Nigeria Partners UK for Rail Project: FG Clarifies MoU with MPH

The Federal Government of Nigeria has recently clarified the status and implications of the Memorandum of Understanding (MoU) signed with a United Kingdom firm, Messrs.

MPH Rail Development (UK) Limited, for the design and construction of the Port Harcourt, Enugu, Calabar and Abuja standard gauge rail line on Public, Private Partnership (PPP) basis.

According to a statement issued by the Ministry of Transportation, the MoU is a non-binding agreement that states each party’s intentions to take action, conduct a business transaction, or form a new partnership.

The clarification came after comments and commentaries by certain persons, especially on social media, concerning the status and implications of the MoU signed on February 12, 2024, by the Minister of Transportation, Senator Said Alkali, with the firm.

The MoU in question arose from an unsolicited proposal presented by the British African Business Alliance (BABA), an association based in the United Kingdom with interest in business in Africa.

Its proposal was initially submitted to the Ministry on August 27, 2019. As required, the proposal (Outline Business Case) was submitted to the Infrastructure Concession and Regulatory Commission (ICRC) on December 8, 2023.

The major attraction of the proposal is BABA/MPH’s initiative to achieve 100% private sector funding for the project ‘with no loans or debt to the Nigerian Government or any of its agencies’, as captured in Article 3.3 of the MoU.

The Regulatory Commission on December 27, 2023, granted approval and issued a conditional OBC Certification.

It must be emphasized that Messrs. MPH Rail Development (UK), is the company incorporated by BABA, as the Special Purpose Vehicle (SPV) to ‘deliver’ the project.

It must be noted that a company to be used for such a purpose is usually new with nominal shareholding to allow for stake holding by parties to the project at the investment stage.

The Ministry of Transportation wishes to reassure Nigerians and the general public that it is committed to discharging its statutory mandate towards the realization of the “Renewed Hope Agenda” of President Bola Tinubu.