A first
step that could cause the long awaited revolutionary shake up in
Nigeria’s antequated railways is now being taken by the federal
government, with a number of bills now before the National Assembly ,one
of which passage is primed to see the entry of the private sector in
the running, ownership and management of the railway systems.
If all goes well and the National
Assembly applies the required speed needed for this revolutionary
intervention, it will be the first time in the 117 years of the
country’s railways that this will be happening.
“ The private sector urgently needs to
get involved in the rail sector – it’s a key driver for the economy, and
the multiplier effect on the Nigerian economy will be significant.
“The government does not have, and cannot
invest the necessary cash required to optimse capacity in the rail
sector, in order for it to fulfil the logistics requirements of the
Nigerian economy – travel from down south to up north.
“ If the rail lines worked effectively,
they could move produce from the “food basket” of Nigeria, down to the
South, where there is more consumption and to the ports – which would
drive the exports of agricultural produce. It would cut the costs of
food significantly, it would reduce transport costs and this would feed
into the inflation figures , helping to reduce inflation,” said Chuka
Mordi, an investment banker and Co-Managing Director of CBO Capital, who
recently made an attempt to push investment into the sector.
Businessday understands that the National
Assembly is now considering the bill, which primary aim is to reform
the rail sector and ensure private sector participation. It seeks the repeal and re-enactment of the Act governing the Nigerian Railway Corporation.
The set of bills before the Assembly,
which target the reform of various components of the transport sector
were approved by the Federal Executive Council (FEC) mid February and
have just been transmitted to federal lawmakers. The bills had been on
the table at FEC since 2014 after they were processed by the Bureau of
Public Enterprises (BPE).
Receipt of the bills was announced on the
floor of the House of Representatives March 12, where they were
shortlisted and gazetted by the National Assembly for first reading at a
date to be fixed when the legislators return from elections recess.
The NRC bill seeks to repeal the Nigerian
Railway Corporation Act Cap N129 LFN 2004 and enact the Nigeria Railway
Authority Act, to provide for the establishment of the Nigerian Railway
Authority, the introduction of private sector participation in the
provision of rail services, the regulation of the railway sector and for
matters connected therewith.
It also provides for private operators to
own, construct and operate railway lines in tandem with the provisions
of the proposed Act, adding that the 25-year strategic vision for
Nigerian Railways may be amended from time to time.
Section 27(1) of the proposed bill
provides that “the Government of a State, Federal Capital Territory and
Local Government may, subject to the approval of the Authority,
construct Railway infrastructure for the provision of Railway Services
within its area of jurisdiction.
Section 29(1) provides that “the holder
of a Licence issued by the Authority may enter into agreements with
other persons for the provision of Railway Services and Railway
infrastructure, whether by means of a concession, joint venture,
public-private partnership or other means.
Meanwhile, poor governenment management
and funding of the rail system over the years have led to deficient
performance and erratic service delivery in the movement of goods and
commuters by train in Nigeria.
The effect has been a decline average of 89.15% in freight or cargo services and passenger traffic in the past 55 years.
Part of the problem has been attributed to the failure of government to transit from narrow gauge to standard gauge, as a result of lack of strategic funding.
This information is contained in the 2013
National Integrated Infrastructure Masterplan, produced by the National
Planning Commission and approved by the Federal Executive Council in
2014.
The contract for the modernisation of the
railway (double track) was awarded in November 2006 at a cost of $8.3
billion and no significant results have been achieved, says the report.
It further states that the abysmal drop
in the haulage locomotive and passenger movement since 1960, many years
after many countries have transited from narrow gauge to standard gauge,
has adversely affected national integration and slowed down balanced
economic development of the country.
Industry watchers say that the cost of
this failure include road congestion and disrepair across the nation, as
a result of overuse, as well as higher transportation cost for goods
and commuters because of the near absence of the cheaper rail mode of
transport.
Other fall-outs are high accident rates
and congested cities, whereas cheap and efficient rail transport is said
to encourage people to live in more affordable and peaceful satellite
towns, while working in the busy cities and commuting by train.
The report states that successive governments since the nation’s independence, have neglected the rail sector which is key to any country’s political and economic development.
It further observes that the country’s
rail infrastructure and facilities comprise of 3,505km of narrow gauge
rail line, and 827km of narrow gauge sidings and loops, 255km of
standard gauge rail line and a large quantity of rolling stock,
infrastructure, station buildings and other property investments.
Other infrastructures include a 715 km of
branch lines, 280 railway stations and 267 railway outstations,
including 353 bridges across the entire track length.
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