• January 9, 2018
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By Chris Agabi

International railway expert Rowland Ocholi Ataguba joins the railway debate from London via this email interview. He speaks on the many challenges confronting the rail projects in Nigeria, how Nigeria could save close to $1b from the coastal rail project and more. Excerpts

Rowland Ocholi Ataguba

Governor El rufai and Senator Ben Bruce have sparked a controversy over who should take the most credit for the Abuja-Kaduna railway. Can you clear it up for us please?

The standard gauge railway modernization programme was conceived and initiated by the Obasanjo government. That is fact. All the Presidents from Obasanjo to Jonathan deserve some credit for contributing to  the  programme but each created problems in different ways. That too is fact.

How so?

The contract for the Lagos-Kano standard gauge was signed  on 30 October 2006. You could query why Obasanjo left it to the twilight of his 8 year tenure to kick off such a major enterprise. That was problem number one. Even the Abuja Light rail contract was signed in May 2007, a few days to the end of Obasanjo’s tenure and you know what happens when government changes hands in Nigeria. Most of the last minute contracts are reviewed and usually cancelled by the succeeding government. The contract was to be largely funded from the excess crude account.  As you know, the ECA belongs to all the three tiers of government, the FG, States and LGs, and Obasanjo secured their agreement to draw it down for the project.

So what was the problem?

Well, no sooner had Obasanjo left in May 2007, than the State Governors prevailed on Yar Adua to dishonour the prior agreement. Some of them allegedly argued that the proposed Lagos-Kano railway line did not even pass through their States and wondered why they should be paying for it. Others claimed that the contract sum was suspiciously high and they had more pressing needs in their States. So Yar Adua shared the money with the other tiers and tried to cancel the contract hence stalling it for two or so years but that was problem number three. The contract provided for an advance payment of about $2bn to be made to the contractor but Obasanjo only paid $250m. So the contract was already in breach before it commenced.  That was problem number two but the  contractor mobilised to site and started surveys and intermediate design presumably expecting the balance of the advance before it was hit by the perfect storm of Yar’Adua.

Was the present Minister of Transportation not among the Governors then?

Yes but the FG share of the ECA inherited by the Yar’Adua/Jonathan governments could have built the railway and don’t forget that railway is still on the exclusive legislative list.

So what did Yar’Adua do?

He was to discover that cancelling the contract would be problematic diplomatically and financially. So he decided on a phased approach. Abuja to Kaduna as phase 1, Lagos to Ibadan as phase 2 and so on. The implications for cost and time is what we are now seeing  such that a 4 year contract is in year 12 and has not achieved 20% completion with costs invariably escalating. That’s problem number four.  

So what problem did Jonathan create ?

He signed Lagos-Ibadan in 2012 and didn’t fund it. Buhari is now funding it as well as the link to Apapa port. Jonathan also did precious little on the Railway Bill for the 8 years that he was in office until he was about to leave in 2015. Remember that he also signed the Coastal rail contract in the twilight of his tenure without due process, preliminary design or a funding plan. The Coastal railway is not even in the original masterplan and we are now bound to a $12bn contract with no money to execute it. It is scandalous and against the law. The alignment that was selected is also not optimal perhaps because of his undue haste to award the contract.

What is wrong with the alignment of the Coastal railway?

Duplication and waste. I would go Lagos-Benin-Onitsha-Enugu, and Warri-Yenagoa-Port Harcourt-Uyo-Calabar. That gives you an optimal Lagos to Calabar alignment. I would also price it at much less than the agreed contract sum. You see the Central line from Warri to Ajaokuta will intersect this line at Agbor, so you have a Lagos to Warri connection through Benin and Agbor. That saves you over $1bn which you can use to build Onitsha to Enugu and even probably go as far as Abakaliki  if you take out Yenagoa to Otuoke which adds no real value to the line.

Coastal Rail Alignment

What about the proposed Kano-Katsina-Jibiya-Maradi line which is being routed through Daura? What value does Daura add? Is that not the same thing?

Not really because Kano to Jibiya is part of the LAKAJI corridor, a significant trade route but we have not even signed a contract for that one yet. Look, we are borrowing huge amounts of money to build railway infrastructure and don’t seem to care that it needs to pay its way. How can we sign agreements and don’t know how we will pay for it or sign agreements and ignore its provisions? Why are we making a mockery of ourselves in the international community?

How about the Lagos Mass Transit where it is reported that there is an organised cabal pocketing rail fares?

Yes but these stories are not new and clearly nothing has been done to stem the racketeering. The NRC has never pretended a capacity for revenue protection. It is not in their nature as they can always go to the government to get money or through deficit financing. It’s like British Rail of yore. The private sector operating the railway is the only way out.

But the narrow gauge line is being concessioned to GE.

That’s the plan  but we have had many dates that have come and gone.

So what is stalling it?

Well, railway concessions take time to negotiate and when you look at the NRC with poor records and poor asset conditions, you would certainly have your work cut out. Neither can we pretend that the NRC is happy to give up its exclusive franchise but that is a narrow mind set. They have had over 50 years to demonstrate that they can run our railways and have failed repeatedly. They should focus on developing railway assets and let those with an incentive and resources to run the railways well to do so otherwise there will be no railways left for anyone to work in. The greatest problem to my mind is that no one is held accountable for all the infractions that waste public money and have kept our railways prostrate. In the Nigerian public service people apparently get promoted instead.

But it is argued that GE is not a railway operator.

They are in the railway business and have assembled a credible team. They won the bid.

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