KPMG Report: $13bn High Speed Rail to Save Nigeria Road Maintenance Cost


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A high speed rail line

  $20bn Trans-Sahara gas project to Africa and Europe to diversify supply
Obinna Chima
Nigeria’s ongoing $13 billion high speed rail project that is expected to transverse 10 states in the country will help remove heavy freight from the country’s stressed roads and enable government save millions it spends on road maintenance, a report has stated.
Also, the report pointed out that if built, the $20 billion trans-Saharan natural gas project would be one of the world’s most expensive energy export programs, adding that it would provide a critical link between resource-rich areas in Africa and attractive markets in Western Europe.
KPMG, a global professional services firm, listed these two projects in its latest report titled: “Infrastructure 100 World Market Report.”
The report showcased 100 projects that embody the spirit of infrastructure, development, and private finance in four distinctly different markets across the globe.
The China Railway Construction Corporation Limited and the federal government had in the first half of this year signed a contract for the high speed rail network that connect Lagos, Kano, Kaduna, Warri, Bauchi, Abuja and Port Harcourt.
The length of the railway line would be 1,385 kilometres in one-way mileage and a design speed of 120 km/h, including 22 railway stations which would be constructed along the line.
Financing for Nigeria’s massive new US$13 billion High Speed Rail network is primarily in the form of a loan from China’s Export Import Bank.
The KPMG report explained: “The China Railway Construction Corporation is set to build the 3,218 kilometer network, which will be a major boost to the economy, connecting Lagos, Kano, Kaduna, Warri, Bauchi, Abuja, and Port Harcourt. The system will be digitally operated using fiber-optic cables, radio communication and wireless services.
“Judges appreciated that the project, which will remove heavy freight from Nigeria’s stressed roads, could save the country millions on road maintenance.”
Also commenting further on the $20 billion trans-Saharan natural gas project, it stated that the pipeline would help Europe diversify supply by transporting natural gas from Nigeria, through Niger to Algeria and then northwards to Spain and Europe.
“The Nigerian National Petroleum Corporation (NNPC) and Sonatrach of Algeria will hold 90 percent shares of the equity of the project, with the national oil company of Niger taking the remaining 10 per cent.
“However, the project might benefit from having an additional international partner with cross-border pipeline experience. Gazprom wisely decided to partner with several European energy companies to deliver the twin Nord Stream gas pipelines between Russia and Germany via the Baltic Sea.
“While this arrangement provided some additional financial support, it had a greater benefit securing international expertise and political consensus through the impacting jurisdictions,” it added.
KPMG expressed optimism about that 100 ongoing infrastructure projects it had identified in various markets across the world.
“We see optimism. We see social impact. We see economic value. We see a better world supported by projects that are desperately needed, those that are opportunistic, and others that are truly visionary.
“Many of the 100 projects across different global markets listed in this publication are a delicate balance of all three traits.
“Some projects are operational; others are under construction or in the latter stages of development. Yet for those that are still only designs and dreams, where should society focus – on necessity or opportunity?” it stated.