New $15bn rail line to boost economy of Nigeria’s oil region
BY BEN EGUZOZIE
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Rail network to connect nine states
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First big-ticket project in region in history
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US firm, Atlanta Global involved
The economy of Nigeria’s oil region is historically set to get its biggest boost with potentially its first big-ticket infrastructure project – a $15 billion regional rail line that will string through the nine contiguous states of the Niger Delta region, about to get underway.
Checks by Business A.M. indicate the region has total subnational gross domestic product (GDP) of N50.92 trillion or $126.12 billion (GDP at official exchange rate) or $329.5 billion (GDP PPP) as of 2021. With vast maritime potential, it is home to all, but one of the seven Nigeria Eastern seaports located here.
The railway project is the outcome of a first public private participation (PPP) summit organised by the Niger Delta Development Commission (NDDC), an agency set up 23 years ago to drive critical development in healthcare, education, transportation, jobs, and other infrastructure in a region with a distorted economy, harried population and ravaged environment from more than half-a-century of oil production. The NDDC PPP 2023 Summit was themed, “Rewind to Rebirth: Building a Sustainable Future through Public Private Partnership for Progress in the Niger Delta”.
The regional railway network will connect the nine contiguous states of the Niger Delta region. A memorandum of understanding (MOU) was signed in Lagos on the sidelines of the summit between the NDDC, the United States Consulate (in Nigeria) and a United States-based infrastructure project financing firm, the Atlanta Global Resources Inc. (AGRI) based in Atlanta, Georgia, US, to build the rail line that will link up all the oil producing states.
Initially called the regional railway network, this project has been long in coming. It was clearly listed as a big-ticket project in the NDDC development blueprint, known as the Niger Delta Regional Development Master Plan (NDRDMP). Just like the entire content of the masterplan which has been gathering dust on NDDC’s shelves since about 2008-2009, the rail project was not touched by any of the boards and managements of the federal government quango. Each administration rather busied itself with phoney contracts, financial sleaze and accumulation of legacy debts. At the last count, these debts amounted to about N3 trillion. The current board under Lauretta Onochie is pleading for more time with contractors.
In particular, the NDDC-AGRI deal is for the construction of a mega rail line that would connect the nine states that make up NDDC, and ease the transportation deficit in the oil-rich Niger Delta. The US infrastructure company will provide locomotives, construct railway lines and operate the same, covering oil producing states of Rivers, Bayelsa, Akwa Ibom, Ondo, Edo, Delta, Imo, Abia and Cross River. The MOU was signed by Samuel Ogbuku, managing director and chief executive officer of the NDDC, on behalf of the Commission, Chamberlain Eke on behalf of the United States Consulate, and Tony Akpele on behalf of AGRI.
Perhaps the biggest ticket project in the history of the NDDC, work on the preliminary stages of the regional railway project is expected to start immediately.
Ogbuku said the Commission was now determined to renavigate the process of its intervention in the Niger Delta so that it can achieve its mandate of “facilitating the rapid, even and sustainable development of the area into a region that is economically prosperous, socially stable, ecologically regenerative and politically peaceful.”
He said the MOU signified a big harvest for the NDDC from the PPP summit.
The Niger Delta region stretches for nearly 150 miles (240 km) from north to south and spreads along the coast for about 200 miles (320 km), extending over an area of 14,000 square miles (36,000 square km), according to Encyclopaedia Britannica. As now defined officially by the Nigerian government, the region extends over about 70,000 square km (27,000 square miles) and makes up 7.5 percent of Nigeria’s land mass.
The region has no railway connecting its states, except some portions of the Eastern Line which connects Port Harcourt through Aba and Enugu before moving up north to Makurdi terminating at Maiduguri – a distance of 1,036 km or 644 miles.
Made up of nine oil producing states – Rivers, Bayelsa, Delta, Akwa Ibom, Imo, Abia, Edo, Ondo and Cross River – the region, according to checks by Business A.M. has total subnational gross domestic product (GDP) of N50.92 trillion or $126.12 billion (GDP official exchange) or $329.5 billion (GDP PPP) as of 2021, according to Wikipedia. It has vast maritime potential, with all but one of the seven Eastern seaports located here.
Some development experts and economic analysts note that the new posture of NDDC – of engaging in a big-ticket project like the $15 billion railway line – is quite impressive – saying it is historically the commission’s first big move in over 20 years to chart a course of development for the oil region.
“Far back, after the implementation of the Master Plan, we decided on an implementation plan which involved all key stakeholders. We decided that the Master Plan cannot be funded by the government alone. We needed the private sector, that is why I support holding the summit in Lagos, Nigeria’s financial capital. The concept of rewinding and rebirth is sweet to the ears,” said Timipre Sylva, immediate past oil minister of state.
For Dakuku Peterside, the former managing director of NIMASA, the NDDC new board and management led by Lauretta Onochie is striving to leave legacies in the region. “The PPP arrangement is a new way of getting good results. There must be a fusion between the private sector and the public sector. It is important to bring in the resources and expertise of the private sector,” he said.