Time Has Come To Open Up Our Railway Sector To Private Sector Participation- Senator Gbenga B. Ashafa.
Senator Gbenga B. Ashafa
representing Lagos East Senatorial District at the 8th Senate, is
the Chairman Senate Committee on Land Transport. Through this feature, he
renders his opinion on how to transform the Nigerian Railway Sector and a
report on the efforts of the Senate Committee on Land Transport towards
ensuring a transformed railway Sector beneficial to all Nigerians.
representing Lagos East Senatorial District at the 8th Senate, is
the Chairman Senate Committee on Land Transport. Through this feature, he
renders his opinion on how to transform the Nigerian Railway Sector and a
report on the efforts of the Senate Committee on Land Transport towards
ensuring a transformed railway Sector beneficial to all Nigerians.
“The Nigerian Railway
Corporation traces its history to the year 1898, when the first railroad in
Nigeria was constructed by the British colonial government. On October 3, 1912
the Lagos Government Railway and the Baro-Kano Railway were amalgamated,
starting nationwide rail service under the name Government Department of
Railways. With the passing of the Nigerian Railway Corporation Act of 1955, the
company gained its current name as well as the exclusive legal right to
construct and operate rail service in Nigeria. The rail network reached its
maximum extent shortly after Nigerian independence, in 1964. Shortly after
that, the NRC entered a long period of decline, inept management, and
eventually a complete lack of maintenance of rail and locomotive assets. In
1988, NRC declared bankruptcy, and all rail traffic stopped for six months.
After that, trains resumed, where the tracks were usable. By 2002, passenger
service was again discontinued altogether. Starting in 2006, plans were made to
restore the rail lines and add new locomotives with foreign assistance. In
December 2012 regular, scheduled passenger service was restored on the Lagos to
Kano line.”– Wikepedia
Corporation traces its history to the year 1898, when the first railroad in
Nigeria was constructed by the British colonial government. On October 3, 1912
the Lagos Government Railway and the Baro-Kano Railway were amalgamated,
starting nationwide rail service under the name Government Department of
Railways. With the passing of the Nigerian Railway Corporation Act of 1955, the
company gained its current name as well as the exclusive legal right to
construct and operate rail service in Nigeria. The rail network reached its
maximum extent shortly after Nigerian independence, in 1964. Shortly after
that, the NRC entered a long period of decline, inept management, and
eventually a complete lack of maintenance of rail and locomotive assets. In
1988, NRC declared bankruptcy, and all rail traffic stopped for six months.
After that, trains resumed, where the tracks were usable. By 2002, passenger
service was again discontinued altogether. Starting in 2006, plans were made to
restore the rail lines and add new locomotives with foreign assistance. In
December 2012 regular, scheduled passenger service was restored on the Lagos to
Kano line.”– Wikepedia
I have chosen to start
this article with the foregoing quote from Wikepedia to give you all a
background of the history of the Nigerian Railway Corporation and by extension
the Nigerian Rail Sector. This quote will also put in proper perspective the
urgent need to open up our railway sector to Public/Private Sector
Participation.
this article with the foregoing quote from Wikepedia to give you all a
background of the history of the Nigerian Railway Corporation and by extension
the Nigerian Rail Sector. This quote will also put in proper perspective the
urgent need to open up our railway sector to Public/Private Sector
Participation.
In the recent past,
Nigeria particularly has learnt that private participation drives effectiveness
and Accountability in most service/utility sectors. We have learnt that the
Government cannot carry the burden of delivering every service or utility.
Successive governments in Nigeria have over the years burdened itself with the
task of providing power, water, a National Carrier, Telecommunications,
Railways etc.
Nigeria particularly has learnt that private participation drives effectiveness
and Accountability in most service/utility sectors. We have learnt that the
Government cannot carry the burden of delivering every service or utility.
Successive governments in Nigeria have over the years burdened itself with the
task of providing power, water, a National Carrier, Telecommunications,
Railways etc.
What we have experienced
till recently has been a steady decline in the functionality of Government-run
social utility services. This has led to the change in disposition of
Government towards extending a hand of partnership to the private sector to
come and invest in some of these sectors. Sectors that have benefitted from the
Private Sector Participation in Government Business include the
Telecommunications Sector and the Power Sector.
till recently has been a steady decline in the functionality of Government-run
social utility services. This has led to the change in disposition of
Government towards extending a hand of partnership to the private sector to
come and invest in some of these sectors. Sectors that have benefitted from the
Private Sector Participation in Government Business include the
Telecommunications Sector and the Power Sector.
