THE CRAZY COST OF RUNNING NRC

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(Last Updated On: 2021-11-22)

.Selected Railway Route Across Nigeria to Gulp $37.8bn
.Despite $500m China’s Exim Bank Concessionary Loan
.Many Nigerian Cities Have No Standard Gauge Yet
.NRC Generates N1.13bn Revenue Last Year
.Projects N61.5bn Procurement Activities In 2022

By Bolaji Ibraheem

The Minister of State for Transportation, Mrs. Gbemisola Saraki, last month at a Nigeria International Partnership Forum in Paris, France, invited potential investors to visit Nigeria and explore investment opportunities in the rail sector as the Nigerian Government is set to unbundle and commercialise the Nigerian Railway Corporation (NRC) to optimise its operations.

She said the unbundling of the corporation would drive competition in the industry, enhance service delivery to customers and improve infrastructures and other asset maintenance. The investment drive to optimise NRC operations and advance private sector participation took place 66 years after the Nigerian Railway became an autonomous public corporation.

The Nigerian Railway became an autonomous Public Corporation created by an Act of Parliament – Nigerian Railway Corporation Act 1955 with the general objectives of “carriage of passengers and goods in a manner that will offer full value of money, meet cost of operations, improve market share and quality of service, ensure safety of operations, and maximum efficiency, meet social responsibility in a manner that will meet the requirements of rail users, trade commerce, industry and general public.”

Railway development in Nigeria was initiated by private companies. This was later taken over by the then Colonial Government as Government Railway for the purpose of easy and cheap movement of goods from the hinterland to the seaports and vice-versa. Between 1879 and 1892, various applications for concession to construct a rail network by private interest were received by the Colonial Government.

Though an initial survey conducted by Mr. WiIliam Shelford in 1879 and 1892, revealed great potentials for trade in the country. It was not until 1895 that the then Secretary of State for Colonies, Mr. Chamberlain gave approval for the construction of 32km of a 1067mm gauge rail line from Iddo, Lagos, to Otta, Ogun State. The construction of the first rail line in Nigeria, a 193km Lagos – Ibadan commenced in 1898 and was completed in 1901.

Subsequently, Railway construction experienced continual extensions, a 295km rail line from Ibada – Jebba between 1901 and 1909, 562 km rail line from Kano -Baro between 1907 -1911; a 255 km rail line from Jebba – Minna from 1901 -1915; a 243 km rail way from Port Harcourt – Enugu between 1914 – 1916; 220km railway from Enugu – Makurdi from 1916 to 1924; 179 km railway from Kaduna to Kafanchan in 1927; and the 101km railway line from Kafanchan – Jos which was opened to traffic in 1927.

APNews investigations revealed that there was no railway development for more than three decades after the Kafanchan – Jos railway in 1927. However, further development commenced from 1958 when a 238km railway track was taken from Kafanchan to Bauchi in 1961 and ultimately, the 302km rail line to Maiduguri. This development brought the total route kilometres to 4,332.

This aspect of the development was however preceded by the discontinuation of the Bauchi Light Railway – 2’6″ gauge service running from Jos – Zaria. Similarly in 1986, Government embarked on the construction of a 19km (1069mm) gauge rail line from Port Harcourt to Onne deep seaport as well as a 277km standard gauge rail line from Itakpe through Ajaokuta to Warri in present Delta State. Few among these are listed for re-construction by the present administration at incredible cost.

Due to several decades of neglect and lack of adequate funding of the Nigerian railway system, which was formerly regarded as the first well thought through and funded railway system in Africa, most of the railway constructed in the 60’s and 80’s have been left unattended to, became redundant for years or became unused.

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Recent activities at the NCR indicate that the national railway system is undergoing some rehabilitation and ‘modernization’ through the support of the Federal Ministry of Transport. The rehabilitation of the Railway System includes track spot renewal, upgrading of the signalling and the telecommunication system, rehabilitation of Carriage and Wagon workshops and the likes.

