The Federal Government said yesterday that the exit of American industrial giant, General Electric, from the concessioning agreement on the narrow gauge will not affect modernisation of railway.
It said GE’s exit was borne out of the firm’s decision to divest from transportation business into health and environment sectors of the economy.
Minister for Transportation Rotimi Amaechi, who said this in Lagos yesterday, added that the GE’s exit would not affect the Federal Government’s commitment to modernise the railway.
He said the concessioning of the narrow gauge is irreversible.
GE, by the concessioning, ought to have injected $2.7 billion into the narrow gauge system to overall and modernise the narrow gauge.
Under the agreement, GE was meant to inject 20 locomotives and 200 wagons into the narrow gauge, which was meant to breath a new lease of life into cargo traffic.
Amaechi said with GE’s exit, Transnet Logistics Ltd. (which based on original agreement, was handling tracks), would now be the lead partner to drive the process.
Transnet Logistics Ltd. would be leading other consulting consortium that includes AP Moller Terminal Ltd (APMT), which is in charge of containers, Sino Hydro, in charge of logistics.
GE had been awarded the concessioning of the nation’s narrow gauge, the major railway asset, by the Muhammadu Buhari administration in 2016, with the aim of modernising cargo and passenger operations on the narrow gauge.
Under the agreement, GE was to operate the system for 30 years.
The concession, however, ran into stormy waters, as series of controversy overtook its operations, forcing the Federal Executive Council (FEC) to set up a transactions advisors committee.
The committee drew up an interim roadmap for the eventual takeover of the entire railway asset of the corporation after a 12-month period.
The committee had initially proposed that GE begins the operations of the acquired asset in May 2017, it later shifted to December of same year, which again had to be shifted to first quarter this year.
Early signs that the concession agreement might have been botched, however, reared its head as the GE refused to takeoff.
The Federal Government had intended the new owners to run full operations – passenger and cargo along the corridor. But GE had its eyes exclusively on cargo business.