By Roland Oby Ogbonnaya | 25 February 2023

ROLAND OGBONNAYA looks at the operational challenges of the Nigerian Railway Corporation (NRC), and the recent call by the Minister of Transportation, Mu’azu Jaji Sambo to unbundle the organisation for optimal functioning

 Historically, the construction of railway lines began from the Iddo area with extensions made along the Lagos route with stops at Ota, Ifo, Aribajo, Papalanto, Abeokuta and Ibadan between 1896 and 1901. However, the development of the Southern Nigeria railway was delayed due to limited finance. 

According to reports, the proposals linking Benin, Sapele in 1906 and Ibadan with Oyo in 1907 did not materialise, as records indicate that the Lagos railway terminal at Iddo was constructed to connect Lagos Island with Lagos mainland and serve as a transit stop for trains using the railroad bridge constructed along two major road networks that link the island with other parts of Lagos such as the Carter and Denton bridges. 

However, “in 1904, the colonialists decided to construct the railroad linking Ibadan with Osogbo and Ilorin in 1907. It was approved to begin construction from Ilorin to Jebba.” 

In 1978, the Olusegun Obasanjo administration engaged the services of an Indian group, Rail India Technical and Economic services to operate the railways even when the experts met only a few functional locomotive engines in the system. 

According to reports, by the time they were leaving in the early 1980s, the number had increased to 173. This contract also led to it becoming a corporate body with perpetual succession and a common seal with the power to sue and be sued in its corporate name, and to require, hold and dispose of movable and immovable property for the purpose of its function under the Act. 

The invention of the rail transport system redefined the movement of people and goods across the globe as it is convenient, safe and cheap. The system enables seamless transportation that engenders robust economies, anchored on human resources, and services within limited regulatory intervention by the government or its bodies. The rail transport system creates jobs and enhances the growth and development of cities. 

Employments are created through the building of tracks, furniture foundries, coaches and others. Agricultural produce, clothing, animals, petroleum products and equipment can easily be transported within and across countries with the railway system. Rail transport had immense impacts on the industrial revolution in Europe and America and it was a viable alternative to steamboats that were employed for traveling through canals and rivers. 

According to research, “before the development of modern highways and airports in Nigeria, railways were the only means to efficiently travel and move goods from one point to another”. This created the leeway for the modest development witnessed from colonial times and before the early 1970s. The railways in Nigeria were conceived and constructed from Lagos to the furthermost parts of the Northeastern part of the country to open the hinterland of southwestern Nigeria along its corridor. 

“An act establishing the railway system was enacted by the parliament in January 1955 and the railway became a statutory corporation known as Nigerian Government Railway,” Oguchi, Chinweuba Benjamin said in a report. He observed that “this act was followed by the “Nigerianisation of the corporation in 1960 after the attainment of independence”. 

The resuscitation of the railway which began with former President Goodluck Jonathan is today a signature achievement of the President Muhammadu Buhari (rtd.) regime. Those trains are the banner the Buhari regime proudly waves in everyone’s faces as proof of their efficacy in the past eight years. They celebrate the railway and credit Buhari’s regime with building “infrastructure.” 

In recent times however, there has been the clamour to unbundle the corporation as the organisation as it is now is unwieldy and cannot operate optimally. The Minister of Transportation, Mu’azu Jaji Sambo lent his voice to the argument on Thursday. The Minister of Transportation, who made the call for the unbundling of the Nigerian Railway Corporation (NRC) in line with the vision and objectives of the Government’s current reforms in the transportation sector, said as it is presently constituted, the Nigerian Railway Corporation (NRC) cannot operate optimally, thus necessary reforms and unbundling have become imperative. 

The Minister who was addressing the management team of the Ministry of Finance Incorporated (MOFI), led on a visit to him by the CEO, Dr. Armstrong Katang, charged MOFI to drive the unbundling of the NRC to make it more economically viable while offering world-class services to Nigerians. 

“One of the things I will like to see as the Minister of Transportation, through MOFI is the unbundling of the Nigerian Railway Corporation (NRC). There is a Committee set up to unbundle NRC and I will urge you to work with the existing Committee”, he said. 

The Ministry of Finance Incorporated (MOFI) was incorporated under the provisions of Sections 2 and 3 of the Ministry of Finance Incorporated (MOFI) Act of 1959 as an asset holding company under the Federal Ministry of Finance. MOFI is the sole manager of all Federal Government investment interests, estates, easements and rights. The Minister made reference to the reforms implemented in the ports and the benefits these have brought, noting that such should be carried out in the railway sector. 

“The Nigerian Railway Corporation (NRC), the way it is currently, is the way the ports were prior to concession, prior to the reforms of 2005. Today, even the Nigeria Ports Authority (NPA) workers are happier about how NPA is today compared to how it was prior to the reforms. This means the reformed NPA is generating more revenues to support its operations and also support its workforce and its pensioners”. 

The Minister who assuaged the fear of job loss as a result of the unbundling said, “I don’t want the NRC staff to see the unbundling of the NRC as a threat to their jobs. If we have a better performing NRC, then we are going to have better salaries for its workers, better working conditions for its workers, more revenue for the Federal Government and therefore the ability to even build more rail networks. 

Sambo pointed out that the issue of encroachment on railway property will soon be a thing of the past as “MOFI was berthed for a specific reason and that reason is for the Federal Government to take control of its assets and create optimum value for these assets”. 

The Minister of State for Transportation, Prince Ademola Adegoroye, at the event, extolled the capabilities of the Managing Director, of MOFI, Dr. Armstrong, saying he has full confidence that the MOFI team will deliver on the job. 

Also speaking, the Permanent Secretary, Dr. Magdalene Ajani, noted that the MOFI team being made up of young and intelligent people has satisfied the yearning of Nigerians to have young people in positions of responsibility. She assured the team of the cooperation of the Ministry in their assignment. 

Speaking earlier, the Chief Executive Officer of MOFI, Dr. Armstrong Katang, stated that the visit was to discuss how to create a more effective and efficient partnership between MOFI and the Ministry of Transportation. He said the areas that have been identified for collaboration with the Ministry of Transportation include enumerating and valuing the Nigerian Railway Corporation to ensure that its value is captured in line with the current realities. 

According to him, other areas included enumerating and capturing other critical assets within the Ministry especially its infrastructure assets, and establishing a task force with representation from the Ministry of Transportation and Ministry of Finance, with clear terms of reverence to help with the identified assignments. 

Abimbola Adelakun 

Other advantages in the unbundling of the corporation are enormous. It is noted that the security threat and possibilities of metal theft are not the only threat to the railway project but unbundling the corporation will check not only the security threats but also other challenges. “It is also susceptible to internal forces of government corruption and bureaucratic inefficiency. Our corrupt leaders too, who should at least give the project some room to flourish, will award spurious and hyper-inflated contracts. 

“For instance, during the exchanges of blame that attended the Abuja-Kaduna abduction incident, we learned from no less than the former transportation minister, Rotimi Amaechi, that he had proposed surveillance equipment to the tune of N3.7bn be installed but was turned down. The Federal Executive Council that denied the contract explained that they did so because the proposal smelled like a fraud.