By Onyedika Agbedo, Benjamin Alade (Lagos) and Joke Falaju (Abuja)
12 December 2020
Nigerians are gradually being reintroduced to rail transport following the determination of the Federal Government to rebuild the country’s rail network and even construct new ones. Although past administrations since the restoration of democracy had attempted to revive Nigeria’s railways, whose decline symbolised the rot in the country’s infrastructure, President Muhammadu Buhari has set his administration apart from its predecessors with its achievements in the sector so far. It made railway modernisation its cardinal project and has not relented ever since. In 2018 the President projected that by the end of 2021, the country would have a standard gauge railway across the main North-South trading route.
“We understand that this interconnectivity will improve the country’s economic competitiveness as targeted under the Economic Recovery and Growth. So for starters, I have directed that every port must have the complement of rail infrastructure and our projection is that by the end of 2021, we will have standard gauge railway across the main North-South trading route,” he said.
Given the huge decline in the country’s foreign exchange earnings as a result of the crash in crude oil price since the administration assumed office, it needed to borrow to execute the rail projects. In 2017, it secured a $6.1 billion loan from China Exim Bank for the construction of Calabar-Port Harcourt, Lagos-Ibadan, Lagos-Kano rail, and Lagos to Kaduna railway and another $1.5 billion counterpart funding for the Lagos-Ibadan project. The administration has taken other loans to fund the projects, which form part of the N31.08 trillion-sovereign-debt burden that is currently weighing heavily on the country’s fiscal position.
Nevertheless, Nigerians today enjoy ‘world-class’ train services on the Abuja-Kaduna route and Lagos-Abeokuta-Ibadan route. But they consider the fares too exorbitant and beyond the reach of the masses.
Last Monday, the Nigeria Railway Corporation (NRC) announced the commencement of train service operations on the Lagos-Abeokuta-Ibadan standard gauge rail. But it had only one passenger on board.
The newly introduced service, according to the corporation, provides fully air-conditioned train services in the Economy, Business and First Class categories. However, the high fares announced by the Minister of Transportation, Rotimi Amaechi, apparently scared potential passengers away hence the low patronage that greeted its take off. Amaechi had last week announced a price regime of N3, 000 for the Economy, N5, 000 for the Business and N6,000 for First Class.
Independent investigation by The Guardian, however, showed that the fare list for the standard gauge railway from Lagos-Abeokuta-Ibadan zone 1-2 are as follows: 24-seater coaches (N6, 000), 56-seater coaches (N5, 000), 68-seater coaches (N3, 500), and 88-seater coaches (N2, 500). For Lagos-Abeokuta ticket, Zone 1 only, the fares are a 24-seater coach (N4, 500), 56-seater coach (N3, 500), 68-seater coach (N3, 000), and 88-seater coach (N2, 000).
Passengers of zone 11 of the standard gauge railway from Abeokuta to Ibadan are charged between N2, 000 and N600. On the Abuja-Kaduna route, findings also showed that the NRC has stopped adhering to the COVID-19 protocol of social distancing in the train service, but has maintained the fare of N3, 000 for Economy coaches, N5, 000 for Business Class coaches and N6, 000 for the First Class which it introduced when the rule was being observed.
The NRC had in July 2020 raised the fares on the route from N1, 300 and N2, 500 to the current fares citing the need to adhere to COVID-19 protocols and maintain social distancing in the seating arrangement in the coaches. This was greeted with a lot of uproar by Nigerians who saw the action as a demonstration of government’s insensitivity to the plights of Nigerians.
Amaechi had while justifying the move then argued that government was left with no choice than to increase the fares due to the need to observe social distancing in the train to prevent the spread of coronavirus.
He said: “We need to maintain social distancing in the train. Taking 56 passengers instead of 88 passengers in each coach means you are losing money from 25 passengers. And instead of the N120 million before, we will start making less than N60 million; our running cost is about N90 to N100 million.
The only two options we are left with are either to increase the fares or government subsidises. We gave government the opportunity but there is no money so government can’t subsidise. At the beginning, we were subsidising, making N16 million in a month and our operation cost was N56 million. So, we were subsidising N40 million on monthly basis to run and government does not have that kind of money. So, passengers will have to bear it.”
