Unbundling Nigerian railway corporation for rail sector reform

BY AUGUSTINE SALIFU

The Nigerian Railway Corporation (NRC) was established by the Nigerian Railway Corporation Act, CAP N129, Laws of the Federation of Nigeria 2004 in 1955 to facilitate the operation of an effective rail system for the carriage of passengers and goods across the country.

The objective of the corporation is to provide an alternative road transport system that is affordable and cost-effective, operating with a high sense of professionalism to contribute towards economic development and ease of doing business through the conveyance of goods and services at affordable rates with guaranteed public safety.

After the enactment of the Act in 1955, it was amended in 1958 to strengthen its contents towards an effective operation to ensure sustainable outcomes at the time the colonial regime was strengthening laws and institutions as part of careful arrangements to hand over power to a democratically elected government.

Despite the effort to ensure an effective legal regime to regulate NRC operations, the Act could not meet such expectations given its archaic nature, obsolete provisions, and over-concentration of powers in a corporation that is long overdue for unbundling to enable it utilise its potentials for economic development and be in tune with current economic realities.

The corporation also faces financial, logistic and operational challenges which affect its operations, visibility and contribution to the economy. This article appraises the current state of affairs in the Nigerian Railway Corporation and shares knowledge of ongoing rail sector reforms at the inception of the Tinubu Administration.

From the verified records, the Minister of Transportation, Sen. Said Ahmed Alkali, about three weeks after he assumed office, commenced the reform with a familiarization/inspection tour of the Nigerian Railway Headquarters in Lagos and railway modernization projects including Lagos-Ibadan, Abuja-Kaduna-Kano, Kano-Maradi, with extension to Dutse, Federal University of Transportation Daura and the Eastern Narrow Gauge, Port-Harcourt to Maiduguri.

Alkali interacted with the management of the NRC and construction companies to identify the areas that require intervention. The minister ordered the completion of the Bola Ahmed Tinubu Train Station within three weeks and expansion of assembling of containers at the Rail Wagon Assembly Plant at Kajola to make the transfer of technology a reality. NRC Managing Director, Engr. Fidet Okhiria was directed to train the staff for effective management after projects are completed.

Also, the leadership of the corporation was instructed to rehabilitate the old Narrow Gauge from Lagos to Kano for passengers and freight within three months from the last familiarization visit. That has been completed and is ready for operation any moment from now. This development will ease difficulties in the conveyance of containers to boost economic activities.

The construction of Lagos – Ibadan Standard Gauge of 156.5km with the extension of 6.5km to Lagos Port Complex at Apapa with 10 Railway Stations has been completed and in use. Also, the Abuja–Kaduna Standard Gauge of 186.5km with 9 Railway Stations has been completed and in use, same as Warri-Itakpe of 317.12km Standard Gauge.

Ongoing constructions include Kaduna-Kano, Kano-Maradi of 387km Standard Gauge with extension to Dutse in Jigawa State; Port Harcourt-Maiduguri, Eastern Narrow Gauge of 2044.1km covering Port Harcourt to Maiduguri; Bonny Deep Sea Port; Port Harcourt Industrial Park; Narrow Gauge branch line to Yobe State from Goniri to Gashua, 216km; Elelenwa-Ubima-Owerri-Onne to Bonny, 150.1km, and Onne Port Station. The progress report indicates the commitment of the contractors whose counterpart fund is anxiously awaited.

In addition to these projects which the Ministry and the Federal Government are passionate about completing, a number of other rail modernization projects that cut across the coastal and central states are about to start. The Minister has directed the Port Harcourt-Aba Rail Line contractor to ensure completion before the end of the first quarter of 2024.

Information, however, reveals a major funding challenge which prevents the contractor, CCECC, from commencing the Central and Coastal Rail Lines. Our investigation showed that the ministerial initiative for speedy execution of rail projects seeks funds for the completion of Rolling Stock Projects; it involves contracts for the design, manufacture, installation, commissioning of rolling stock, supply of spare parts and maintenance of equipment for ongoing projects.

