and complex projects overseas," he said.
The award of the Kano light-rail project demonstrates yet again the growing influence of Chinese construction companies on Nigeria’s transport sector. In August 2012, China Civil Engineering Construction Co. (CCECC) was awarded a $1.53-billion contract for the proposed double-track, standard-gauge 132-km line connecting Lagos and Ibadan. However, the completion date has been pushed back to 2018 from 2016 because of the falling value of the local currency and problems in acquiring land along the project route.
In July, after a three-year delay, the CCECC-constructed $876-million Abuja-Kaduna standard-gauge railway line opened.