Since the introduction of
private sector participation in the Telecommunications Sector, the service has
become more affordable, effective and accessible to every single Nigerian. The
Telecommunications value chain also employs Millions of Nigerians with
investment in the Sector set at about $32 Billion as at the first quarter of
2016.
private sector participation in the Telecommunications Sector, the service has
become more affordable, effective and accessible to every single Nigerian. The
Telecommunications value chain also employs Millions of Nigerians with
investment in the Sector set at about $32 Billion as at the first quarter of
2016.
Till the Telecoms sector
was opened up in 2001, it was an untapped gold mine with unfathomable
potential. It is this same quantum of potential that we seek to replicate by
introducing the requisite CHANGE into the Nigerian Railway Sector.
was opened up in 2001, it was an untapped gold mine with unfathomable
potential. It is this same quantum of potential that we seek to replicate by
introducing the requisite CHANGE into the Nigerian Railway Sector.
Now, to achieve this
change in disposition of any critical sector, there has to be a critical change
in the Legislation that drives the Sector. Legislation forms the fulcrum of
human, government and business interrelationship in every society. Hence what
we need to and seek to do is to drastically change the legislation that guides
the Nigerian Rail Sector to ensure that we maximize the full yet untapped
potential inherent therein. For the sake of emphasis, the legislation that
guides the Nigerian Railway Corporation was promulgated in 1955 (61 years ago).
change in disposition of any critical sector, there has to be a critical change
in the Legislation that drives the Sector. Legislation forms the fulcrum of
human, government and business interrelationship in every society. Hence what
we need to and seek to do is to drastically change the legislation that guides
the Nigerian Rail Sector to ensure that we maximize the full yet untapped
potential inherent therein. For the sake of emphasis, the legislation that
guides the Nigerian Railway Corporation was promulgated in 1955 (61 years ago).
Till now, you will agree
with me that the country has focused primarily on road transportation in
ferrying persons, goods and services from one point to the other. What this has
led to over the years has been an influx of cars, congested roads,
over-burdened road infrastructure, loss of lives to accidents and reduction in
the productivity of manpower due to unending hours spent in traffic jams.
with me that the country has focused primarily on road transportation in
ferrying persons, goods and services from one point to the other. What this has
led to over the years has been an influx of cars, congested roads,
over-burdened road infrastructure, loss of lives to accidents and reduction in
the productivity of manpower due to unending hours spent in traffic jams.
Government after
government has invested even more in road expansion projects. The result as can
be observed in the case of Lagos and Abuja has been a gradual occupation of the
expanded roads with more cars. This is attributable to rural-urban migration as
well as population explosion across the nation.
government has invested even more in road expansion projects. The result as can
be observed in the case of Lagos and Abuja has been a gradual occupation of the
expanded roads with more cars. This is attributable to rural-urban migration as
well as population explosion across the nation.
Mass transit remains a
very pivotal aspect of the development of any city. It plays a critical role in
enhancing productivity of the state by ensuring the movement of the largest
number of people from point A to Point B within the shortest possible time. It
also reflects the quality of life and the value placed on the unit citizen by
any responsible government.
very pivotal aspect of the development of any city. It plays a critical role in
enhancing productivity of the state by ensuring the movement of the largest
number of people from point A to Point B within the shortest possible time. It
also reflects the quality of life and the value placed on the unit citizen by
any responsible government.
You will agree with me
that the most effective means of transporting large quantities of humans, goods
and services within any country is via rail. This is why whenever the topic of
mass transit is discussed; rail transportation must be given its pride of
place.
that the most effective means of transporting large quantities of humans, goods
and services within any country is via rail. This is why whenever the topic of
mass transit is discussed; rail transportation must be given its pride of
place.
