February 4th, 2009
The railways are in the news again with another attempt to resuscitate them by government but challenges abound. NKECHI ISAAC spoke to Rowland Ataguba, a Diaspora Nigerian railway expert.
Do we really need a railway system and why?
Yes, I think we do because the railways are an integral part of the logistic chain which can act as a complement and competitor to the other modes. It therefore helps to improve transport efficiencies in the movement of bulk over appreciable distances. It is also more energy efficient and statistically safer than the other modes of transport especially in an age of increasing awareness of environmental issues. Urban metros also play a significant role in easing road congestion in large urban centres like Lagos. Railways can also act as a spur for economic activity as there is evidence to suggest that the development of urban centres such as Kaduna, Lagos, Kano, Kafanchan, Jos, Ilorin, Enugu, Port Harcourt, Ibadan etc was influenced by rail. As a competitor to the other modes, it provides an impetus for efficiencies and value for money.
What challenges do you foresee in the governments efforts at resuscitating the Nigerian railways?
The challenges are plenty but are not insurmountable. The external environment throws up political, economic, sociological and technological challenges, while the internal industry environment presents people, systems and organizational challenges. They all need to be addressed concurrently.
What are some of these challenges in the external environment?
Well, the political risks have to do with certainty and continuity. One of the banes of our railways is that over the years various governments have not pursued a coherent approach to the running of the service. So there is a risk that cometh the future, another government could come along with a different agenda or worse be disinterested. Fundamentally, it is good governance that is the key political challenge. The economic risks concern the global financial crisis and the fiscal management regime. At first, we were advised that Nigeria was immune from contagion and you just wondered how with globalisation. Sociological challenges refer to how societal ills impact on our development. Corruption is a major sociological challenge. If corruption is widespread in our society, then the railways cannot be immune from it. Finally, we talk about technological challenges in the sense that we are still not fully utilising the available technologies. If you visit some government departments, you will be embarrassed by the manual filing systems and inefficiencies that pervade.
What about the internal challenges?
These are personal to the railway industry. We are faced with the lack of sufficiency in the numbers of knowledgeable and experienced railway men schooled in the running of a modern railway. This arises from the fact that we have not had a railway service of any note in this country for too long. Then you would question the existence of the appropriate institutional framework going forwards. What business model to adopt. Have we settled the debate of running a public sector railway or are we going for a strategic partnership with the private sector? If PPP as canvassed, what concession model? Vertical Integration can bring about quick wins but also has downsides in creating private monopolies. How about the concession tenor? Railway assets typically have a life of 30 years. Why would any concessionaire agree to invest in rolling stock with a 30 year life for a 5 year concession? What about safety and competition or anti trust behaviour and how do we regulate them? How do we reclaim the strategic vision which derailed on inception? The law needs changing to enable states and private entities to run their own rail services. When will this be completed? There are also micro challenges relating to the unavailability of industry data such as comparative analysis of the quantitative benefits of railway compared to roads, commodity/traffic flow statistics about loads moving per mode and freight rates charged, road counts and truck cargo payloads, cost structure of the railway industry, what influences shippers choice of mode etc. All militate against good planning.
So what steps do you advise government to take?
Well, if care is not taken, government could become a victim of its own ambitions. With 11 years to the year 2020 which is a milestone year, we need to hurry up. This is compounded by the current global financial crisis as some of the venture capital funds to help develop a viable PPP market are no longer available. Notwithstanding rail infrastructure makes a poor business case comparatively, so government will find that it needs to fund a lot of the required investment itself. A number of projects are about to be restarted or undertaken. For instance, the suspended modernization project is about to resume we hear, and we also understand that the Warri-Itakpe line is to be completed this year and there are moves to embark on a rehabilitation of the existing narrow gauge infrastructure. What we must do is to manage these projects effectively and efficiently. There is only one way to do this, we call it goal directed project management. After instituting effective project management, we then need an overlay of Programme Management to co-ordinate the projects into a coherent delivery system that brings about synergies and maximal benefits realisation. This way the key interfaces and interdependencies between projects can be managed.
But which projects have project managers.
Lets not confuse them with the contractors site management team. Contractors have taken to calling their senior site management people project managers which is confusing, because they do not fulfil one key function, which is client representation. When I refer to Project Managers, I am referring to the intelligent and assertive client. The man who approves the payments to the consultants and contractors. The man or woman who has overall responsibility to the client for the delivery of the project. The captain who must sink or float with the ship. He needs to have the training and experience of managing stakeholders and multi disciplinary teams. Importantly, he must have an appreciation of strategic issues.
Are you suggesting that projects have not been properly managed on the railways?
Is the Pope catholic? Is it not evident but pinning down responsibility for failure is another matter. If we practised effective project management, this would be easy to do because we would have single points of management responsibility.
So with good project management, we can expect to see the resuscitation of the railways?
Yes and with Programme Management too plus we effectively manage the other challenges in the external environment. Reviving the railways is a long haul and developing a world class railway is likely to outlive this government with a two term maximum of eight years. So there are things that the government must do to ensure that its railway aspirations endure and are achieved. Get the public to take ownership for instance. Help to build robust public institutions. Fight corruption relentlessly. Manage the economy prudently. Encourage and deepen the use of modern technology in the public sector etc. Importantly, government must live up to its contractual obligations. We should not enter into contracts and then try to walk away from them. It is the greatest dis-incentive to investors.