Nigerian Government Clarifies MoU with UK Firm for PH-Abuja Rail Line Project

The Nigerian Government has responded to the backlash and controversy surrounding the Memorandum of Understanding (MoU) it signed with Messrs MPH Rail Development Limited, a UK-based firm, for the construction of the Port Harcourt-Enugu-Calabar-Abuja Standard Gauge Rail Line.

In a statement issued on Sunday by the Ministry of Transportation, Minister Sa’idu Ahmed Alkali clarified that the MoU is still in its preliminary stage and is not a legally binding agreement.

He explained that the MoU provides a platform for further discussion, scrutiny, and the provision of required guarantees by the parties to reach an agreement if they are satisfied.

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

The proposal was initially submitted to the Ministry on August 27, 2019, and the business 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 ICRC granted approval and issued a conditional OBC Certification on December 27, 2023.

The statement from the Ministry of Transportation comes after some Nigerians expressed concerns about the UK firm’s capacity to deliver the project, citing the company’s newness in the rail construction industry.

Critics also pointed out the need to revisit an existing project as noted by former presidential aide Tolu Ogunlesi, who suggested extending the existing route from Warri to Port Harcourt and from Itakpe to Abuja to get the Port Harcourt-Abuja Standard Gauge Rail.

In response to these concerns, the Nigerian Government has emphasized that the MoU is a preliminary step in the process and that further discussions and scrutiny will take place before any final decisions are made.