In the light of the
foregoing, When I was appointed the Chairman of the Senate Committee on Land
Transport, my humble self and committee members held interactive sessions with
the Ministry of Transport and the Nigerian Railway Corporation to listen to the
challenges facing the rail sector. We also at other different fora interfaced
with stakeholders in the Rail Sector to feel their pulse on what needs to
change to enable the Sector thrive. Our intention was to ascertaining how we as
legislators could be of assistance to the Federal Government and fellow
Nigerians through creating an enabling environment to revamp the rail sector
through the instrumentality of legislation.
foregoing, When I was appointed the Chairman of the Senate Committee on Land
Transport, my humble self and committee members held interactive sessions with
the Ministry of Transport and the Nigerian Railway Corporation to listen to the
challenges facing the rail sector. We also at other different fora interfaced
with stakeholders in the Rail Sector to feel their pulse on what needs to
change to enable the Sector thrive. Our intention was to ascertaining how we as
legislators could be of assistance to the Federal Government and fellow
Nigerians through creating an enabling environment to revamp the rail sector
through the instrumentality of legislation.
Upon our interaction with
the Stakeholders, we discovered that there is an urgent need to open up the
Sector to active private participation, predicated upon both State and Private
Sector Participation on a level playing field. To achieve this, we zeroed-in
an urgent need to amend or repeal the existing Nigerian Railway
Corporation Act, 1955, which does not contemplate private participation in
the rail sector. I am therefore convinced that the time has come for us to open
up our railway sector to private sector participation.
the Stakeholders, we discovered that there is an urgent need to open up the
Sector to active private participation, predicated upon both State and Private
Sector Participation on a level playing field. To achieve this, we zeroed-in
an urgent need to amend or repeal the existing Nigerian Railway
Corporation Act, 1955, which does not contemplate private participation in
the rail sector. I am therefore convinced that the time has come for us to open
up our railway sector to private sector participation.
Just in good time, the
Senate at Plenary forwarded the Nigerian Railway Corporation Repeal and
Reenactment Bill 2015, sponsored by Distinguished Senator Andy Uba to the
Senate Committee on Land Transport. Shortly after that, the National Transport
commission Bill 2016 was equally forwarded to the Committee on Land
Transport.
Senate at Plenary forwarded the Nigerian Railway Corporation Repeal and
Reenactment Bill 2015, sponsored by Distinguished Senator Andy Uba to the
Senate Committee on Land Transport. Shortly after that, the National Transport
commission Bill 2016 was equally forwarded to the Committee on Land
Transport.
With regard to the
Nigerian Railway Corporation Repeal and Reenactment bill, the Senate Committee
on Land Transport successfully held a public hearing, which had in attendance
all the important stakeholders in the sector. This culminated in the setting up
of a technical committee made up of stakeholders with the legal and technical
expertise to further advise the Senate committee on the desirable disposition
of the proposed legislation. On Wednesday, 24th May, 2015, the
report of the technical committee was submitted to us and I had the privilege
of presenting the said report to His Excellency, the President of the 8th Senate,
Dr. Abubakar Bukola Saraki on the same date.
Nigerian Railway Corporation Repeal and Reenactment bill, the Senate Committee
on Land Transport successfully held a public hearing, which had in attendance
all the important stakeholders in the sector. This culminated in the setting up
of a technical committee made up of stakeholders with the legal and technical
expertise to further advise the Senate committee on the desirable disposition
of the proposed legislation. On Wednesday, 24th May, 2015, the
report of the technical committee was submitted to us and I had the privilege
of presenting the said report to His Excellency, the President of the 8th Senate,
Dr. Abubakar Bukola Saraki on the same date.
Based on the
recommendation of both the Senate Committee on Land Transport and the Technical
Committee on the Nigerian Railway Corporation Act Repeal and Reenactment Bill
2015, it was agreed that due to the extensive recommended changes, the tittle of
the Bill should be changed to the Nigerian Railway bill, 2016.
recommendation of both the Senate Committee on Land Transport and the Technical
Committee on the Nigerian Railway Corporation Act Repeal and Reenactment Bill
2015, it was agreed that due to the extensive recommended changes, the tittle of
the Bill should be changed to the Nigerian Railway bill, 2016.
