Can PPP save the Railway? on August 03, 2013 at 10:00 pm in Business By Jonah Nwokpoku Rail transport all over the world has played vital roles in public transportation. It’s most attractive advantage is the ability to move large volumes of goods and passengers to far distances. As a result, the developed economies of the world rely extensively on it. It was to meet similar objective of economic development that the government, through the 1955 Railway Act, established the Nigeria Railway Corporation, NRC, to run the railway to foster economic development through effective transportation, especially the movement of goods from the rural areas to the urban centers and vice versa. Throughout the remaining colonial days and shortly after independence, the corporation tried to meet this objective. But this was not to continue as corruption set in and crippled the sector. The corporation went into bankruptcy. By the time the administration of Sani Abacha tried to revive the sector, it had become comatose. The regime invested about $500 million, but this proved inadequate to bring the railway back. When the state transited to civil rule in 1999, former President Olusegun Obasanjo embarked on another attempt to revive the railway. His administration invested huge sums of money in the rehabilitation effort, but the trains could still not return to the tracks. When the late President Yar Adua came into power in 2007, he also pledged his administration’s commitment to the rehabilitation of the sector. His government increased budgetary allocations to the sector while his successor, President Goodluck Jonathan, is making attempts to revitalise the railway. A moving train on the 68 percent completed railway track of the Abuja – Kaduna fast train project launched by Vice President Namadi Sambo in Abuja Jonathan’s efforts saw the rehabilitation of the Lagos to Kano 1,126 km rail line that brought the trains back in December 2012. This was about thirty years after NRC grounded such major operations. But it was not long the challenges returned and poor service delivery because the order of the day. Rolling stocks were inadequate and overwhelming demand led to congestion. With inadequate manpower, the ticketing process was infiltrated by touts and journeys by the trains marred by delays and stoppages. The NRC assessed the situation and came to the reality that the resources overcome the challenges are huge for government alone to provide. Managing Director of NRC, Engr. Adeseyi Sijuade, alluded to this when he said the authorities had come to the realization that the corporation could no longer cope with the challenge of transforming the sector alone, especially as it targets a 25-year strategic goal of making the NRC a world-class transport organisation providing safe, efficient, affordable, reliable, widely linked network and customer oriented service. He said the corporation was therefore proposing a public, private partnership for the railway. At the launch of this initiative in Lagos, Sijuade said, “It has dawned on us that NRC alone can no longer handle the enormous challenge of revolutionising the sector, having suffered long years of neglect. So it has become expedient to involve the private sector if we ever intend to meet our objective of attaining a world-class rail service.” “Our strategic direction now is PPP as the way forward. We have reached a point where it has become so glaring that primary funding from government alone cannot take us to where we need to be,” he added. Under this new arrangement, private individuals will be granted access to run some of the vital aspects of the railway while the corporation retains its regulatory power over facilities and the activities of the private operators. Already, the corporation is outsourcing some of its services like on- board cleaning, cleaning of major train stations and on- board catering. It has also commenced the procurement process for selecting potential logistics service providers in the areas of design, building, operation, and transfer, DBMOT of warehousing to provide suitable, safe and secure storage space for goods; finance, supply and operation of modern facilities and provision of services for loading and offloading of goods; finance, supply in joint management with NRC, railway coaches to enhance freight haulage capacity. The corporation is also considering concessioning. The corporation has finalized the presentation of OBC for Western and Eastern lines concessions and is moving to the next stage of selecting transaction advisor. The implication of this initiative, according to the NRC boss, “is that the authorities are opening railway arms for investors in the sector while awaiting the approval of the new railway bill that will broaden the scope of the PPP initiative and make for the total transformation of the sector.” But will the PPP really save the Nigeria Railway?, Olubodun Kolawale, an industrialist and Managing Director, Golden Kay Ventures, says, “Yes, it is a welcome development. This is what we have been agitating for because there is no way we would ever hope to achieve efficient rail service in Nigeria without involving the private sector. On his part, Mustapha Abdulazeez, an electrical engineer with Aminu Kano Teaching Hospital, says the initiative would solve a lot of service delivery issues having traveled through the railway upon rehabilitation and had rough experience. “I believe this initiative would save the railway. The arrangement would help to solve lots of service delivery issues. Governments especially in Nigeria have never got it right when it comes to the management of such ventures. And you can imagine the economic boom we shall see in that sector if this arrangement is given a chance. It will be like what we currently have in the telecommunication sector,” he adds. Okechukwu Ezeanya, a business man, believes the initiative is good but expresses concern about the transparency of its execution. “This is the wisest decision ever taken by any government agency. But I want them to make the process transparent so that the objective would see the light of day”. Further explaining the rationale behind the decision, Sijuade notes, “Right now, wise government ministries, agencies and corporations are channeling their energy towards private sector participation and, to me, we are ripe enough for that. “NRC has a 25-year strategic plan of system transition and modernization. With this plan, we expect the railway to stabilize by 2017. We want to make rail a major mover of freights in this country and link all International airports, seaports and inland container depots to the rail network”. This course of action may be the last option for the transformation of the rail sector but successful implementation requires support from government and all Nigerians in order to achieve the goal of an efficient and globally competitive railway service.
Posted on: Sat, 03 Aug 2013 22:38:21 +0000
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