In keeping with Nigeria’s
colonial railway heritage, it is not surprising that the Minister of
Transportation, Rotimi Amaechi, has invoked a plan to revive rail
transportation.....
The headline announcement is that the Federal Government
would spend $16 billion in “modernising rail and ports infrastructure”
across the country. The minister’s intention appears justified in the
light of Nigeria’s crude railway system, but, on closer scrutiny, it
looks like a mere political statement that is not likely to achieve
anything tangible.
Essentially, the government
plans to link some parts of the country through a rail network and had
earlier committed itself to two key projects at a cost of $20 billion.
They are the 1,100-kilometre freight and passenger line between Lagos
and Kano, and the Lagos-Calabar line. On October 10, the Nigerian
Railway Corporation stated that it would complete the first leg of the
Lagos-Kano rail spanning Lagos and Ibadan by December 2018, though the
laying of tracks has yet to commence. The project is estimated to cost
N458 billion.
A deeper look, however, shows
that Amaechi’s plan is not based on any sound financials. With the
economy asphyxiating from low oil prices, a bogus public recurrent
expenditure, mounting debts and frail buffers, the Muhammadu Buhari
administration might not be able to stump up the requisite funds for the
rail modernisation. Amaechi himself admitted this, saying: “There are
approvals for our sector but we have to look for the money because the
money is not just there.” How true!
Yes, a modern railway system is a
sine qua non for a buoyant economy. Because of this unassailable
economic reality, the government ought to have a clear focus in the rail
sector. What is needed is a holistic reform of the sector. India, for
instance, has just launched an ambitious High Speed Rail programme at a
cost of $142 billion over a five-year period. Delhi plans to double this
in the next five-year cycle. It has sourced funds from the Japan
International Cooperation Agency, the World Bank and private investors
from the United States, and has privatised several aspects of its rail
sector, the world’s fifth largest. This is the way to go.
Therefore, Amaechi’s approach is
faulty. The minister and President Muhammadu Buhari should stop giving
the impression that the Nigerian government has the ability to generate
the funds needed to execute the project. Amaechi’s mistake was made by
his predecessors, with a N50 billion programme and another $8.3 billion
plan; the one delivering little and the latter aborted. Even the United
Kingdom with a modern rail system is still opening up the rail market to
attract private capital. A poll by Eurobarometer, a European Commission
agency, found that following the privatisation of British Rail in the
1990s, service satisfaction of the United Kingdom rail users climbed to
the second highest in Europe (behind Finland) at 78 per cent. A study by
the British rail regulators adds that since privatisation, rail
journeys increased by 117 per cent in 2014 and the number of passengers
more than doubled. “On the balance, rail privatisation has been a huge
success,” The Guardian of London said in 2013.
Yet, the British government is
not satisfied. Realising that Network Rail, the public rail company, is
lagging behind, the British Ministry of Transport intends to fully
privatise a new high-speed line between Oxford and Cambridge. “What we
are doing is taking this line out of Network Rail’s control,” Chris
Grayling, the British transport minister, said. “Network Rail has got a
huge number of projects to deliver at the moment … I want it to happen
quicker. This is an essential corridor for this country. On that route,
we are going to bring in private finance, in a form to be decided.”
Nigeria’s rail system needs huge
private capital investment. This should be the crux of the rail
modernisation plan: attracting foreign direct investment. By opening up
the rail sector, the Buhari government can achieve a lot. The statist
approach being employed inhibits radical modernisation. Closer home, a
new 752km HSR line between Ethiopia and Djibouti is having a significant
impact on the economies of both countries. The authorities said the
railway could reach a speed of 120km/h (cargo trains) and 160km/h
(passenger trains), cutting journey times between the two destinations
from three days by road to 12 hours.
Unfortunately, this is not the
case in Nigeria. The fastest passenger train between Abuja and Kaduna
moves at 90km/h although the NRC, after taking delivery of two new
Chinese-built coaches in July, announced that it would increase the
speed to 130km/h. The other trains are much slower, including the
Lagos-Kano train that takes three days or more. In all, Nigeria’s rail
network stands at 3,505km, with much of it in narrow gauge, in what has
become a stone-age technology, going by global developments. This is a
depressing situation, considering the huge potential of railway to boost
transportation, tourism, employment and reduce the carnage and gridlock
on our dilapidated roads.
To achieve the modernisation
target, the Federal Government should entrench innovative ideas by
opening up the sector: global rail companies are willing to partner
governments to revamp the rail network. First, the executive should work
with the National Assembly to repeal the Railway Act (1955), the law
that vests sole ownership of railway in the Federal Government. That law
is an encumbrance that must go. In its place, a fresh one that will
liberalise and accommodate private sector participation should be
enacted expeditiously.
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