Unbundling Nigerian Railways Corporation for Rail Sector Reform

Unbundling Nigerian Railways Corporation for Rail Sector Reform
By Augustine A. 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 and efficiency.

The rail system has been identified as a major form of transport that enhances economic development given its safety, affordability, revenue generation potentialities, geographical spread and welfare component in accommodating the interest of the rich, the poorer and the stranded.

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 busy strengthening laws and institutions as part of careful arrangements to hand over power to a democratically elected indigenous government.

Despite the effort to ensure the bequest of an effective legal regime to regulate the operations of the Corporation, the Nigerian Railway Corporation Act could not meet such expectations given its archaic nature, obsolete provisions, over-concentration of powers in a Corporation that is long overdue for unbundling to achieve the cherished objective of utilising its potentials for economic development and compelling desire to be in tune with current economic realities, which at the moment, the Act is struggling to cope with.

In addition to the foregoing paucity associated with the legal regime, the Corporation faces financial, logistic and operational challenges which affect its operations, visibility and contribution to economic development.

The objective of this exercise is to appraise the current state of affairs in the Nigerian Railway Corporation and share knowledge of ongoing rail sector reforms at the inception of the Tinubu-led administration.

From the verified records available at our disposal, the new Minister of Transportation, Sen. Said Ahmed Alkali, commenced the reform initiative  by undertaking a familiarization/inspection tour of the Nigerian Railway Headquarters, Lagos, various railway modernization projects which include: Lagos-Ibadan, Abuja-Kaduna-Kano, Kano-Maradi with extension to Dutse, Federal University of Transportation Daura and the Eastern Narrow Guage, Port-Harcourt to Maiduguri about three weeks after assumption of office.

The tour was undertaken to familiarize the Minister with the latest developments on the ongoing railway modernization projects across the country and interact with the management of the Nigerian Railway Corporation and managing team of constructing companies to identify challenges and areas that require the intervention of the Ministry to enhance efficient service delivery.

Major resolutions made during the familiarization visit include a ministerial directive to complete and operate the Asiwaju Bola Ahmed Tinubu Train Station within 3 weeks from the date of such visit, expansion of assembling of containers at the Rail Wagon Assembly Plant at Kajola to make the realization of objectives of transfer of technology a reality, while the Managing Director of Nigerian Railway Corporation, Engr. Fidet Okhiria was directed to train the staff of the corporation to facilitate effective management after handing over the project on completion.

Also, the Nigerian Railway Corporation has been directed to rehabilitate the old Narrow Gauge from Lagos to Kano for passengers and freight within 3 months from the last familiarization visit which 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.

At the moment, 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 put into use. Also, the Abuja–Kaduna Standard Gauge of 186.5km with 9 Railway Stations has been completed and put into use as well as Warri-Itakpe of 317.12km Standard Gauge.

On the other hand, the Kaduna-Kano, Kano-Maradi of 387km Standard Gauge with extension to Dutse in Jigawa state and Port Harcourt-Maiduguri, Eastern Narrow Gauge of 2044.1km covering Port Harcourt to Maiduguri, Bonny Deep Sea Port, Port Harcourt Industrial Park Projects, Construction of the new Narrow Gauge branch line to Yobe state from Goniri to Gashua 216km and 150.1km from Elelenwa-Ubima-Owerri-Onne to Bonny including the construction of Onne Port Station is ongoing with an impressive progress report that indicates an appreciable commitment by the Contractors whose counterpart fund is anxiously awaited to harness its potentials on completion.

In addition to the foregoing numerous ongoing projects which the Ministry and the Federal Government are passionate about completing especially given the centrality of transportation in the Renewed Hope Agenda of Mr. President, a number of other rail modernization projects whose execution is about to commence that cut across the coastal and central states within the country exist.

The Minister has also directed the Contractor to ensure the completion of the Port Harcourt-Aba Rail Line before the end of the first quarter of this year.

Information reaching us at the point of this communication reveals a major funding challenge which prevents the contractor, CCECC from commencing the execution of the Central and Coastal Rail Lines, although the Ministry is making effective facilitation to overcome the challenge.

Our investigation further revealed that the ministerial initiative in facilitating speedy execution of the ongoing rail modernization projects has been extended to effective commitment towards sourcing funds for the completion of Rolling Stock Projects involving contracts for the design, manufacture, installation, commissioning of rolling stock, supply of spare parts and maintenance of equipment for all the ongoing projects.

Despite the huge ongoing projects which experts within the rail sector believe would be sufficient to meet the transport demands of Nigerians if completed, 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.

Added to the above multiple projects, 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 our highways through vehicle identification/tracking and transform the national mobility infrastructure in consonance with international best practices.

In a related development, the Ministry is pacifying collaborative efforts with more foreign investors such as Messrs Eco-transit Solutions, a Qatar-based company to cushion the effect of fuel subsidy removal through the provision of Compressed Natural Gas (CNG) vehicles using the latest emerging technologies in the transportation sector.

It is submitted that this intervention will serve a dual purpose of easing public inter-state transport and reviving the Federal Urban Mass Transit Scheme through effective utilisation of the new CNG vehicles that are designed to be eco-friendly, cost-effective and efficient.

After taking stock of activities within the Ministry and its agencies, the Honourable 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 led Administration.

After evaluating the chain of activities initiated by the Ministry in discharging supervisory role over its agencies especially the NRC which is the major industry player involved in the provision of rail services, it is significant to highlight the recent operational developments by the Corporation to provide alternative data of benchmarking its contribution in stimulating national 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 diversified challenges affecting the operations of the NRC as earlier stated in the background of this write-up, it is apt to note that 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.

In addition, the NRC is actively discharging freight of containers from APTM Lagos to Ibadan regularly. From September 2023 after the Commissioning of the container evacuation to decongest the port by the Hon Minister, a total of 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.

Furthermore, 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 rehabillitated old Narrow Gauge. It was discovered that from March 2023 to January 2024, 52,890 tons of cement has been transported to Ibadan by NRC.

Also, the NRC contributes towards efficient freight of gas pipes for the National Gas Project from Ajaokuta-Warri to Itakpe. This undertaking has been continuously discharged by the Corporation making the realisation of the project a reality with a high sense of cost-effectiveness and security of the gas pipes in transit.

Currently, the NRC is collaborating with 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 this year.

In recognition of the Tinubu Administration’s inclusion of transportation as 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 to, among others; develop a strategic plan for the unbundling of the NRC, create opportunities for private sector participation to reduce government involvement in the development/operation of the railways and ensure the provision of efficient, affordable and well-secured rail service across the country.

Our investigation has further revealed that the Ministry has initiated a Bill for consideration and passage into law by the National Assembly. The Bill proposes new entities under the unbundled NRC which are: the National Railway Agency, National Railway Carrier and Railway Assets Management Company.

It is expected that the proposed initiative will put to rest the prolonged and much-criticised old NRC Act that suffers obsoleteness, defective content and inadequate provisions that foreclose window for private sector participation.

Augustine A.O. Salifu
Executive Director
Coalition For Transparency and Integrity Watch