The Minister of Transportation, Rotimi Amechi, at the recent annual public lecture of the Department of Economics at J.F Ade-Ajayi Auditorium, University of Lagos disclosed that the Federal Government would spend $37.8 billion for the entire rail line project embarked on across the six geo-political zones of the country. He however, noted that from this huge amount of money, the government had only obtained a $500 million loan with which it wrapped up the Lagos – Ibadan standard gauge project.

Addressing the gathering on the topic – “The Nigeria National Rail Transport Project: Network, Financing, Challenges and the Way Forward,” Amechi gave a breakdown of the project costs. The Transport minister said: “So far, the Federal Government has laid out plans for the construction of Lagos- Calabar at $11.1billion, Ibadan – Kano at $5.3billion for single track, Port Harcourt – Maiduguri at $3.02 billion for restriction of narrow gauge. The Abuja – Itakpe rail project cost $3.9 billion. A total of $12 billion to $13 billion is planned for standard gauge approved by the President.”

The minister stated further that though he had got the Presidential approval for the projects, none was yet to take off because of lack of funds because it was becoming increasingly difficult to access funds. On the need for construction of more standard gauge for trains to carry more freight rather than emphasizing on narrow guage meant for passenger services, Amechi said Nigeria does not have the economic activity to carry connecting many of the nation’s cities by standard rail gauge.

The contract for building the Abuja – Kaduna new rail line was awarded in December 2010. The track-laying for the single standard gauge line was also launched. The estimated cost of the rail project was $874 million (approximately N317 billion). China’s Exim Bank provided $500 million as a concessionary loan for the project, while the remainder was provided by the Federal Government. Lagos – Ibadan completed at $2 billion

The minister admitted that financing is a big challenge to railway development in the country as citizens keep complaining about taking more loans. He explained that presently, it was from the budget that the Federal Government sourced funds with which the Kaduna – Kano railway construction was embarked on while still negotiating the loan for Ibadan – Kaduna, because the plan is for a brand new Lagos – Kano railway.

The NRC shot itself in the leg by disclosing that it generated N1.13 billion in revenue in 2020 and proposed the sum of N61.5 billion for 2022 procurement activities. Managing Director of NRC, Fidelis Okhrika disclosed this during a recent visit by members of the National Assembly Joint Committee on Transportation, led by the Chairman, Abdulfatai Buhari, to the corporation’s headquarters on an oversight function.

Okhrika explained that the N61.5 billion requested for procurement activities next year cuts across 22 budget lines. These include procurement of spare (including lubricants) for the imported locomotive engines, coaches and wagons; insurance of locomotive and rolling stocks; rehabilitation of track from Port Harcourt to Makurdi; maintenance of road to stations, rest houses, workshop, chalets end, operational residential quarters, among others.

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He also informed the visiting National Assembly Committee that the NRC’s current personnel strength was 10,627, with the current personnel cost of N9.14 billion for 2021. He added that due to the additional staff requirements for the operation of the new Lagos – Ibadan standard gauge line; a total of 1,000 additional staff was being considered with an additional wage bill of N567, 451,300 per annum. That is an average of N567, 451.30k per staff.

The dizzying cost of the proposed railway listed to be constructed by the present administration, the cost of each of the ‘new’ locomotive engines, coaches and wagons imported from China coupled with the cost of running Nigerian Railway Corporation has nudged a few Nigerians into calling for privatisation of the NRC.

One of the respondents to the crazy running cost of the NRC, Oluwaseun Ogunseitan, opined that the NRC needs to review its operational procedures and provide international best services before further damage is done. “Now, the time is ripe for the National Assembly to insist on a quick beginning of the privatisation initiative of the NRC with delivery deadlines. Such must include licences to world renowned Rail operators to expand,” he said.

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Another respondent, Simeon Ajebo, the cost of running trains and railway in Nigeria triple that of the advanced nations whose rail system uses electricity. “We’ve just read online that in Germany, the railway authority has just introduced a driverless train. Here we are in my country, some government officials decided to fool Nigerians by bringing down refurbished and outdated locomotive engines for us to use while the Chinese people are cruising in bullet trains. That is one example of unpatriotic nature of our so called political leaders in our country,” he said.

