• 28 April 2024
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By Daniel Adaji | 28th April 2024

Chief Executive Officer of Bethlehem Rail Infrastructure Ltd in London and Chairman of the Rail Work Group of the Nigerian Economic Summit Group, Rowland Ataguba, speaks about rail business in Nigeria with DANIEL ADAJI

What is the core mission and vision of your company, and how does it align with your values?

A vision that is vibrant and ensures that railway takes its rightful place in the logistics value chain. At the moment, our railway system is old-fashioned; our laws are out of date and no longer relevant in our modern society. So, they need root and branch reform, and we need to restructure the railway environment to make it more attractive for private investment. My vision is to see a vibrant rail system in the country where core railway businesses are done, rather than a civil service approach to business.

How can the government handle challenges and setbacks in the rail industry?

It is a tough call. Old habits, they say, die hard. The railway industry has operated in a certain culture, and it is very much a civil service culture; it is not enterprising, and therefore, there has great difficulty in behaving like a typical commercial enterprise. But it is a business in competition with other modes of transportation, like the roads, which is privately operated. It throws up challenges of business culture and orientation that we need to overcome.

How can the government enhance safety and efficiency in rail operations?

In a nutshell, unbundling the Nigerian Railway Corporation and bringing private operators to the centre stage is critical to tackling the challenges of poor management in the industry.

Also, competition has a way of separating the boys from the men. The serious players know that their business is dependent on their safety record. And of course, competition drives efficiency. So, combining these, you’re onto a winner.

What needs to be done to foster collaboration and communication across different departments within the rail company?

It is going back to the culture of the organisation. What we have at the moment is a government bureaucracy, and is a culture of pushing paper around, back and forth. Going around in cycles and getting nowhere fast. The private enterprise culture is very different. It is more goal-oriented and more driven. It is important to bring these into the commercial aspects of the railway business and leave government with regulation and asset management while those hardcore activities where they have a strategic advantage for businessmen to do. That separation is central and critical to our progress.

What role does sustainability play in your rail company’s strategy?

Sustainability is the lifeblood of the business. You can’t start something and not think of how to sustain it. That is the reason our railway has struggled. Because they’re not sustainable as a result of the old-fashioned business model, it has not worked in over 60 years.  So, it is not going to work.

How do you stay informed about industry trends and advancements?

As a player in the industry, I am deeply involved, so I get leads from official and unofficial sources. We do have a railway publication that is local to Nigeria, even though it carries international news. Such media have helped us stay abreast of the happenings in the industry.

The Abuja light rail transport project aimed to address transportation difficulties faced by FCT residents and satellite cities. How will you assess the project?

The rail mass transit system is provided for in the Abuja masterplan. As with all things Abuja, it is beautiful in concept and provides for intermodal intra-city transit. Abuja is one of the few cities in the world that was designed completely before its construction, and its designers drew inspiration from Brasilia and Canberra, the capitals of Brazil and Australia. The city was designed to accommodate fewer than 2 million residents, but its population, including the satellite towns, is now more than 7 million.

The objective is to create a transit system that meets the highest standards of excellence and harnesses efficient operations and the best management practices of the private sector. Fundamentally, to ensure that Abuja is an excellent place to live and work, a capital city of which Nigerians would be proud, and to project Nigeria’s status as Africa’s giant and economic powerhouse.

Residents complain that the first phase of the project sited at Idu station is far from where the people are; could there be reasons why the project was sited that far?

The Transportation Centre, which is in the Central Business Area near the National Hospital and the Idu Station, has major transport interchanges with the national railway linking the Lagos-Kano and Warri-Abuja heavy rails. They are like Kings Cross, Waterloo, Victoria, or Euston Stations in London, where buses, mainline railways, and metro lines meet. The Abuja-Minna part of the Lagos-Kano line will go to the Transportation Centre through Idu. The Warri-Abuja line will also enter Abuja on the same alignment, joining it at Gwagwalada. It is the missing link at present, which is why travel to and from Abuja originates and terminates at Idu. For the time being, before these lines are built and put into service, the metro is supposed to bring intercity travellers into Abuja from Idu and vice versa.

The problem is that the metro, which for now should take passengers to Idu to catch the mainline train to Kaduna and other intercity destinations, is not working. The network is also underdeveloped and has not been extended to where most Abuja residents live, which are the satellite towns, and from where they could travel to the Transportation Centre. Thus rendering it redundant. Notwithstanding, the Airport to Transportation Centre route should be able to see a decent level of patronage if only trains ran on it.

Based on the original intention for the project, if fully completed, residents would enjoy some ease in the transportation system in Abuja. What should be done to ensure the project achieves its purpose?

We need to go back to the drawing board and do some serious stock-taking. The government needs to listen more, not to itself but to those with knowledge. There is an urgent need to preserve what has been invested to ensure that it is not all lost to pilferage and vandals. We are watching helplessly as our commonwealth is being frittered away on the altar of apparent official indifference.

The metro is an essential transit service. It is designed to enable and support the orderly development of the city and to facilitate movement within the urbanity. Abuja is slowly descending into traffic chaos like Lagos. This was not the plan, and there is much that we can do about it.

Abuja is still a small city, albeit a growing one. The metro is not primarily designed to be profitable; otherwise, the farebox would be prohibitive, but generally, a private operator under a subsidy regime is more efficient than a government-run operator. This was well understood in the conceptualisation. A private operator will provide better value for money, while civil servants are more suited to regulation. Private operators take calculated risks and find efficient ways of getting things done so they can make money. The FCTA needs a transit authority. That is the starting point.

The Abuja Light Rail has been in the news. Do you think the light rail can thrive in Nigeria?

It is a tough call because of a lack of information about its current status. Based on the public pronouncement by the government, we will give them the benefit of the doubt that they will get it working, but whether they can sustain it is a matter of time.

A lot depends on what business model they adopt. If the model is private sector-oriented, then it is a good start. But don’t forget that this is a system that won’t make money. So, even if the private sector comes in to operate on the basis that they will do it far more efficiently than a government organisation would. The government would still have to pay them what we call the public service obligation, otherwise known as a subsidy, for them to keep the service going.

The important thing with train services is that you must keep improving. You must run because commuters rely on the reliability and consistency of the operation of the rail to go about their activities, being able to get a train whenever they need to.

Is that to say that the rail service in Nigeria is more of a social service than a business-oriented venture?

That is a very concise observation. The reality is that the original concept of the Nigerian railway provided for a service that generated sufficient revenue to cover its management, and the government was not intended to find money from other sources to keep it going. But the reality is that the government is funding it. It is increasingly difficult to find additional money to fund it, and that is why it collapsed. The NRC has been bankrupt twice in its history. If a new government comes in and decides the headache is too big and believes it can rely more on the road infrastructure than the rail, when that happens, the services go under because of the numerous needs the government has to meet.

It is best to allow utilities that can run as businesses to do so. We have done that in electricity, telecoms, and water, so the outstanding utility is the railway.

So, are you suggesting that the NRC should be unbundled and privatised?

In a nutshell, that process is underway. We have had a constitutional amendment that has opened up the railway so that subnational governments can participate. We need to repeal and reenact the Railway Act. That requires regulation, and so the regulatory component of the NRC needs to come out and stand independently. Creating more agencies may be against the sentiment of the Stephen Oronsaye report on reducing agencies, but this is essential.

What message do you have to the government about the railway?

Restructuring of the railway is long overdue, and it needs to happen now.