Historically, it is believed that rail transportation is cheaper than road transportation among other advantages such as shorter travel time and safety of travellers. Nonetheless, in advanced countries where train services have become very effective, the fare is usually subsidised.
According to Wikipedia, “many countries offer subsidies to their railways because of the social and economic benefits that it brings. The economic benefits can greatly assist in funding the rail network. Rail subsidies vary in both size and how they are distributed, with some countries funding the infrastructure and others funding trains and their operators, while others have a mixture of both. Subsidies can be used for either investment in upgrades and new lines, or to keep lines running that create economic growth.
“Rail subsidies are largest in China ($130 billion) and Europe (€73 billion), while the United States has relatively small subsidies for passenger rail with freight not subsidised.”
Fullfact.org also reported that the United Kingdom’s direct subsidy of the railways was around £5 billion per year, an increase of over 200 per cent since “privatisation”.
In Kenya, the Mombasa-Nairobi Standard Gauge Railway (SGR) is a 480 kilometre-long line that connects the port city of Mombasa with the capital city of Nairobi. Construction began in 2013; parts of it were completed in 2017 at a cost of approximately USD$3.8 billion. An additional $1.5 billion extension to the tourist hub of Naivasha was completed in 2019. While the railway operates passenger services, its primary function is to improve freight transportation to and from the Port of Mombasa.
Prior January 2019, the government of Kenya used to pay subsidies on rail transportation specifically for children aged between three and 11 years.
A passenger travelling to Kaduna from Abuja, who simply identified himself as Safawa, lamented that while the government has declared that it has no money to subsidise rail transport in the country, the NRC has continued to charge the same fares it charged when social distancing was being observed in the trains.
He said: “Seating arrangement in the train is like what it use to be. There is no social distancing whatsoever. In fact, when I was coming to Abuja, they (NRC officials) brought a lady to seat in the middle of the three-row seat where I sat. She refused but they still brought another person.”
He also lamented the increasing rate of ticket racketeering in Rigasa Station, Kaduna State, saying the train officials don’t sell tickets until an hour to the scheduled time. This, he said, gives room for ticket racketeering as passengers rush into the station almost at the same time to ensure they get on board.
He added: “Kaduna to Abuja train service is N2,600 but I had to give N3,000 to the boy that helped me buy the ticket. After buying the ticket, we would have to rush into the station to catch the next train because if care is not taken, you will have to wait for the next train.”
Another commuter who simply identified himself as Abubakar also said government does not have any moral justification to raise the fares by about 150 per cent. He argued that if they were maintaining social distancing on the train and passengers had to pay for two seats, the fare should not be more than N2, 600. He noted, however, that the spate of insecurity in the country has left them with no choice than to travel by rail to their destinations.
“For instance, I am travelling to Kano. I could not get a straight flight from Port Harcourt to Kano so I came into Abuja since 9.00am. I have been waiting at the train station since 10.00am for the 6.00pm train. If the security situation in the country was good, I would have gone by road; but due to the fear of being kidnapped, I have to wait for the train,” he stated.
The Managing Director of Bethlehem Rail Infrastructure, Rowland Ataguba, also insisted that the sustenance of high fares on Abuja-Kaduna train service while social distancing is no longer being maintained was a breach of trust.
Ataguba also noted that the key to stemming ticket racketeering was e-ticketing. “This is well known but unfortunately the NRC has failed to implement it so far while commuters have continued to be exploited and abused,” he stated.
He pointed out that the present state of affairs in the rail sector was a sad reflection of our public service, noting that, “it may endure until we reform the railway sector, deepen the participation of the private sector, separate regulation from operation and restructure the railway environment.”
In his reaction, Managing Director of NRC, Fidelis Okhiria, explained that the fares on the Abuja-Kaduna route had not reduced because the corporation was yet to adjust the price on the ticket.
“If you have ticket of N6,000 and you sell for N5,000 how do you account for that? So, we are trying to re-arrange the ticketing,” he stated. The Guardian however observed that Abuja to Kaduna by road was still a booming business for road transporters as passengers that could not go through the hassle of waiting for the train or paying high fares patronise them despite the insecurity challenge.
