The ministry’s Director, Press and Public Relations, Olujimi Oyetomi on Sunday, explained that the MoU signed on 12th February 2024 by the Minister of Transportation, Senator Said Alkali on behalf of the Ministry, was to provide a platform for further discussion between parties to ascertain the possibility of executing the project or otherwise.

A statement by the ministry’s Director, Press and Public Relations, Olujimi Oyetomi on Sunday, explained that the MoU signed on 12th February 2024 by the Minister of Transportation, Senator Said Alkali on behalf of the Ministry, was 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,” the statement read in part.

See full statement below:

“The attention of the Federal Ministry of Transportation (FMT) has been drawn to emerging comments and commentaries by certain persons (especially on social media) concerning the status and implications of the Memorandum of Understanding (MoU) signed on 12th February 2024 by the Honourable Minister of Transportation (HMT), Senator Said Ahmed Alkali on behalf of the Ministry with Messrs. MPH Rail Development (UK) Limited, a United Kingdom-registered company with Nigerian and foreign shareholding.

“For clarity, a memorandum of understanding, or MOU, is a non-binding agreement that states each party’s intentions to take action, conduct a business transaction, or form a new partnership.  It is not a legally binding agreement. It provides only a platform for further engagement, discussion, scrutiny, and the provision of required guarantees by the parties to reach an 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 an interest in business in Africa. Its proposal was initially submitted to the Ministry on 27th August 2019. As required, the proposal (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 Article 3.3 of the MoU. The Regulatory Commission on 27th December, 2023 approved 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 stakeholding by parties to the project at the investment stage.

“For the avoidance of doubt, the following are the major terms of the MoU: