FG SIGNS $1.9BN KANO-MARADI RAILWAY LINE CONTRACT

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…To Earn N7.9bn From 161 Shortlisted Firms For Marginal Fields Bid Round

The federal government, yesterday, signed the Memorandum of Understanding with Mota- Engil Group on the construction of $1.959 billion Kano-Maradi Standard Gauge Railway lines.


Just as it is also targeting to earn about N7.9 billion from 161 oil firms that have been shortlisted by Department of Petroleum Resources (DPR) for the marginal fields bid round which took place last year.

The minister of Transportation, Rt. Hon. Chibuike Rotimi Amaechi, signed on behalf of the federal government while the managing director, Mota- Engil, Antonio Gvoea signed on behalf of the contracting firm.

The new railway corridor which is to be located in northern Nigeria will run through three states: Kano, Jigawa and Katsina and through Niger territory as far as Maradi.

Other cities that will be connected with the rail line in Nigeria are: Danbatta, Kazaure, Daura, Mashi, Katsina and Jibiya.

The director of press of the ministry of Transportation, Eric Ojiekwe explained that “the 283.750 kilometre rail line, besides developing freight and passenger transport as it will be integrated with road transport, will make a great contribution to the local economy as well as an important development in the social sector.”

The project duration is for 36 months and the contract type is Engineering, Procurement and Construction.

The signing ceremony was witnessed by the permanent secretary, Federal Ministry of Transportation, Dr Magdalene Ajani; the director, Legal Services, Pius Oteh; the managing director, Mota-Engil Group, Antonio Gvoea; head of Legal, Mota- Engil Group, Cameron Beverley; Magajin Garin Kano, Muhammad Wada; director, Mota-Engil Group, Kola Abdulkarim; vice president, Mota-Engil Group, Mohammed Abdul-Razaq; Nigerian Ambassador to Germany, Yusfu Tuggar; the managing director, Nigerian Nigeria Railway Corporation, Fidet Okhiria.

FG To Earn N7.9bn
In a related development, the federal government says it hopes to earn about N7.9 billion from 161 oil firms that have been shortlisted for the marginal fields bid round which took place last year.

The Department for Petroleum Resources (DPR) had announced on June 1, 2020 the start of the 2020 Marginal Field Bid Round, which ‘is open to indigenous companies and investors interested in participating in the exploration and production business in Nigeria’.

The DPR said then that 57 marginal fields were available, with data from the agency showing that applicants would pay fees totalling N49.09m per field (comprising N5.5m and $115,000).

According to the agency, a marginal field is any field that has been discovered and has been left unattended for a period of not less than 10 years, from the date of first discovery, or such field as the President may, from time to time, identify as a marginal field.

With each of the 161 finalists paying just for one marginal field, the government would earn N7.9 billion. The revenue will be much higher when the fees paid by applicants who did not qualify for the final stage and the signature bonuses to be paid by the successful bidders are added to it.

According to the DPR’s guidelines, applicable fees are N500,000 for registration; N2 million for application; N3 million for bid processing; $15,000 for data prying; $25,000 for data leasing; $50,000 for competent persons’ report and $25,000 for field-specific report.
“In addition to the above-listed fees, the signature bonus shall be paid by successful bidders prior to award,” the DPR said.

According to the guidelines, registration, application and processing fees are to be paid into the Treasury Single Account; the fees for data leasing, data prying, CPR and field-specific report are to be paid into the National Data Repository account, and signature bonuses to be paid into the Federation Account.


The Department of Petroleum Resources said earlier this month that 161 successful companies had been shortlisted to advance to the next and final stage of the bid round.

The head of Public Affairs, DPR, Mr Paul Osu, was reported to have said that the firms were selected from the over 600 companies that applied for pre-qualification.

”The 2020 marginal oilfield bid round process is still ongoing in line with our published timelines on DPR website and bid portal,” he was quoted as saying.
He said the DPR had put measures in place to ensure that the awardees would be credible investors with technical and financial capability.

According to the DPR, the bid round is aimed at growing production capacity by expanding the scope of participation in Nigeria’s petroleum sector, and increasing oil and gas reserves base through aggressive exploration and development effort.

Other objectives include to promote indigenous participation in the sector, thereby fostering technological transfer, and to provide opportunity to gainfully engage the pool of high level technically competent Nigerians in the sector.

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