President Muhammed Buhari has queried the Ministry of Finance demanding explanation on the diversion of foreign loans obtained for rail projects to other purposes.
The President expressed his disappointment over the development after a presentation on the activities of the Ministry of Transport by the Permanent Secretary, Mohammed Bashar, on Monday at the Presidential Villa.
Buhari was reacting to the specific instance of the diversion of a substantial part of the loan of $1.005 billion from the Chinese Exim Bank, obtained for the construction of a standard gauge rail line linking Lagos to Kano, which was moved elsewhere.
A statement issued after the closed-door presentation said the Permanent Secretary had informed the Buhari that only $400 million of the loan remained with the Ministry of Finance.
The President expressed disappointment that foreign loans obtained in line with signed agreements were diverted to another project.
According to him: “I hope that due process was followed before such diversions were carried out. Taking money from one project to another has to be done properly.”
Buhari lamented a situation where government had, over the years, failed to meet its counterpart funding obligation on some projects, leading to such projects being becoming uncompleted or abandoned.
He spoke of the need to streamline, harmonize, and prioritise on-going projects in the transportation sector.
Bashar also briefed the President on other challenges facing the transport and maritime sectors such as encroachment on railway land, lack of security on inland waterways and the confused nature of agreements between the Nigeria Ports Authority and ports concessionaires.
Also on Monday, the President who was also briefed on activities of the Federal Ministry of Transport, directed the management, led by the Permanent Secretary, Mohammed Sambo Bashar, to adhere to terms of agreement with firms constructing some new modern standard gauge rail lines.
Addressing State House correspondents afterwards, Bashar said the President was impressed with pace of work concerning major ongoing projects in the Ministry and was willing to see them through under his administration.
Specifically, he said the President insisted that there must be respect for agreements with contractors handling seaports and rail lines, disclosing that laying of tracks on the Abuja-Kaduna rail project has been completed. Locomotives already paid for, he noted, are still being awaited as the Ministry intends to begin operations on the route in December.
Bashar pointed out that the rehabilitation of old narrow gauge rail lines was ongoing while the Lagos to Kano route has since been resuscitated.
He also revealed that rehabilitation work has started on the Port Harcourt-Kano and Kano-Gombe rail lines.
In the words of Bashar: “We presented to the President the various programmes and projects and the reform efforts we have been undertaking in the last couple of years, the stages of the various projects, especially the railway rehabilitation programme and development in our seaports.
“The President quite appreciated a lot of what has been achieved so far and he has indicated his willingness to continue with a lot of projects and programmes already on ground.
“And he has expressed his support, especially when we start talking about the capacity building for individual operators in the country.
“He is really appreciative of the entrepreneur initiatives of Nigerians and indication that government will continue to give its full support,” he added.
On specific directive from the President, Bashar said “there are issues that he thinks we should pay a lot of attention to, especially in the execution of agreements that we have entered into.
“He emphasized on the need to adhere strictly to the terms of agreements and we are going to abide by that.”
“Basically, those agreements are related to the projects we entered into concerning the construction of railway, standard gauge lines and rehabilitation programmes.
“With regards to Abuja-Kaduna, track has been completely laid and we are now waiting for locomotives to arrive, which have been ordered and paid for. Our belief is that we will meet the deadline of December, 2015.”