Transportation Minister Rotimi Amaechi says rail lines are not viable means to pay back loans taken from China and other foreign countries for its construct.
Mr Amaechi in an interview on Arise TV on Monday explained that it is impossible to service the loans with proceeds of the rail business as a result of its low economic viability.
Despite admitting that accruals from rail transport on the Abuja Kaduna route moved from N70 million to N350 million as of May, the minister said that he was not aware of anywhere in the world where loans was a major source of repayment of such loans.
“You are looking at economic viability, I am not aware of anywhere in the world… please help furnish me with the information where rail line have been used to pay back such loans.
“Nowhere in the world. If you leave the rail as it is, it is not economically viable in terms of cash. What makes its economic viability is the fact that it provides services for those who are involved in other economic activities,” Mr Amaechi said.
The minister further disclosed that the construction of the Kano-Kaduna rail project will be funded from the budget pending when Nigeria gets the loan from China.
Mr Amaechi further declared that the Ibadan to Abuja rail project will commence when loan negotiation has been completed. He said the project would be completed months after the tenure of President Muhammad’s Buhari would have ended.
Mr Buhari had last week said he is prioritising the building of railways because of the bad conditions of roads in the country.
However, the president has been widely criticised for further compounding the country’s debt status with uncurbed government spending.
Nigeria has seen a vast reduction in its oil earnings in recent years, worsened by the COVID-19 pandemic, raising concerns on the country’s economic stability as against its growing debt profile.