But the high fares appears to have had a spiral effect on road transport fares on the route, as the fare that used to be within the range of N1,000 to N1,200 has gone up to N2,000 at the Jabi motor park.
A transporter, who does not want his name in print, disclosed that despite the insecurity situation on the Abuja-Kaduna road, at least 30-50 cars and buses still leave the park on a daily basis.
Commuters on the Lagos-Abeokuta-Ibadan route also appear not ready to pay the train fares.
“Ibadan to Lagos N2500? They must be mad! Train used to be cheaper than road transport. Go to Dubai; go to United Kingdom; come to America. Someone living in ring road will still cab to Ologuneru and obviously take another cab from drop off in Lagos to wherever you are going. Why is Nigerian government just being heartless like this?” queried one Ajayi Juwon.
To Olufemi Adeniji, “they think Ibadan is Lagos or Abuja. They should have done free test run for some weeks before fixing the price. I am sure they will soon be forced to reduce it to N1,000. That is when the Ibadan people that I know will patronise it.”
Notwithstanding the outcry by Nigerians against the high fares, a lecturer at the University of Greenwich, London, Dr. Emmanuel Mogaji, said train transportation had often compared with air travel in terms of cost, stating that road transport would likely be cheaper.
Mogaji said: “Time is money. Train can take five hours and bus will take 10 hours; that is in a more developed country with a good road network where people can drive (instead of using bus), which can be cheaper.
“We need to recognise that train transportation is a different mode. We are gradually being introduced to it, so passengers should not be discouraged with high cost.
“We need to recognise that train transportation is new to many people in Nigeria. We have seen it but again many people have not benefited from it. Therefore, I will not expect the price to be discouraging.”According to him, government should encourage people to take the train by subsidising the fares, at least for now.
“NRC management should get people on board, change people’s travel behaviour and let them see the benefit of train transportation. Then we can start considering increase in price or making it more expensive than road.
“I think the cause is that those involved want to eat their cake and have it. This is something new, though expensive and therefore they want to make their money or get returns on their investment in the shortest possible time whereas they should be looking at the long-term prospects.”
On its part, the Nigeria Union of Railway Workers (NUR) said that the fare regime introduced by the NRC management on its new Lagos-Ibadan standard gauge train was not commuter-friendly.
The trade union noted that the fare should be made affordable to attract the patronage and trust of the commuting public. Speaking on the loans used to fund the rail projects, Secretary General of NUR, Segun Esan, said the government should be mindful of the fact that the subsisting terms on the loans were in compliance with the provisions of the Fiscal Responsibility Act, 2007.
Esan argued that the loan with which various railway infrastructure were built were clearly project-tied, saying the projects must be viable and managed in a manner that they would generate revenues to repay the lenders.
To achieve this, NUR said the Federal Government through the Ministry of Transportation and NRC must wear the robe of a shrewd capitalist. He explained: “The capitalist businessman should not be expected to be any friendly or socially considerate of the end users or consumers of the services provided or driven by loans.
“Certainly, this is the price the masses will pay so as to make the train service self-sustaining and efficient enough to indemnify all loans taken to build it.
“Conversely, I think the onus is on the Federal Government to make the impact of the loans quite subtle and almost unnoticeable on the masses especially the commuting public by making the fare regime really people-centric and largely affordable so as to attract huge traffic offer to the new railway while simultaneously making Lagos-Ibadan Expressway less busy and free of heavy traffic, safe and long lasting.”
Esan further advised the Federal Government to make new Lagos-Ibadan train service the preferred choice for travellers and freighters by drastically bringing down the fare regime and increasing the running frequency of the trains so as to optimise earnings and be able to service the loans.
He cautioned the NRC management against framing the Lagos-Ibadan train service along the operational context of Abuja-Kaduna train service, which is presently enjoying steeped patronage by high net-worth users who were ‘confined’ to travel by train or flight because of the security challenges associated with travelling along the same axis by road.
Esan noted that he would not be surprised if Abuja-Kaduna train service drops any moment the government addresses the security challenges in that axis.
