GE pulling out of $2bn deal puts a damper on Nigerian Railway’s spirit   

14 November 2018 : Nigeria’s railway has suffered setback as GE has pulled out of the investment of $2.0billion into the deal as gradually bring the entire structure to a dead end. the development is in line with the GE decision to exit the transportation business from its port folio. The general electric had in May this year announced plan to cut down business unit. It announced a $11billion deal to merge its transportation with equipment maker Waptec.

Federal government since 2015 to restructure the country’s dilapidated railway lines. GE had proposed to invest US $2.0 billion in the deal which could have significantly improved the way cargoes are moved across the country, which will also saves time, money and also boost commercial productivity.

GE was initially has a deal with the leading infrastructure Construction Services Corporation in China which is SinoHydro based on Transnet, a leader in transportation and logistics infrastructure management and Apm Terminals. This resulted in the Federal government entering into another round of negotiation to rehabilitate the combined 3,500 kilometre decaying narrow lines of the railway across the country. The Transient top official has also confirmed that the Federal Ministry of Finance had ready issued a $45million standby credit for the rehabilitation of the railway project which will take off in November.

out of the $45million, about $19million was to be given to Transnet to bring in about 200 flat bed wagons to move in containers from the Apapa port, while another to be given by the Chinese Sino for the rehabilitation of the railway track up to ilorin in Kwara State and the balance of $6million was given to GE to rehabilitate 10 coaches. JP Morgan was supposed to monetise the US $45 million standby letter of credit so the that the interim phase of the work could begin.

However the transient offices has forwarded that if the interim phase of the work did not take off in November repairs could be delayed. it already November we confirm that the repairs on the railway tracks is still undone. we could not confirm if JP Morgan failed to monetise the US $45 million letter of credit guaranteed by the Ministry of Finance, hence the delay in the project.

Sources familiar with the railway industry told easy kobo that for the past 15years, the Nigerian Railway Corporation, has not had a single commercial contract. heavy containers the could be moved by railways are transported through roads which has result to wear and tear of the road due to excessive load. Sources familiar with the matter said due to the slow approach of the government is what has put the whole projection jeopardy. if the government had moved fast when GE was keen in the project 2015 and early 2016, cargoes would be moving by rail now.

The government was not committed enough to getting the project done when GE demonstrated significant interest. former GE CEO, John Flannery had visited Nigeria twice to iron out details of the deal in the space of one year which lasted between August 2017 and October 2018.

Eventhough, Oso, the GE official said that organic ion remains committed to the sustainable development in Nigeria, analysts say Nigeria will regret this missed opportunity to rehabilitate its old railway lines.

Analyst: Banke Odeyemi

Reporting for EasyKobo on Wednessday , 14 November 2018 in Lagos, Nigeria

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