A new vista is on the horizon for railway services in Nigeria. This is after President Muhammadu Buhari opened the 186-kilometre standard gauge Abuja-Kaduna train service, thus introducing the country to modern railway services. The project saw the light of day last week when the China Civil Engineering Construction Corporation delivered the $1.46 billion package. It is an exciting development, but the challenge is in its sustenance and building more of such projects across the country.
Although the country started railway operations with the construction of the 193km Lagos-Ibadan line in 1898, rail transport in Nigeria is steeped in decay and lack of investment. The operations of the Nigerian Railway Corporation were thriving up till the 1960s, with the organisation ferrying 11,288,000 passengers and 2,960,000 tonnes of freight in 1964. The failure to improve on infrastructure was costly as, a decade later, the figures dipped considerably to 4,342,000 and 1,098,000 for passengers and freight respectively.
The journey to modernisation has been arduous. Noticing the downhill trend, the Olusegun Obasanjo military regime attempted some reforms in the late 1970s with technical input from India. But the NRC relapsed to its old ways after Obasanjo’s exit in 1979. When the late military Head of State, Sani Abacha, took cognisance of the deplorable situation, he attempted to bring national railway operations up-to-date by signing a $528 million contract with the CCECC in 1995. Among other things, the CCECC was to rehabilitate infrastructure, supply locomotives and train key NRC personnel.
Obviously, the project stalled amid allegations of corruption and incompetence. Since then, other administrations – military and civilian – have attempted to complete the project, all to no avail. But the Goodluck Jonathan administration brought the Abuja-Kaduna project to an advanced stage, which Buhari duly completed. The Buhari signature statement could be an era of standard gauge system, as against the narrow gauge that constricts modern operations. Buhari has pledged to link all state capitals and commercial centres by rail, to bring about swift economic development and ease transportation pains. This is a worthwhile mission.
He pledged, “I wish to also reassure Nigerians that due attention will be placed on pursuing the 25-year Strategic Railway Master Plan, which is aimed at rehabilitating the existing 3,505km narrow gauge rail line and developing and constructing new standard gauge lines across the country.” This is noble. In line with this, the Lagos-Calabar coastal rail line, which received an allocation of N50 billion, is one of the major infrastructure projects included in the 2016 Appropriation Act. The Ministry of Transport is also planning to construct the Lagos-Ibadan rail line in two years.
But in a country whose 2016 budget of N6.06 trillion has a capital component of only 30 per cent, the 25-year strategic development plan faces major difficulties, especially that of funding. The Lagos-Calabar project, scheduled to be completed within two years, will cost $11.11 billion. According to the government’s agreement with the CCECC, Nigeria’s counterpart funding is just 15 per cent. How will the government, reeling from the grievous impact of the crash in the price of crude oil, and unable to meet its financial obligations, undertake all these capital-intensive projects alone? The truth is that Abuja does not have enough money to throw around anymore.
To achieve its aims, therefore, the Federal Government should cast its net wide and look at other options, especially privatisation and liberalisation. The bitter truth is that rail transport in Nigeria is suffering from the government’s failure to liberalise. Apparently, it is hampered by the Railways Act 1955, which vests power to run railways solely in the Federal Government. It is noteworthy that the Senate has just amended that law. The Federal Government should quickly work with the House of Representatives to also pass and harmonise the law to allow private investors in the railway sector. This will encourage competition. It is a better way of attracting foreign capital and technical expertise, generating income and employment.
Britain, which pioneered rail transport in the 1820s, is reaping the dividends of privatisation after its radical decision in 1994 to privatise the government monopoly, British Rail. The franchising model that has developed now has more than 20 separate private companies running the rail system, according to the Association of Train Operating Companies. A boost in investments by private operators has rekindled real development. “The construction of high-speed rail has resulted in a dramatic decline of short haul flights and automotive traffic between connected cities…,” an ATOC survey said.
Other benefits of franchising in Britain include more revenue generation, passenger growth and satisfaction. For instance, passenger revenue has risen by £3.2 billion from 1997-98 to date, while the government was able to reinvest an extra £1.3 billion in 2011-12, from the £400 million it invested in 1997-98 as a result of privatisation. There are other associated benefits, including freeing up funds for the government to invest in social services.
Every industrial economy thrives on rail transport. Japan, China and the United States, among other countries, have modern rail systems that move passengers and heavy duty goods. Most of Europe is interlinked by a network of rail systems. For Nigeria to realise its dreams of industrialisation and job creation, the government must think radically and implement strategic policy initiatives that will unhinge our obsolete system. Instead of doing it all alone, the Buhari administration should chart a fresh course that will accommodate private capital, essentially from abroad, through privatisation.
