Tinubu Govt Clarifies Rail Line MoU With UK Firm

Tinubu Govt Clarifies Rail Line MoU With UK Firm

The Federal Government has clarified the Memorandum of Understanding (MoU) signed between the Ministry of Transportation and MPH Rail Development Limited, a construction firm based in the United Kingdom (UK).

Naloaded News earlier reported that the ministry announced that it signed an MoU with the UK firm to design, construct, operate, and transfer the Port Harcourt-Enugu-Calabar-Abuja single-gauge rail line as a public-private partnership.

However, some Nigerians took to social media over the weekend to criticise the ministry for signing an MoU with a company whose construction history is unknown.

But on Sunday, the ministry clarified the issue in a statement signed by its spokesman, Olujimi Oyetomi, revealing that the MoU is still in its preliminary stage.

The ministry stated that the agreement is meant to provide a platform for further discussion between parties to ascertain whether the project can be executed.

It also urged the public to dismiss the insinuations cast on the said MoU, noting that it is neither a legal agreement nor a binding commitment on the federal government.

The statement reads, “MOU is a non-binding agreement that states each party’s intentions to take action, conduct a business transaction, or form a new partnership.

“It is not a legally binding agreement. It provides only a platform for further engagement, discussion, scrutiny, and the provision of required guarantees by the parties to reach an agreement if the parties are satisfied.

“The MoU in question arose from an unsolicited proposal presented by the British African Business Alliance (BABA), a UK-based association interested in business in Africa.

“Its proposal was initially submitted to the ministry on 27 August 2019. As required, the proposal (outline business case) was submitted to the Infrastructure Concession and Regulatory Commission (ICRC) on 8 December 2023.

Speaking further, Oyetomi said the major attraction of the proposal is BABA and MPH’s initiative is to achieve 100 per cent private sector funding for the project.

It said the funding of the project will be done with no loans or debt to the Nigerian government or any of its agencies”, as captured in Article 3.3 of the MoU.

It, therefore, assured Nigerians that it is committed to discharging its statutory mandate and delivering efficient, affordable, and sustainable transport infrastructure for the country with utmost diligence and fidelity.

The statement added: “The regulatory commission on 27th December 2023 granted approval 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.

“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.”

On the agreement, the ministry said a fundamental deliverable is for MPH to design a funding and implementation model and submit the same to the ministry within 90 days of the MoU for further consideration and scrutiny.

“MPH will equally submit its Programme of Action within the above-stated 90-day period to demonstrate its achievement of all the preconditions highlighted by ICRC before further engagement with the government,” the ministry said.

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.”

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