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Reviving the rail system
Related to country: Nigeria

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Reviving the rail system
By Editorial board
Published: Monday, 26 Nov 2007

The Minister of Transportation, Mrs. Diezani Alison-Madueke, was stating the obvious when she recently emphasised the need to resuscitate the railway system. It is a timely reminder that Nigeria’s almost total dependence on road transport system damages the roads, causes road accidents and slows down the economy.

The Minister has rightly identified the revival of the railway as the one right solution that can bring relief to passengers and reduce the burden on roads. However, while her promise of drastic reforms at the NRC is commendable, much of the improvement needed will come from the political will to reduce graft and inefficiency that have plagued the system for many years as well as opening up the sector for private sector participation.

Of all transport modes, the railway has been the most troubled and neglected. The toll on the economy has been very high in the past 20 years when the rail system became almost moribund. Owing to the government’s stranglehold on the system through the Railway Act of 1955, which makes the sector a monopoly, there has been too little investment.

The consequence has been dire on the economy. NRC’s passenger and freight traffic statistics show that a system that transported over 11 million passengers in 1964 carried just about 1.5 million in 2003. Freight figures also declined sharply from about 3 million tonnes to less than 10,000 tonnes during the same period.

The railway routes have reduced significantly in number and rail travel lost its attraction at a time when the country’s population is expanding rapidly. The roads have become the only cheap alternative to rail, with its attendant problems. For example, the recent increase in the price of cement and the disparity in the pump price of petrol are attributed mainly to the high cost and tedious road distribution. Obviously, an efficient rail system will eliminate the high transportation cost that shoots up production cost.

All efforts to revive the rail system have been futile. The latest attempt by the Obasanjo administration through a 25-year rail development project that was unveiled in 2002 is fraught with inconsistencies. With hazy funding and apparent misplaced priorities, the first phase of the project, which is supposed to connect Lagos and Kano at a cost of $8.3 billion appears to have screeched to a halt.

It is noteworthy that the Yar’Adua administration is reviewing the contract. Instead of relying for funding on the Excess Crude Account, the present administration prefers to explore alternative sources of fund.

With funding as the main obstacle, it is improper for the government to continue to hold on to its monopoly of the rails. In 2000 the FG curiously refused the offer of a private Canadian firm to build the Lagos-Abuja rail network. Similarly, the intention of the Oodua Investments to link the six South-West states with a rail network was thwarted by an unfavourable legal framework.

The Minister of Transportation has taken the right step by adopting a public/private sector approach to the revival of the rail system. But the present legal framework does not encourage private participation in the sector. Meaningful progress in the rail sector will only begin to unfurl when the National Assembly summons the political will to repeal the Railway Act in order to allow for massive injection of funds from private investors.

The government should emulate the examples in Europe and Asia where private investors run railways with ease and stress-free efficiency that is not matched by any other mode of transportation.


November 26, 2007 | 7:58 AM Comments  0 comments

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