Former minister says the China Exim-Bank rail loan was not diverted

The former Minister of Finance, Dr Ngozi Okonjo-Iweala, has described as false, the allegation that she diverted a substantial part of a one billion dollar loan from China-Exim Bank.

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The refuttal is contained in a statement issued in Abuja on Sunday by Mr Paul Nwabuikwu, Special Adviser to Okonjo-Iweala.

The Permanent Secretary, Ministry of Transport, Alhaji Mohammed Bashar, said about 600 million dollars out of the one billion dollars loan obtained from China-Exim Bank for Kano-Lagos rail project was diverted to other projects.

Okonjo-Iweala said that Goodluck Jonathan administration never obtained a loan from the China-Exim Bank for Kano-Lagos rail project.

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"The alleged diversion has no substance for the simple reason that the Kano-Lagos project was not even among the projects presented for funding by the China-Exim bank. It was the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-Exim Bank, but in the end, no funds were assigned for the Lagos-Ibadan rail project."

She said the projects covered by the China Exim-Bank loan were at different stages.

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They include "the 500 million dollars expansion of four International Airport Terminals in Lagos, Kano, Abuja and Port Harcourt. This is also the 500 million dollars Abuja Light Rail project; 984 million dollars Zungeru Hydro-electric power project and 100 million dollars Galaxy Backbone project." she said.

Okonjo-Iweala said the diversion of the fund would have been extremely difficult due the terms attached to the loan.

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Iweala said "The procedure is that funds for approved loans remain in the China-EximBank and are released directly to the Chinese firm executing the contract only after the presentation of duly certified proof of work by the responsible Ministry.In this case it would have been the Federal Ministry of Transport, based on the agreed milestones."

Adding that "For the sake of emphasis, the China-Exim Bank does not disburse money directly to government and therefore the issue of diversion does not arise."