Nigeria's passenger and freight railway system was mainly built by British colonial rulers before independence in 1960
Nigeria needs more time to negotiate a railway concession project with U.S. company General Electric, the transport minister said on Wednesday.
Both sides have confirmed talks on GE being granted a railway concession in the OPEC member worth around $2 billion.. Nigeria's economic growth has been hampered for decades by the lack of roads or functioning railways.
The government, suffering from a slump in revenue from crude exports, wants to boost exports of food and other non-oil products.
"GE is proposing a two-year rehabilitation of the rail tracks to be carried out by them and to have a concession period of 25 years within which to recover their investment," Transport Minister Rotimi Amaechi told reporters on Wednesday.
"The government has not agreed and that is what our advisers will sit with GE to agree," he said.
The West African country has already signed two deals worth around $5 billion with China Civil Engineering Construction Corp (CCECC), part of China's state-owned railway construction firm, to modernise and build railways in the north and south, the transport ministry said last month.
Africa Finance Corporation and Greenwich Financial Advisors will assist the government in the talks on the railway concession.
Nigeria's passenger and freight railway system was mainly built by British colonial rulers before independence in 1960.
A GE spokeswoman, Patricia Obozuwa, said the government had formally notified GE that it was "initiating a competitive procurement process" following the expression of interest.
She said the process was "to award a concession for the rehabilitation, financing and operation of the narrow gauge railway system" on lines connecting southwestern megacity Lagos with Kano, in the north, and another linking southern oil hub Port Harcourt with Maiduguri, in the northeast.
"This procurement process is still ongoing and as such we are not at liberty to disclose full details at the moment," she added.