Consideration of the
report of the Senate committee on Land Transport with regard to the said Bill
has equally commenced before the Senate at plenary. The Third and Final Reading
of the Bill, which will include the line-by-line consideration of the committee
recommendations with regard to the Bill will be completed upon the resumption
of the Senate from its recess. With regard to the National Transport Commission
Bill, preparations are currently in full gear to hold a public hearing as
well.
report of the Senate committee on Land Transport with regard to the said Bill
has equally commenced before the Senate at plenary. The Third and Final Reading
of the Bill, which will include the line-by-line consideration of the committee
recommendations with regard to the Bill will be completed upon the resumption
of the Senate from its recess. With regard to the National Transport Commission
Bill, preparations are currently in full gear to hold a public hearing as
well.
It is very important to
note that up until 1993, the British also ran a state model of ownership and
operation of the Railways and they faced similar challenges in funding and
efficiency of the service. In a speech titled Rail growth through
competition: the success of the UK model delivered by The
Rt Hon Patrick McLoughlin MP on 12 November 2013 at the European Rail
Congress, McLoughling pointed out as follows: “In fact the
Railways Act came into effect on November 5 1993, breaking up the state-run
British Rail, and transforming the face of our railway for ever. Nobody back
then could have predicted the extraordinary changes that have taken place over
the subsequent 2 decades.”
note that up until 1993, the British also ran a state model of ownership and
operation of the Railways and they faced similar challenges in funding and
efficiency of the service. In a speech titled Rail growth through
competition: the success of the UK model delivered by The
Rt Hon Patrick McLoughlin MP on 12 November 2013 at the European Rail
Congress, McLoughling pointed out as follows: “In fact the
Railways Act came into effect on November 5 1993, breaking up the state-run
British Rail, and transforming the face of our railway for ever. Nobody back
then could have predicted the extraordinary changes that have taken place over
the subsequent 2 decades.”
McLoughling stated further
that “Rail travel had dwindled to such an extent that most
people thought the private train operators would manage a decline in both
passenger and freight traffic. How wrong they were. Privatisation sparked a
railway renaissance. Since 1993, passenger journeys have doubled in the UK to a
level not seen since the 1920s. On a network roughly the same size as 15 years
ago, today our railway is running 4,000 more services a day. And rail freight
has grown by 60%. Revenue is up more than £3 billion since privatisation,
almost all of it due to higher passenger numbers rather than fare rises Safety
levels are at an all time high. Punctuality is at near record levels. And passenger
satisfaction is up by 10% over the past decade. None of this would have
happened without privatization, without competition, without franchises
investing in better services. Without an industry structure promoting
accountability and incentivising growth.”
that “Rail travel had dwindled to such an extent that most
people thought the private train operators would manage a decline in both
passenger and freight traffic. How wrong they were. Privatisation sparked a
railway renaissance. Since 1993, passenger journeys have doubled in the UK to a
level not seen since the 1920s. On a network roughly the same size as 15 years
ago, today our railway is running 4,000 more services a day. And rail freight
has grown by 60%. Revenue is up more than £3 billion since privatisation,
almost all of it due to higher passenger numbers rather than fare rises Safety
levels are at an all time high. Punctuality is at near record levels. And passenger
satisfaction is up by 10% over the past decade. None of this would have
happened without privatization, without competition, without franchises
investing in better services. Without an industry structure promoting
accountability and incentivising growth.”
What we seek to achieve by
these legislations is to replicate in Nigeria what started in the United
Kingdom a bit over 20 years ago and as succinctly captured by the quotes from
McLoughlin MP, just above.
these legislations is to replicate in Nigeria what started in the United
Kingdom a bit over 20 years ago and as succinctly captured by the quotes from
McLoughlin MP, just above.
This radical departure
from the norm will make the sector more attractive to investors, by separating
the roles of the operators and the regulator. A whole lot of investors have
over time complained about the role of the Nigerian Railway Corporation as both
the operator and the regulator in the sector. With the
upcoming legislation, we expect to see a completely re-positioned Rail
Transport Sector, open to private sector participation.
from the norm will make the sector more attractive to investors, by separating
the roles of the operators and the regulator. A whole lot of investors have
over time complained about the role of the Nigerian Railway Corporation as both
the operator and the regulator in the sector. With the
upcoming legislation, we expect to see a completely re-positioned Rail
Transport Sector, open to private sector participation.
