$12bn Lagos-Calabar Rail Contract: Then What?

By Adewumi Adedoyin

Recently, China and Nigeria signed a construction contract to build a coastal 22-stop railway that will stretch for 1,402km linking Lagos and Calabar with maximum speed of 120km/hour for a cost of $11.97billion. Unfortunately though, Nigerians have become immune to celebrating further announcements of activities aimed at the resuscitation of the rail transport due to disappointments in the past.

Railway transportation in other parts of the world contribute immensely towards the attainment of economic and social goals but for a long time, that has not been the case for Nigeria as the sector is suffering from monumental neglect and corruption.

Nigeria was one of the few African countries to have a well-planned, well developed and well funded railway system, which operated a network of 3,505km of single track lines with 1,067mm gauge which was started in 1898. Even though the British, who were the nation’s colonial master, constructed the rail with the major intention to benefit the economy of the home country, they left a legacy that just needed to be improved. Fifty four years after independence, absolutely little improvements have only been made to what the colonizers left. The British had completed 3,000 kilometres of rail tracks in 1960 an additional 506 kilometres of tracks has been added since then.

The civil war depressed railway operations and in the 1970s with oil boom also doing its  umber on the tracks as low interest in other exports apart from oil ebbed and resulted in reduced freight haulage. Between 1954 and 1975, the Nigeria Railway Corporation (NRC) employed over 35,000 people but currently its employment capacity is 6,516, with no new wagons purchased since 1993 and those available dates back to 1984 with track conditions limiting trains to a speed of 35km per hour.

The NRC didn’t have commercial objectives as its priority and government changes in administration and policies resulted in structural and managerial problems for the Nigerian rail transport.  It is surprising that a sector as vital as the rail was allowed to rot due to corruption and mismanagement: a sector that carried millions of people yearly and provided jobs for thousands more, including generating revenue for the government in ticket fares levied on commuters.

Over the years and despite huge allocations, the NRC has failed to maintain its locomotives at a level which permits efficient use. In spite of official claims , successive administrations have attached little importance to railway transportation even as they awarded multiple fake contracts for its improvement.  Late General Sani Abacha awarded a $500 million contract to the China Civil Engineering Construction Company (CCECC) in 1995 to modernise the Lagos-Kano line and despite the loss incurred after the failed execution of the project, the Obasanjo administration awarded another $8.5 billion in October 2006 on the same modernisation ambition with no tangible result to show.

In 2009, the administration of late President Umar Yar’Adua approved $76.25 million for the purchase of 25 diesel powered locomotives when other countries of the world were already operating Luas (a light rail system).  As with the coaches acquired by the Abacha regime, little is known of any improvements achieved through the 2009 expenditures. Another N7 billion allocated in 2003 for the completion of the NRC workshops and repair of ground engines has not been satisfactorily accounted for. In the United States, an investment of $1billion in the sector generates between 12,300-26,000 jobs, can the same be said for Nigeria which has invested more?

Incidentally, the current administration of President Goodluck Ebele Jonathan GJ) has also been active in allocating huge amounts of money to the rail sector, albeit with a little more result than his predecessors. GEJ proposed $1.5billion dual-carriage high speed rail between Lagos and Ibadan, which should be a huge leap from the existing narrow gauge lines, if the dream ever come to reality. The administration has also awarded contracts worth $3billion, in addition to budgetary allocations of N104 billion since 2009 to the NRC.  In August 2013, NRC celebrated a “new dawn”, as for the first time in 17years, it resumed haulage and service level with the opening of train load of 2,040feet container wagons from Apapa Wharf to Kaduna/Kano.  A year on, it is expected that heavy duty vehicles on this route should have lessened, but the case doesn’t seem to be so.

The loss the country has suffered as a result of a moribund railway is unquantifiable over 20 years worth of loss. Just a handful of Nigerians less than 25 years of age have ever ridden on a train. Most have not even seen either a moving or stationary train except in pictures. Quantifying that amount of loss in labour, revenue and development will be difficult.

The single most important factor in the destruction of railway sector is corruption. Corruption in government and within the NRC also, and as long as corruption continues to exist, even if the government succeeds in raising it up from the ashes, it would always fail.  Some experts have advised the government take the path of privatisation in tackling corruption in the sector on the long run. However, a successful privatisation exercise of the sector will occur, the obsolete Railway Act of 1955 must be repealed as it has prevented local and international private investments from going into the sector. To further aid this, the government should implement the Bureau of Public Enterprises Plan that provides for the unbundling of the NRC into lots, which will be given out as concessions or sold.

The creation of Rail Track Authority to regulate the industry to operate like the Nigerian Communications Commission (NCC) does with telecommunications companies is also necessary. Globally acknowledged monumental growth and competitiveness witnessed in telecom sector can be replicated in the rail sector as well if this is done.

The effects of an efficient rail system to an economy cannot be overemphasised instead of the archaic changes currently being celebrated as revolutionary by the NRC in which the Lagos-Kano trip takes 32 hours, in a century where a British company recently purchased a coach that would make the distance between Lagos to Abuja in just over two hours!

Availability of electricity is sine qua non in the emergence of modern, efficient railway system. The current 3,500 megawatts available for a population of 175 million is certainly not enough to contemplate the introduction of electric trains in the country.

It is a given that if the railway is fully restored, it would make an impact on unemployment as there will be an absorption of workforce. There would also be increase in internally generated revenue for the government from ticket and haulage fares and most importantly, roads will have reduced carnage and deaths and time wastage with the reduction of heavy duty vehicles that cause majority of accidents on the roads and the roads will certainly last longer.

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