BY ROWLAND ATAGUBA
These are then compounded by a lack of consistency and official dithering in policy implementation.
Bearing in mind that the near N5 trillion railway commitments are just for infrastructure alone, there is yet no commensurate development in human capacity in anticipation because this is government and how it works. So you award a contract to build a 200km railway line. You plan to take two years but take four, then you wait till the construction is nearly completed before you start to order equipment for operations which will take over a year to deliver and would be inadequate in any case. You have not trained anyone yet nor have a business plan nor idea of whom will operate the line in the long term. So you have built railway infrastructure but it sits idle because you don’t have the equipment or people to operate on it. You build a railway bridge across the Niger which has sat idle for the past 30 years?
The idle infrastructure then gets pilfered for clips and fixings, thus rendering it safety compromised. Then you have to award another contract to replace the stolen bits and the equipment arrives but cannot operate because the infrastructure is unsafe and is being repaired. While you are waiting for the tracks to be repaired, the equipment is used sub-optimally so that the politicians can have photo opportunities and claim bogus transformational successes. The equipment get tinkered with in the name of routine maintenance, start breaking down and crashing, and in no time are dumped or cannibalized until you have no significant serviceable source of motive power left when the tracks are ready. So you order more new equipment and the bust to bust cycle continues. This happens because this is government and how it works:
Where the survival of an executive operating in a competitive market is not due to performance in delivering tangible benefits to its customers nor profits for its owners. Where the executive spends most of his time in the political bureaucracy defending budgets or chasing government money instead of knuckling down to run the business. How then can the business survive talk less of being sustainable?
The railways competes in the national transport market where there are alternatives especially from roads which control over 95% of the market. A market with traffic turnover that is estimated at 20m tonnes of freight per annum and over 20m passenger trips per day. To survive, the railways needs at least 10% of the domestic freight market and to deliver consistent growth in profits of at least 3%. Railways currently has 0.5% of the freight market and 0.1% of the passenger market. Suffice that the NRC has not made a profit since 1964 to date talk less growth.
The two distinct railway markets of passenger and freight could not be more dissimilar. Different product, different customer types, different operations equipment and organisation required etc. They are different businesses and the NRC has historically tried to run them as one. It has not succeeded in running either successfully nor jointly.
It is given that firms operating in competitive markets such as transportation that are driven by profit produce superior performance through innovation and efficiency. These tend to be more pronounced when operating in a supportive and dynamic regulatory environment. Other key supporting infrastructure will include proper legal and learning external environment to provide skills and resources. So rather than compete for government resources, the railways needs these areas of health, law enforcement and administration, education, security etc i.e. the appropriate social and business infrastructure, to be up and doing to provide the enabling environment for railway operations.
A private operator whose survival depends on the business would ensure that his equipment is ready as the track is fixed. A working railway is a safe railway because few will venture onto live tracks to steal clips and risk being killed by a train. A private operator will quickly scale up to meet demand because he has the incentive to do so. He will provide a competitive service to gain market share. The roads sector will react in defence of their market share, improve their service, prices may fall, the customer and society benefits. This is not a magic wand though. Reform is slow, painful and requires culture change. It is also disruptive and the benefits materialise in the long run rather than instantly so expectations need to be managed.
The railway operator will necessarily focus on those services that it can perform at a comparative advantage to roads and this is for long distance haulage of freight. This is where the focus must initially be as this is where the viability of the Nigerian railways lie. It cannot be all things to all men given current internal and external capacity limitations. Sitarail in Cote d’Ivoire, Camrail in Cameroon and Transnet in South Africa are examples of private operators running public railways effectively.
Background – A Legacy of Spend and Bust:
The Nigerian Railways was created in 1912 with the merger of the Lagos Government Railways and the Baro-Kano railway. It became an autonomous public corporation created by the Nigerian Railway Corporation Act (1955).
The essence of the Nigerian railway system are two narrow gauge (1067 mm) lines running inland from the coast on either side of the Niger Delta. The existing network consists of the Western line which runs from Lagos through Kaduna to Kano and branches to Kaura Namoda at Zaria. The Eastern line runs from Port Harcourt through Kafanchan to Kaduna and also to Maiduguri from Kafanchan. The network consists of about 4,300km (including sidings). It had some sharp curves and steep gradients in a number of sections which have now been eased. Most of the network was constructed during 1898 to 1927 while the Kafanchan-Maiduguri segment was constructed between 1954 and 1964.
The system has a diagonal orientation, with few cross-country links, and connects with only the sea ports of Lagos and Port Harcourt. Since the 1960s, poor maintenance and management, inadequate funding, declining traffic and the effect of various civil disturbances, particularly the civil war, have contributed to a deterioration of the rail system.
During the 1970s, construction of some 270km standard gauge rail line between Itakpe via Ajaokuta to Warri known as the Central line was begun to link the steel plants in Warri and Ajaokuta as well as the iron ore mines in Itakpe, which to this day remains uncompleted. The contract was awarded to Julius Berger by the Obasanjo military government in 1978. It was suspended in 1984 by the Buhari government. An attempt at resuscitation was made by the Babangida government in 1990 but no progress was made as a result of compensation issues with Julius Berger.
In 1978, the Shagari government contracted RITES of India to rehabilitate and improve the operational performance of the NRC. The RITES initiative was fairly successful and saw improvements in performance between 1978 and 1982 when RITES left. Traffic volumes crashed again thereafter as the NRC’s performance could not be sustained leading to the bankruptcy of the corporation.
In 1980, the Shagari government commissioned a feasibility study including survey, mapping and design carried out by TEAM of Italy for two rail links between the Apapa port and Tin Can Island port complex and to connect to the existing rail network. Nothing further has been heard of this project. Suffice that there is no rail link to Tin Can Island 34 years on.
In 1986, a Romanian counter trade intervention initiated by the Buhari government was commissioned by the Babangida government to supply 400 container wagons, 50 guard vans, workshop machineries and equipment. The “Nairda project” which followed involved the installation of a micro-wave backbone to sustain station-to-station, train-to-train and train to-station, control-to-control-to station and train communications.
TO BE CONTINUED