GE terminates $2.2bn Nigeria’s rail contract agreement … Amaechi says, not a setback for project

The General Electric Company has terminated its concession agreement worth $2.2bn with the Nigerian government over the narrow gauge rail rehabilitation project.

This is even as the firm said it’s handing it over to Transnet SOC Ltd. in line with its strategy to exit the transportation business.

Agreements GE reached with the Nigerian government “are now being negotiated by Transnet and its consortium partners” including Sino Hydro of China and APM Terminals, the Boston, Massachusetts-based company said in an emailed response to questions. GE will focus on infrastructure development in Nigeria in areas such as health care and power, it said.

GE won a contract last year to manage Nigeria’s narrow-gauge rail network in partnership with three other companies. It signed an agreement with the West African nation’s authorities in April to proceed with the interim phase of the narrow-gauge concession that is expected to grow freight haulage capacity in the country ten-fold to 500,000 metric tons annually.

“Transnet has been a trusted partner of GE for several decades,” GE said. “We have confidence in their ability and that of the other consortium members to execute on the rail concession project successfully.”

Nigeria is opening up its rail system to private investors following decades of government control as authorities seek to boost infrastructure in the country that vies with South Africa as Africa’s biggest economy.

Meanwhile, the Minister of Transportation, Mr. Rotimi Amaechi, has said the pull-out of General Electric from Nigeria’s railway concession is not a setback for the project.

Amaechi stated this on Thursday in Lagos during a visit to China Civil Engineering Construction Corporation to inspect the extension of a standard gauge railway line from Ibadan to Apapa seaport.

Bloomberg reported on Wednesday that GE said it was withdrawing from the railway concession and handing it over to Transnet SOC Limited in line with its strategy to exit the transportation business.

The country is opening up its rail system to private investors following decades of government control.