“NRC and its supervising ministry should remember that the stuff of prospective passengers expected on Lagos-Ibadan trains does not exist in the same luxury, sophistication and economic bracket as the Abuja-Kaduna passengers who are known to be well off.
“However, it is not too late for the NRC to get back to the drawing table with a view to reworking the fare regime that already has been greeted with public criticisms,” he said.
Reacting to the call for fare reduction, the Lagos Railway District Manager of the NRC, Jerry Oche, urged Nigerians to patronise the train and experience it first. He said the rail coaches were not comparable to vehicles, stressing that they were more comfortable. He argued that the charges were in ranges, in a bid to ensure that everyone would be able to make a choice.
With the poor patronage recorded at take off last Monday, the days and weeks ahead would show if his persuasion had a positive effect on Nigerians or not.
‘Paying The Cheapest Is Not Always The Best To Sustain A Good Service’
Prof. Samuel Gbadebo Odewumi is a professor of Transport and Environment, and the Dean, School of Transport, Lagos State University, Ojo. He spoke with DANIEL ANAZIA on the prevailing high train fares and other issues in Nigeria’s rail sector.
What is your take on the railway remodeling projects going on in the country?
RAILWAY is a bulk mover of people and goods. The effects of the absence of functioning railway are noticeable on rapidly deteriorating roads and the congestion occasioned by trailers and tankers. A functioning rail link to Apapa port would have saved the nation the agonising gridlock. Some routes have become operational. For instance, the Lagos-Ibadan and Abuja-Kaduna, but the masses are complaining that the fare is high compared to what they pay for road transportation. What do you think about this?
The high cost of fares has to do with the social distancing which means they are operating at 50 per cent passenger capacity. I believe this is quite unnecessary. They should operate full capacity with other COVID-19 protocols observed. Besides, I guess they are trying to discourage ticket racketeering whereby because it is cheap many crooks are making a kill by buying up the ticket to sell at several times the official price. This is the sad fact on Abuja-Kaduna rail.
Is it right for the public to pay so much for an infrastructure that was built with their money?
The railway was built with borrowed money from China. There must be a repayment plan or else we will have to pay with our dwindling petrol dollars. This is not a validation of the price arbitrarily fixed, but we must not always think that infrastructure built should not be run on a sustainable basis. If not, very soon it will run down for lack of fund to maintain it. Paying the cheapest is not always the best to sustain a good service.
We borrowed money to build it? Should we continue to borrow money to run it? Just imagine that Abuja-Kaduna is running at a loss despite heavy patronage. Our journalists should investigate this to expose whatever is going on there. You may indirectly be favouring racketeering if the business facts are not well explained.
But this borrowed money from China will still be paid by the masses?
The masses presently cannot pay, that is the truth. It is expected that we will pay back with petrol revenue, which is no longer there. Which segment of the masses is contributing for the repayment? Don’t get me wrong, I believe that the price was arbitrarily fixed, that with the jettisoning of social distancing and increase in trips, the price will come down. And with the price coming down patronage will go up. But there must be a balance such that racketeering will not become the order of the day like the Abuja-Kaduna route, such that the money that should go legitimately to sustain the service goes to crooks. There is also this default mode of our media always playing to the gallery by appearing to be on the side of the masses without diligent investigation to adequately inform the masses and guide the government. Thus, the low easy roads are taken, which later becomes unsustainable and the service goes down and the masses suffer more in the end.
As a professor of transport, given what you know about the operations of railway globally, what do you think government will do to ensure sustainability?
The best approach is to outsource the management. Transport management and operations globally is partly run as a social service; it can hardly survive strictly as business venture. But the worst form of corruption and greed by our public servants compounds our own situation. It is sad but true that our capacity to manage any of the public transport modes is grossly inadequate on account of our corrupt tendencies. The other painful part is the lack of publicity and public enlightenment on the roll out of the Lagos-Ibadan rail. It was just a casual announcement in Abuja by the minister, no special press conference and tour. That explains the extremely low patronage at the take off. This shows the lack of concerns for the economics of their operations. Also the single trip in a day is terribly uneconomical and that’s another reason for the high cost. There will be economy of scale if the price is moderate and the patronage is huge.