Nigerians have argued that the NRC will start doing well and make use of faster trains only if it is privatised by the government. They cited examples of the German rail operator, Deutsche Bahn and industrial group, Siemens, that recently unveiled the world’s first automated, driverless train in the city of Hamburg. This came into being as a result of privatisation. The new driverless train in Germany is billed to be more punctual and energy efficient than the outdated traditional train system being celebrated in Nigeria.

Telling his experiences during a train journey he embarked on from Kaduna to Abuja in October, Senator Shehu Sani expressed worry over the security cover prepared for the NRC trains, passengers and their workers. According to him, bandits attacked the Abuja bound train saying, “They (bandits) planted an explosive that damaged the rail track and shattered the windshield of the train engine. They also opened fire, targeting the driver and the tank. It happened between Dutse and Rijana stations. The driver struggled to move towards Kaduna Rigasa station.”

Last month, Michael Olaogun was riding in one of the newly acquired locomotives by the NRC from Warri in Delta State to Abuja. The engine broke down between Ajaokuta and Itobo train station and the passengers and NRC workers were stranded in a thick bush for over an hour. Olaogun noted that frequency of the breakdowns of these imported Chinese locomotive engines shows that little has changed in the lackluster NRC operations, which saw the collapse of the once vibrant Nigeria railway network.

In his swift reaction to the engine failure, the Managing Director of the NRC, Fidelis Okhrika, in his response to frequent breakdown of the imported locomotive engines, said such happened as a result of engine failure. But, the Minister, Rotimi Amechi, in 2020, reportedly assured Nigerians that the locomotive engines that broke down would be returned to China. Why have these locomotives (few of them turbo-charged engines) not been returned? What grade of locomotives is “new” but breaking down regularly?

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The recent attack on Abuja- Kaduna train service, and frequent breakdown of the ‘new’ locomotive engines procured by the Federal Government, workers of the NRC, under the aegis of the Nigeria Union of Railway Workers (NUR) and Senior Staff Association, Nigerian Railway Branch, called on the Federal Government to provide security on trains, workers and passengers. Early y last month, President – General, Nigerian Union of Railway Workers (NUR), Innocent Ajiji, the union’s Secretary – General, Mr. Segun Esan and President – General, Senior Staff Association, (NRC) branch, Aliyu Mainasara, at a press conference in Abuja.

They urged the Federal Government to see the attack on a train in the country as a wake-up call to the government and all security agencies to reflect and come up with more terrorist threat mitigation strategies that will practically would make the recurrence of train attack an impossibility. Similarly, they urged the Federal Government to strengthen worker’s social benefit by embarking on individual insurance and also review their salaries.

Also, they demanded for the extension of the patriotism and goodwill of the Federal Government to workers of the corporation by reviewing their salaries for enhancements or they will go on strike; and they do for three consecutive days which eventually shut all activities of the corporation across the country.

Findings show that the NRC at the stage of inception was rendering adequate services but we could recall that the managerial problems of the corporation emanated after the indigenization Act of 1976. According to the NRC Ordinance Act 1955; the goals and objectives of the corporation as stated in the Ordinance are to manage and operate the railway and provide reasonable facilities for the carrying of passengers and load.

Others are: to control railway expenditure, to ensure that, so far as it is practicable annual renewed are sufficient to meet all expenditures properly chargeable to revenue, to direct and control the expansion of the railway system. The main

The main objective of the NRC is to provide efficient and reliable goods and passenger services in order to enhance the economic, social and general welfare of the country. The immediate objective in the beginning was to lay a sound technical and economic foundation for a steady and successful operation in subsequent years.

Transportation is an important aspect of any development initiative or process. Despite billions of naira intervention committed to rejuvenating the NRC by the present government, the corporation’s management has failed to lead it to attain the efficiency level expected of it in the transportation of goods and passengers. This is as a result of several managerial problems affecting its operations. The managerial problems also contributed immensely to the three – days strike embarked on last week by NRC workers.

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