The Minister of Transportation, Mr. Chibuike Rotimi Ameachi recently hinted that ongoing construction of Lagos-Ibadan Standard Rail is expected to overshoot the $1.5billion projected cost. Although the minister expressed optimism that additional cost implication for the project would not pose major hindrance to the progress of the project which was originally scheduled for completion in December 2018, there is however growing concerns with regards to likelihood of delay and if not undue prolongation of the project on account of emerging development that has made additional funds compelling.
It would be recalled that series of development have trailed the construction of new Lagos-Ibadan standard rail gauge which constituted delay following the approval of $1.488billion for the project by the immediate past administration under a joint finance agreement by the Chinese and Nigerian government.
The construction of the rail project by the China Civil Engineering Construction Company (CCECC) has been subjected to series of variation in costs which largely derived from exigencies that were not hitherto factored into the initial budget. The Minister had, at an interaction with the media in December, 2017, noted that a number of obstructions to the modernisation plan would necessitate variation in the projected costs of the project.
Public institutions and facilities including schools, bridges as well as gas pipelines were marked for demolition in Ogun and Lagos states to accommodate facilities for the new rail line The Federal Ministry of Transportation is said to have liaised with the Bureau of Public Procurement (BPP based on inventory of new items on the project requiring supplementary costs beyond the $1.5bn. It is therefore hoped that the Federal Executive Council (FEC) would readily consider approval for the additional costs to enhance uninterrupted work and timely completion of the project.
Notwithstanding the release of the sum of $72 billion as counterpart fund for the project by the federal government, we are concerned that uncertainties surround a definitive time-frame for completion of works on the project. The completion of the Lagos-Ibadan axis of the rail modernisation initiative is no strategic for Nigerian economy. While ongoing works on the project have so far been commendable, earlier completion of the project within a definitive time-frame has become imperative. It would however be unfortunate if scenario of avoidable variation in costs continues to necessitate further delay on account of financial and administrative contingencies. Considering that the implementation of the project is jointly being financed on the basis of partnership, relevant authorities must therefore ensure diligent determination of items and exigencies to arrive at the new costs of the project. This has become necessary to facilitate completion of the project within a reasonable timeframe. Nigeria can only have value for money on the project if the completion of the project is not unduly extended.
In spite of the justification for additional funds to ensure that the modernisation initiative is fully delivered, it is however important to reiterate that such strategic project , considering its bilateral partnership nature ought to have benefitted from due diligence in the areas of design and financial projection. The government and the relevant agencies ought to have carried out proper evaluation of the cost implications from the onset. Regrettably, it is now obvious that budget overshoot may cause unnecessary delays in the execution of the project.
The strategic importance of the Lagos-Ibadan rail line could no longer be overemphasised considering the heavy commuting on the Lagos Ibadan expressway. Effective standard rail line would, no doubt, decongest the Lagos-Ibadan expressway that has become a menace owing to the high number of articulated vehicles on that route. Completion of the rail project would relieve the burden of commuters and in particular business stakeholders. Considering the economic and social importance of the Lagos-Ibadan rail line, it is important that govt does the needful expeditiously and not allow budget overshoot delay and derail the economic objective of the project.
We therefore expect that proper evaluation of the progress on the project as well as the outstanding items to be included in the project cost be carried out so as to arrive at a projection that would enable completion at a reasonable definitive timeline.Finally, we urge the federal government and the Federal Ministry of Transport to ensure that budget overshoot is properly addressed in keeping faith with the terms of the joint financing agreement and to ensure that the timely completion of Lagos-Ibadan Rail Project.
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