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Financials

REFILE-UPDATE 1-Chinese company wins $1.85 bln contract for railway in troubled Nigerian state

(Refiles to add dropped letter to ‘troubled’ in headline)

HONG KONG, Aug 29 (Reuters) - China’s state-owned railway construction firm has been awarded a $1.85 billion contract to build a light railway line in the northern Nigerian state of Kano, it said on Monday.

Growth in Nigeria - an OPEC member whose economy, the largest in Africa, has been hammered by low oil prices - has been stunted for decades by a lack of investment in the road and rail network.

Development efforts have also been hampered by Islamist militant group Boko Haram, which has carried out bomb attacks on targets in northern Nigeria, including Kano state, during its seven-year insurgency.

Finance Minister Kemi Adeosun said earlier this month that 60 billion naira ($180 million) in additional spending would be allocated for capital projects as part of the 2016 budget to boost the economy.

Adeosun said Nigeria would tap partnerships with the private sector to boost investment and the government was also in talks with General Electric to develop and operate rail services to improve transport for goods.

China Railway Construction Corporation Ltd issued a statement saying two of its subsidiaries had been provisionally awarded the light railway project in Kano.

“The contract amount of the project is approximately $1.851 billion, accounting for approximately 2 percent of the operating revenue of the company for the year 2015,” it said in the statement, issued to the Hong Kong stock exchange.

The contract is for four lines, totalling 74 km (46 miles) and capable of carrying trains travelling at a top speed of 100 km per hour.

“This award is subject to the fulfilment to all conditions spelled out in the letter of intent from the financing bank and the final approval by the presidency of Nigeria,” it said. A spokesman for the president declined to comment.

A government source said contracts of this nature are usually passed to the cabinet for approval.

The company said it expected the first and second phases of construction to each last for two years, but did not give details of when work was expected to start if approved. (Reporting by Meg Shen; Additional reporting by Felix Onuah in Abuja; Writing by Alexis Akwagyiram; Editing by Chijioke Ohuocha/Ruth Pitchford)

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