The Federal Government, in collaboration with the private sector, is initiating more new projects from Lekki Deep Sea Port to Ijebu-Ode to Kajola, Badagry to Tincan, Port-Harcourt to Abuja and a Bullet Train (High Speed Rail) Integrated Project to collectively support the realisation of the Renewed Hope Agenda aimed at ensuring affordability, operational efficiency and public safety in Nigeria’s rail transport system.

The Ministry is also facilitating the establishment of the National Road Transport Data Bank through a Private Public Partnership financed by Africa-Asia Investment Limited to promote direct foreign investment. The project will create over 20,000 jobs, enhance public safety on highways through vehicle identification/tracking and transform the national mobility infrastructure in consonance with international best practices.

The Ministry is collaborating with foreign investors such as Messrs Eco-transit Solutions, a Qatar-based company, to cushion the effect of fuel subsidy removal through Compressed Natural Gas (CNG) vehicles, using the latest emerging technologies. This intervention will ease public inter-state transport and revive the Federal Urban Mass Transit Scheme as CNG vehicles are designed to be eco-friendly, cost-effective and efficient.

After taking stock of activities within the Ministry and its agencies, the Minister is set to lead the conduct of the first National Council of Transportation under his leadership to rob minds with State Commissioners of Transportation to discuss emerging developments that will strengthen the transport sector towards effective implementation of its component in the Renewed Hope Agenda of the Tinubu Administration.

Following the evaluation of the activities initiated by the Ministry in discharging supervisory role over its agencies, it is significant to highlight the recent operational development by the NRC to provide alternative data of benchmarking its contribution in stimulating economic development and what lessons could be learnt to suggest further measures of corporate reconstruction to maximise its huge unexhausted potentials now and in future.

Notwithstanding the challenges, the corporation is deeply involved in transporting both passengers and goods across the country. The routes for Lagos-Ibadan, Abuja–Kaduna and Warri-Itakpe Standard Gauge are operationally functional for the carriage of passengers and goods easing a lot of difficulties faced by passengers on the highway particularly given the baffling security situation.

Further, the NRC is actively discharging freight of containers from APTM Lagos to Ibadan regularly. From September 2023, after the Minister’s commissioning of the container evacuation to decongest the port, 2,737 containers have been transported to Ibadan. In a short while, the freight of containers will be extended to Kano given the recent rehabilitation of the Narrow Gauge Rail Line from Ibadan to Kano expected to be operational soon.

Apart from that, the NRC is involved in the freight of cement from La-farge cement factory at Ewekoro in Ogun State to Ibadan where the same could be further transported to the North through the recently rehabilitated old Narrow Gauge. It was discovered that from March 2023 to January 2024, 52,890 tons of cement had been transported to Ibadan.

Also, the NRC contributes towards efficient freight of gas pipes for the National Gas Project from Ajaokuta-Warri to Itakpe with a high sense of cost-effectiveness and security of the gas pipes in transit. Currently, the corporation is partnering with the Plateau State Rail Mass Transit working on the track and the coaches to make the Jos-Abuja route operational before the end of the first quarter of 2024.

In recognition of the Tinubu Administration’s inclusion of transportation as a major component of the Renewed Hope Agenda, the Ministry is called to revisit the recommendations of the 14-member NRC Unbundling Committee set up in 2021. The team urged the government to: develop a strategic plan for NRC unbundling; create opportunities for private sector engagement to reduce government involvement in railway operations, and ensure the provision of efficient, affordable and secure service.

The Ministry has initiated a Bill for consideration and passage into law by the National Assembly. It proposes new entities under the unbundled NRC: National Railway Agency, National Railway Carrier and Railway Assets Management Company. It is expected that the initiative will put to rest the much-criticised old Act that suffers obsoleteness, defective content and inadequate provisions that foreclose the window for private sector participation.

Salifu is executive director, coalition for transparency and integrity watch