IGBOZURUOKE FORUM

The Nigerian Ministry of Transport has claimed that the Memorandum of Understanding (MoU) signed with UK company, MPH Rail Development for the proposed Port Harcourt-Calabar-Enugu-Abuja standard gauge rail project is not legally binding.

This was stated in a statement issued by the ministry’s Director, Press and Public Relations, Olujimi Oyetomi on Sunday, adding that the MoU signed on February 12, 2024 by the Minister of Transportation, Senator Said Alkali on behalf of the ministry, was to provide a platform for further discussion between parties to determine whether the project could be executed or not.

Many Nigerians have expressed their reservations over the planned project on the social networking platform, X.

The criticisms varied from the UK company’s capacity to accomplish a project of that magnitude, given its lack of experience with previous projects, to the need for further information on the route, as there are existing corridors that might be used.

Former presidential advisor Tolu Ogunlesi pointed out that there is already a Warri-Itakpe Standard Gauge Rail, and he proposed an expansion from Warri to Port Harcourt and Itakpe to Abuja to create a Port Harcourt-Abuja Standard Gauge Railway.

Meanwhile, a search of the UK government website (gov.uk) revealed that Messrs MPH Rail Development Limited was founded in 2019, implying that the company has little experience in the industry.

Furthermore, the company lacks a website, and it was alleged that its four Nigerian directors were appointed in 2023, implying that the leadership may not have had enough time to develop a strong operational structure.

Reacting to these controversies, Oyetomi’s statement said the MoU originated from an unsolicited proposal presented by the British African Business Alliance (BABA), an association based in the United Kingdom with an interest in business in Africa.

It continued: “Its proposal was initially submitted to the Ministry on 27th August 2019. As required, the proposal (Outline Business Case) was submitted to the Infrastructure Concession and Regulatory Commission (ICRC) on 8th December 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 Regulatory Commission on 27th December, 2023 approved and issued a conditional OBC Certification. It is pertinent to note at this juncture, that COVID-19 was a major contributor to the time lag between the initial proposal and the ICRC OBC Certification.

“Messrs. MPH Rail Development (UK), is the company incorporated by BABA, as the Special Purpose Vehicle (SPV) to ‘deliver’ the project. It must be emphasized that a Company to be used for such a purpose is usually new with nominal shareholding to allow for stakeholding by parties to the project at the investment stage.

“For the avoidance of doubt, the following are the major terms of the MoU: The primary purpose of the MOU is to provide a platform for further discussion between parties to ascertain the possibility of executing the project or otherwise. It does not create a legal or contractual agreement nor did it commit the Federal government in any way;

 “Article 3.3 of the MoU affirmed that BABA/MPH’s initiative is to achieve 100% private sector funding for the project ‘with no loans or debt to the Nigerian Government or any of its agencies’;

 “A fundamental deliverable under the MoU is for MPH to design a funding and implementation model and submit same to the Ministry within 90 days of the MoU for further consideration and scrutiny;

“MPH, within the above-stated 90 days period will equally submit its Programme of Action to demonstrate its achievement of all the preconditions highlighted by ICRC, before further engagement with the Government;

“And the MoU also sets up a bilateral Technical Committee to monitor the Company’s commitment towards achieving the above milestones and ensuring that the project objectives are well within sight.”

‎Sahara Reporters