The Federal Government has reacted to the controversy surrounding the Memorandum of Understand, MoU, it entered with Messrs MPH Rail Development Limited, a United Kingdom, UK, firm.
The MoU which was signed by the Ministry of Transport on March 13, 2024, was for the building of the Port Harcourt–Enugu–Calabar–Abuja Standard Gauge Rail Line.
The Ministry of Transportation, in a statement issued on Sunday by the Director, Press and Public Relations of the Ministry, Olujimi Oyetomi, stressed that MoU was a non-binding agreement that states each party’s intentions to take action, conduct a business transaction, or form a new partnership
It explained further that the initiative was still at its preliminary stage.
Oyetomi noted that the clarification became imperative following comments and commentaries by certain persons, especially on social media concerning the status and implications of the MoU signed on 12th February 2024 by the minister, Senator Said Alkali with the firm
Parts of the statement read, “For clarity, a Memorandum of Understanding or MoU is a non-binding agreement that states each party’s intentions to take actions, conduct a business transaction or form a new relationship.
“It is not a legal binding agreement.
“It provides only a platform for further agreement, discussion, scrutiny and the provisions of required guarantees by the parties to reach agreement if the parties are satisfied.
“The MoU in question arose from an unsolicited proposal presented by the British African Business Alliance, BABA, an association based in the United Kingdom with interest in businesses in Africa. It’s proposal was initially submitted to the ministry on 27th August 2019.
“As required, the business, Outline Business Case was submitted to the Infrastructure Concession and Regulatory Commission, ICRC, on 8th December 2023. The major attraction of the proposal is BABA/MPH’s initiative to achieve 100% private sector funding for the project with no loans or debt to the Nigerian government or any of its agencies as captured in the Article 3.3 of the MoU.
“The regulatory Commission on 27 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”.
Messrs. 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 stake holding 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 neither did it commit the Federal government in any way.
“Article 3.3 of the MoU affirmed that BABA/MPH’s initiative is to achieve 100% private sector funding for the project ‘with no loans or debt to the Nigerian Government or any of its agencies’;
“A fundamental deliverable under the MoU is for MPH to design a funding and implementation model and submit same to the Ministry within 90 days of the MoU for further consideration and scrutiny;
