Lagos - Nigeria will spend $8,3-billion (about R55-billion) on a new railway line over the next four years in an ambitious 25-year plan to upgrade and modernise its dilapidated rail network, President Olusegun Obasanjo said on Wednesday.
Part of the funding of the first phase of the project will come from a $2-billion soft loan from China, Obasanjo said. The phase covers the construction of 1 315km of standard gauge double track lines from the commercial capital Lagos to the northern city of Kano.
"Phase 1 is scheduled to be completed in four years at a cost of $8,3-billion of which $2-billion is being obtained as soft loan from the Chinese government," Obasanjo said in a nationwide radio and television broadcast.
"To start with, the Federal Government is committing the sum of $2,5-billion," Obasanjo said.
The second phase will link the southeastern oil hub of Port Harcourt with the central city of Jos.
The project is part of a 25-year plan to build new lines and rehabilitate Nigeria's shambolic railway system, built a century ago under British colonial rule.
Nigeria is trying to award a concession for the 4 300km rail network, which has fallen into almost total collapse since the mid-1990s because of neglect and mismanagement. Moving trains are now a rarity in Africa's most populous nation and top oil producer.
The government's efforts to award a concession for the aged system have so far attracted little enthusiasm since the Bureau for Public Enterprises first invited investors to express an interest over a year ago.
Privatisation advisers Canada's CPCS Transcorp said in a report in June that the world's eighth largest oil exporter needs to spend about $30-million on upgrading the system to make it attractive to investors.
At its peak in 1994, the system running on narrow gauge track and managed by the Nigerian Railway Corporation, carried 15.5-million passengers annually, but the figure dropped to one million in 2004.