Light Rail project not meant to mortgage Kano State – Gov. Ganduje

7 years ago

Light Rail project not meant to mortgage Kano State – Gov. Ganduje

Governor Abdullahi Ganduje has revealed that the $1.85 billion development loan obtained by the state government from China is of concessional nature on favorable terms and not meant to mortgage the future of the state, as insinuated by political detractors.

“The interest on the loan will not be more than three percent while the loan has a repayment period of 15 years. The Chinese Bank will give 85 percent of the contract sum while we (Kano state government) will provide the remaining 15 percent”, the governor stated.

He made the clarification on Thursday while inaugurating a 13-member committee to ensure effective implementation of the Kano Metropolitan Light Rail project, to be executed by a joint venture of China Railway 18th Bureau Group Ltd and China Railway Construction Electrification Bureau Group.

The governor stated that from its improving revenue earnings, the state government realized that it could pay the 15 percent of funds required for the project, adding that the rail project will pay for itself in the long term and leave a lasting legacy for future generations.

He said government had decided to take the loan to finance the project because developed countries across the world resort to development financing, in the form of bank loans, to finance capital intensive developmental projects.

“The rail projects in Britain Germany, France and the US were constructed with bank loans. Also, the light rail projects in Lagos, Port Harcourt ad Kaduna were constructed with loans obtained from banks. Even the Lagos – Abuja – Kaduna – Kano rail project, being constructed by the Federal government is financed with a loan. Ours is not an exception, so anybody who thinks we can do it alone is economically naive”, the governor asserted.

Governor Ganduje said the impelmntation committee was expected to liaise with the contractors, the investment bankers, coordinators of the project and the Federal Government that guaranteed the project.

Responding on behalf of the committee members, the Chairman, Alhaji Isyaku Umar Tofa, who doubles as chairman of the state Investment Promotion Agency, thanked Ganduje for the appointment, and assured that the committee would justify the mandate.

Governor Ganduje, who returned recently from a trip to China, explained that he met with officials of the Bank of China, Bank of Development and China EXIM Bank to discuss modalities for funding the project.

He also visited Saudi Arabia where he held a meeting with officials of the Islamic Development Bank in Jeddah, for financing the upgrade of Wudil Water Treatment Plant, seven regional water schemes as well as irrigation facilities across Kano.

Meanwhile, Governor Ganduje, alongside some state governors and top security officials met in Abuja, with the National Security Adviser, in respect of religious crisis and security challenges, arising from the current onslaught against Boko Haram in the North Eastern part of the country.