The Nigerian Federal Government has awarded a $3.9bn public-private partnership contract for the new Abuja-Itakpe-Lokoja rail line to China Railway Construction Corporation (CRCC).

Passing through Baro, the rail line will have a branch line to the Kogi State capital Lokoja.

As per the agreement, the Chinese firm will also construct a seaport at Warri.

Minister of Transportation Rotimi Amaechi stated that Nigeria will contribute 15% of the project cost and CRCC will invest 10%.

CRCC will borrow the remaining 75% from Special Purpose Vehicle (SPV).

The company will be responsible for the management of the rail network until the loan is repaid, after which the project will be handed over to the federal government.

Nigerian local newspapers quoted Amaechi as saying: “We will give them sovereign guarantee and they will give us performance bond that protects our sovereign guarantee. When they finish construction, they will manage for 30 years.

“When they recover their money, the ownership of the asset will revert back to the Government of Nigeria. The 15 per cent covered by us will be paid gradually.

“The entire railway for now in Nigeria is constructed 100% by CRCC. I think that the good working relationship we have had with CRCC is the reason we have not been able to engage other companies.”

In July, the first phase of a new light rail railway line in Abuja, Nigeria, built by China Civil Engineering Construction (CCECC) through an investment of $823m, began commercial operations.

The government began the construction of a 156.65km standard gauge rail line from Lagos to Ibadano in January 2017.