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N75 BN RAIL LOAN: SENATE, FCTA ON COLLISION COURSE

By NBF News

The Senate and the Federal Capital Territory Administration (FCTA) may be on collision course, following the decision of the FCT to press ahead for a $500 million (N75 billion) loan facility from the Chinese Government for the construction of Abuja Light Rail in defiance of an upper chamber's resolution against it.

Majority of the Senators had on Tuesday, 20th April 2010 during the consideration of the 2010 FCT Statutory Appropriation Bill of N350,324,793,630 kicked against the move by the FCT administration to obtain the loan on the ground that the 10 per cent interest to be paid on the loan is on the high side.

The lawmakers described the interest rate as the highest in the world given that it was supposed to be a product of a bilateral agreement. The Senators then moved against the loan calling the FCT authorities to stay action on it. It would be recalled that the contract for $840 million Abuja Light Rail awarded to Chinese Civil Engineering Construction Corporation (CCECC) in 2008 was part of the inter-modal transportation system initiated to alleviate the transportation problems of Abuja residents and the neighbouring towns.

It was gathered that 15 per cent mobilization fee had been paid to CCECC while an additional budgetary provision was made in the 2010 Appropriation Act for the project in order to meet the 2012 completion date.

It was gathered that the team led by the Minister of Finance, Olusegun Aganga and Minister of Transport, Suleiman Yusuf was expected to have left for China since June 22, to sign all necessary agreements in furtherance of the release of the loan.

It was gathered that the team which would have left with the CCECC management, shelved the trip and rescheduled it, in order to accommodate Senator Bala Mohammed, the FCT minister and others that were supposed to be on the trip.

During the debate leading to the stop order resolution passed by the Senate, Iyiola Omisore, Chairman, Senate Committee on Appropriation noted that the ten percent interest rate offered by the Chinese government remained the highest so far in the world and that taking the loan with such high interest rate for the execution of Abuja Light Rail project 'was unacceptable and unprecedented.'

Other senators who spoke against the loan included Mohammed Lawal, Uche Chukwumerije; Jubril Aminu; Effiong Bob among others.