FG Clarifies Non-Binding Nature of MoU with UK Firm for Rail Project
Written by Deborah Oyinloye on March 18, 2024
The Federal Government has moved to address concerns surrounding the recent Memorandum of Understanding (MoU) signed between the Ministry of Transportation and MPH Rail Development Limited, a United Kingdom-based construction firm, stressing that the agreement is not legally binding.
Recent reports have sparked controversy over the MoU, with some questioning the legitimacy of the partnership, particularly as the company involved, MPH Rail Development Limited, was established relatively recently.
The MoU aims to facilitate the implementation of the Port Harcourt–Enugu–Calabar–Abuja Standard Gauge Rail Line project under a public-private partnership framework, with the UK company overseeing various aspects of the project’s development.
In response to the public discourse, the Ministry of Transportation issued a statement providing clarity on the matter. According to the ministry, an MoU serves as a non-binding agreement that outlines the intentions of the parties involved and provides a platform for further discussions and scrutiny.
The MoU stemmed from an unsolicited proposal presented by the British African Business Alliance (BABA), which garnered interest from the ministry due to its innovative approach to securing private sector funding for the project without burdening the Nigerian government with loans or debt.
It is emphasized that MPH Rail Development (UK) serves as the Special Purpose Vehicle (SPV) incorporated by BABA to execute the project. Such SPVs are typically newly established entities with nominal shareholding to facilitate stakeholding during the initial investment phase.
The ministry outlined a series of requirements that MPH must fulfil within a specified timeframe, including securing commitments from potential financiers and submitting comprehensive reports on various aspects of the project.
The statement reaffirmed the government’s commitment to ensuring transparency and due diligence in the evaluation of the proposal, with the Infrastructure Concession and Regulatory Commission overseeing the process.
In conclusion, the ministry assured Nigerians of its dedication to delivering an economically viable and sustainable transportation infrastructure in line with its legislative responsibilities.
Author: Deborah Oyinloye
With an interest in media, Deborah aims to impart the lives of people positively.