Once the rail sector is
opened up to Private Sector Participation, we would have achieved two principal
things, which are; Creation of Millions of jobs on one hand and also we would
have successfully solved the challenge of inter/intra city mass transit.
opened up to Private Sector Participation, we would have achieved two principal
things, which are; Creation of Millions of jobs on one hand and also we would
have successfully solved the challenge of inter/intra city mass transit.
Further more, in respect
to Public Private Partnerships in the Rail Sector, the World Bank Group’s
Public-Private-Partnership in Infrastructure Resource Center has also
recommended the shared infrastructure model, which the upcoming legislation
proposes when it stated that, “PPPs in railways can bring
opportunities for investment, operating efficiency and modern and clean
technology. PPP railway projects providing for shared use of rail tracks may
lead to efficiency gains and
an increased revenue basis for states”
to Public Private Partnerships in the Rail Sector, the World Bank Group’s
Public-Private-Partnership in Infrastructure Resource Center has also
recommended the shared infrastructure model, which the upcoming legislation
proposes when it stated that, “PPPs in railways can bring
opportunities for investment, operating efficiency and modern and clean
technology. PPP railway projects providing for shared use of rail tracks may
lead to efficiency gains and
an increased revenue basis for states”
Having said these, I must
thoroughly commend the effort of the Muhammadu Buhari led APC Government through
the Ministry of Transportation headed by H.E Rt. Hon Rotimi Amaechi in
consolidating the infrastructure relevant to drive our renewed rail sector, the
Senate President who ab-initio showed interest in this vital sector by
convening the National Assembly Business Environment Roundtable for the first
time. I also commend the various states that have begun laudable intra-city
rail lines, of particular note is the Government of Lagos State ably led by H.E
Governor Akinwunmi Ambode. The Nigerian Railway Bill 2016 will essentially
become the Bill that will bring all these brilliant initiatives by the Federal
government and soon- to- be investors together to ease the Mass Transportation
challenges across the Nation and as such help to increase the collective
productivity of our work force.
thoroughly commend the effort of the Muhammadu Buhari led APC Government through
the Ministry of Transportation headed by H.E Rt. Hon Rotimi Amaechi in
consolidating the infrastructure relevant to drive our renewed rail sector, the
Senate President who ab-initio showed interest in this vital sector by
convening the National Assembly Business Environment Roundtable for the first
time. I also commend the various states that have begun laudable intra-city
rail lines, of particular note is the Government of Lagos State ably led by H.E
Governor Akinwunmi Ambode. The Nigerian Railway Bill 2016 will essentially
become the Bill that will bring all these brilliant initiatives by the Federal
government and soon- to- be investors together to ease the Mass Transportation
challenges across the Nation and as such help to increase the collective
productivity of our work force.
In the same vein, I would
like to seize this opportunity to commend all those who have worked tirelessly
and pro-bono with the Senate Committee on Land transport, particularly the
members of the Technical Committee on the Railway bill, ably chaired by
Engineer C.C Okoye, the Chairman Body of Fellows, Nigerian Society of
Engineers, the Nigerian Infrastructure Advisory Fund, Nigerian Economic Summit
Group, Ministry of Transport, Office of the Senate President, the Nigerian Railway
Corporation and all those who time and space would not allow me to mention
here. We are indeed grateful.
like to seize this opportunity to commend all those who have worked tirelessly
and pro-bono with the Senate Committee on Land transport, particularly the
members of the Technical Committee on the Railway bill, ably chaired by
Engineer C.C Okoye, the Chairman Body of Fellows, Nigerian Society of
Engineers, the Nigerian Infrastructure Advisory Fund, Nigerian Economic Summit
Group, Ministry of Transport, Office of the Senate President, the Nigerian Railway
Corporation and all those who time and space would not allow me to mention
here. We are indeed grateful.
It is our earnest hope,
that these laws garner support across board and that upon the passage of these
new legislations by this 8th National Assembly, we would have
contributed in no small measure in opening up the rail sector, thereby
attracting both Local and Foreign investments, creating millions of jobs and
also establish a beneficial platform for the transportation of humans, goods
and services alike.
that these laws garner support across board and that upon the passage of these
new legislations by this 8th National Assembly, we would have
contributed in no small measure in opening up the rail sector, thereby
attracting both Local and Foreign investments, creating millions of jobs and
also establish a beneficial platform for the transportation of humans, goods
and services alike.
