Landmark signing to build 1,402 km line is largest ever overseas contract

China Railway Construction Corp said on Thursday that it has signed an agreement with the Nigerian government for a $11.97 billion coastal railway line in the African nation.

The rail construction contractor said it is China's single largest overseas contract project till date.

Nigeria's Transport Minister, Idris Umar, signed the contract with CRCC officials in the capital city of Abuja on Thursday.

The coastal railway will link Nigeria's economic capital Lagos in the west with Calabar, the capital of the country's Cross River state in the east. Trains will travel at a top speed of 120 kilometers per hour.

Meng Fengchao, chairman of CRCC, said the project will use Chinese technology standards and result in equipment exports of about $4 billion, such as construction machinery, trains and steel products.

"The project will also create 200,000 local jobs, directly or indirectly," said Meng. "Up to 30,000 job posts will be available after the railway becomes operational."

The rail will have 22 stops and stretch for 1,402 kilometers. It will cover 10 Nigerian states and the Niger Delta, the country's main oil producing region

Han Hongcai, deputy director of the department for Asian, African and Latin American affairs at the Chinese People's Institute of Foreign Affairs, said: "Most of the Nigerian states have big populations, and the local economy is developed enough to trigger more demand for railroads, goods, logistics services, machinery and construction materials."

Han said the project will to some extent ease the economic losses arising out of the Ebola epidemic and encourage people to work on rejuvenating the local economy.

CRCC signed a framework contract with the Nigerian Ministry of Transport in May with an initial contract value of $13.1 billion to build the railroad. The contract value was adjusted to $11.97 billion after the Nigerian government modified the design scheme.

The Chinese company has a presence in 77 countries and regions and has acquired orders worth 114.7 billion yuan ($18.69 billion) during the first three quarters of this year. That represents a 244 percent year-on-year growth over the same period a year ago.

CRCC President Zhang Zongyan said the company would undertake further studies to develop the railway in a green and efficient manner.

"Unlike other African countries with weak industrial foundation, construction materials do not have to be shipped to Nigeria from China during the construction phases," said Zhang.

Chinese companies can purchase the materials they need from local suppliers as both Nigeria's light and heavy industries have grown rapidly during the past three decades, boosted by its oil industry.

As many countries have plans to build modern railways to further integrate the regional economy, Chinese rail construction project providers such as CRCC and China Railway Group are also keeping a close eye on other big ticket contracts in other parts of the world.

The government of Thailand this month approved a plan for China to invest in an 867-km dual-track rail. The project connecting northeast Thailand's Nong Khai province, capital Bangkok and eastern Rayong province will be developed through a government-to-government contract.

zhongnan@chinadaily.com.cn