Rail contract resurfaces, still at snail’s speed
During the signing ceremony, the Minister of Transport, Alhaji Ibrahim Isa Bio, noted that the project was reviewed downward from the initial $8.3 billion signed by the Obasanjo administration. It is designated as the Phase I, segment 1 modernisation project, which would cover Abuja (IDU)-Kaduna axis. “The former agreement is lopsided. We had to analyse […]
During the signing ceremony, the Minister of Transport, Alhaji Ibrahim Isa Bio, noted that the project was reviewed downward from the initial $8.3 billion signed by the Obasanjo administration. It is designated as the Phase I, segment 1 modernisation project, which would cover Abuja (IDU)-Kaduna axis. “The former agreement is lopsided. We had to analyse the previous project to make sure it serves the public better and save cost.”
The minister further revealed that some of the loopholes detected as high cost of the initial (initial contract) project and the absence of funding plan, and a lot of other issues discovered to be inconsistent with the policies of the present administration. The minister also revealed that the initial payment of $250 million and $8.4million made to the CCECC as well $8.4 million paid to the consultant (Team Nig. Ltd) would still be part of the new contract.
Aside the loopholes detected by the present administration, the project has been widely criticised for its sluggish pace in rebuilding and rehabilitating Nigeria’s single track rail line. The same project contract was first awarded by General Sani Abacha in 1994. Then in 1999, it was reviewed and re-awarded by Obasanjo and now in 2009, it has been reviewed and re-awarded again, spanning about 15 years for reviews and re-awarding, plus another 25-year conclusion period, making the start to finish about 40 years.
While the construction company is being accused of sluggish performance, the company’s project representative, Mr Chi Hong Bing said though the money paid the company is just $250 million, the company had made progress on the 1,315-kilometre Lagos-Kano double track standard gauge, rehabilitation which is the first phase of the 25-year-long project.
As the present administration hopes to be one of the top 20 economies in the world by year 2020, so many issues regarding the moribund railway system as well as other infrastructural challenges in the country have been raised by various experts and stakeholders alike. A retired academic who is now a consultant, Engineer Adewale Olanrewaju, opined that Nigeria as a country will continue to suffer infrastructural underdevelopment as long as research and development is relegated.
He said the concept of borrowed development that the country is relying upon would not last. “Government’s commitment to research and development is seriously lacking, thus making innovations impossible.
“If I were to advise, a fraction of the said amount meant for the railway project should be devoted to research and development in the nation’s universities within the span of that same contract period (25 years). There would be meaningful innovations for the ailing railway sector.” He said when the nation’s universities are properly funded, the implication is that they will become more alive to their duties providing the needed impetus for the development of the railway sector which would ultimately drive and lower the costs that may be incurred.
Olarewaju said borrowed technology cannot take the nation’s infrastructure to the desired destination. “While western countries busy themselves with research and development, they advise African leaders to buy innovations. It may be argued that the gestation periods for the indigenous innovations may be ‘too long’ but I would rather think it is better late than never. Instead of siphoning monies to foreign companies, we can work at improving local content by way of increased funding in research and development.”
As the argument continues to take different dimensions, some are of the opinion that allowing private investors to run the railway system is the best bet. An official of the Bureau for Public Enterprises, BPE, who does not want his name in print, told Weekly Trust that competitive atmosphere remains the best solution owing to the incessant sharp practices and inefficiency that are being left to crumble the railway system. “Because railways are very capital-intensive, the Nigerian government should encourage competition by allowing private sector participation in ownership, funding and operations. This will help to intensify the effort to modernise railway infrastructure and services.”
From the economic perspective, the BPE source said “it is much easier for the private businesses to raise money through the stock market than the government. Permitting private corporations and individuals to fund railway operations will usher in modern technologies which in turn will turn to economic growth.”
Another argument posited by Mabogunje (1998) stated, “there are a few available avenues in most African nations for raising sufficient revenues to fund urban infrastructure…This is the case with Nigeria. Railways have been funded by governments only. There is no ‘partnering’. He further argued that private transport companies with strong financial base should be allowed to invest in railway businesses alongside the Nigerian Railway Corporation to increase regularity, adequacy and reliability for railway services in Nigeria.
However, there is a constitutional debacle to the liberalisation of the sector because it contravenes the 1955 Act incorporating the NRC as the only body allowed to operate rail services in Nigeria, though a comparative analysis of such arguments indicates that the story has a bit of ‘success’ story. For example, the recent Abidjan (Ivory Coast)-Ouagadougou (Burkina Faso) railway concession is a perfect example of where private/public participation functioned well in Africa.
A World Bank report stated “in the first full year of operation (Oct. 1, 1995 to September 30, 1996), freight traffic almost doubled in comparison to 1994-1995 and the quality of service to freight customers improved substantially”.
In spite of the huge amount of money sunk into the Nigerian railways, the results are still not impressive. Weekly Trust learnet that from the 11 million passengers that used the rail system in 1964, the number has plunged to about one million in 2003. It used to carry three million tonnes of freight in 1960 but now carries 10,000 tonnes per annum.
Owing to the abysmal failure of huge public investments to salvage the sector, Mr Dauda Mandara, a former senior staff of the NRC said, “The rail system is being deliberately sabotaged by powerful people. They are men in the haulage business who have fleet of road transport vehicles and the most annoying part of it is that the government knows this ‘top’ people. They are like the untouchables. They have succeeded in getting some of us out of jobs and are still doing damage to the nation’s economy”.
Concluding on the railway modernisation/rehabilitation project, Mandara said “the project has lasted for about 15 years now and has about twenty-five years to be completed. “I wonder how the government’s Vision 2020 will be realised in the next eleven years without a well-connected and functional railway system. Even the top 500 economies in the world have functional railway systems. How can Nigeria be one of the top 20 without that infrastructure? The railway modernisation project timing is inconsistent with Vision 2020.”
General Sani Abacha started it, Obasanjo did his own and Yar’adua is undertaking his turn, when he goes another government would probably follow up with another revised railway contract. This is a case of a contract developing nine lives like the proverbial cat.