Leadership (Abuja)
Rowland Ataguba
12 January 2009
opinion
This paper reviews the place of the railways in Nigeria's national development. It considers options for the rehabilitation, modernization and expansion of the network and the challenges largely based on the experience of the transformation of British Rail. It also considers public private partnerships (PPP) as an appropriate procurement model for funding public infrastructure and the role of the discipline of project management in pulling it all together and delivering strategic objectives.
Importantly, it asks questions about public debate and the role of a key stakeholder - the user. In the first chapter, I set out the background to the socio political and economic pressures, and philosophy underpinning some of the changes that took place in the railways in the U.K and Nigeria in particular.
In the second chapter, I highlighted the nature of the problems confronting the Nigerian railways. My view remains that the problems are beyond just the lack of investment but more to do with systemic failure within the internal and external environment of the railway organisation which has perversely accounted for its degenerative existence. What I have termed a failure of strategic and project management.
In this third chapter, I begin to consider some of the pre-requisites for developing solutions by visiting some available business models and methodologies for addressing the problems of funding and delivering change. This includes a review of the reformation of railways in Europe, Latin America and Africa.
The changed role and circumstances of the railways in Nigeria over the last three decades has seen it move from a situation where it was carrying a high share of traffic to one in which its market share has plummeted to a reported 1% of the transport sector. Railway assets have steadily deteriorated and the quality of service has more or less collapsed. The railways are therefore no longer contributing to resolving the transport problems of Nigeria.
The essence of the Nigerian narrow guage system are two lines running inland from the coast on either side of the Niger delta. The western route from Lagos to Kano, opened in stages between 1898 and 1915, and the other, the eastern route from Port Harcourt to Kaduna junction where it meets the western route, opened between 1914 and 1926. Three major extensions were subsequently constructed, to Kaura Namoda in the northwest and Nguru in the northeast, both completed by 1930 and a long branch from the eastern line to Maiduguri.
The Nigerian railway 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.
In 1978, RITES of India were brought in to manage and rehabilitate the system, which continued until 1982. During the succeeding seven years, there was again a steady deterioration until 1988, when the Nigerian Railway Corporation (NRC) was declared bankrupt. Following the compulsory redundancy of about 25 percent of the workforce, the remainder then went on strike for six months, effectively shutting the system down.
Brig Samuel Ogbemudia (rtd) was appointed Sole Administrator in 1989 and succeeded in reviving the railways but, on his departure, matters again deteriorated, reaching what was thought as its nadir in 1993, when only 157,000 tonnes and just over half a million passengers were carried.
In 1992, a standard-gauge line was constructed to link the steel works at Ajaokuta to the iron ore works in nearby Itakpe. The line is being extended to connect to the steel plant in Aladja, near Warri and the port, now known as the central route. This project (as well as the Ajaokuta plant) is years behind schedule and grossly overspent. Following severe damage to finished sections of the uncompleted new line caused by heavy rains, repairs are reportedly being undertaken but a timetable for the completion of the line is as yet unclear.
Another round of rehabilitation of the legacy narrow gauge lines, part funded by a grant from the Chinese government was to follow in 1997.
This was to rehabilitate the infrastructure over a five-year period as a prelude to privatization. It was then expanded into the controversial "modernization" contract for the Lagos-Kano, western route for $8.3bn which has stalled and is under review by the Yar'Adua government.
By 2005, after several re-organisations, passenger services had declined to four departures weekly from Lagos, of which two went to Kano, one to Jos and one to Maiduguri while from Port Harcourt, four trains every week ran to Kano (i.e. two per fortnight), one per week to Jos and one to Maiduguri.
As at 2006, freight volumes had crashed further to 50,000 tonnes while passenger volumes "improved" to one million passengers but was nowhere near the numbers it carried in its heydays. While the NRC had employed about 45,000 people between 1954 and 1975, the head count was now down to under 7,000
In late 2006, the Obasanjo government decided to transform the entire existing narrow gauge (1,067mm) network to standard gauge in the twilight of its tenure. The NRC claimed that the rail system was suffering from a lack of political will by the nation's politicians, not conceding that it had any part of the blame..
In July 2008, the Accountant-General of the Federation, Alhaji Ibrahim Hassan, told a Senate Committee that since 1999, his office had released a total of N967 billion to the Ministry of Transportation, of which N124 billion went to the railways.
In a document "Transport Sector and Milestones Planned for 2008" , the Ministry of Transportation outlined the Ministry's vision for the Railway as to rehabilitate the existing lines via private sector participation in the funding and operations of the railway lines, encourage intermodalism by extending the railway lines to Tin Can Island and Onne Ports and also by establishing Inland Container Depots (ICD's) at strategic stations along the line, ensure that the railways became a veritable tool for relieving the heavy duty cargo tonnage on the roads, reform the railways by unbundling the current institutional set up to ensure that the Regulator was distinct from the service provider, articulate a long term vision for the railways to be embodied in a Master plan also known as the 25 year strategic vision, ensure the passage of the Railway Bill and the establishment of a regulatory framework for private sector participation in railway operations.
The role of the railways in much of Africa also has changed greatly in the last three decades and is likely to change just as much in the next few. In comparison with recent times, most of the railway systems carried a substantial share of their country's traffic thirty years ago, because competing road transport lacked good infrastructure and may have faced restrictive covenants. Some railway customers of the time were well established large businesses who were locked into rail either through physical connections or if they were parastatals, through policies which compelled them to use a co-parastatal.
In the intervening period, the economies of African states in general, and transport in particular, have become more liberalized. Stronger competition from road transportation has ensued as road infrastructure improved comparatively, leading to significant loss of market by rail.
The railways in sub-Saharan Africa, as in much of the rest of the world, has taken a long time to respond to their changed circumstances. Few of the other railway authorities, other than Spoornet of South Africa perhaps, invested significant sums of their own, or their government's funds, in rehabilitating and renewing infrastructure. Such investment as there was, other than for purely mineral movements, usually came from bilateral and multilateral donors. As this typically arrived after the damage had been done, and in some cases not at all, the African continent is littered with railways that can best be described as "prostrate" or walking wounded."
A helpful initial step perhaps would be to clarify what the terminologies, 'public services', 'public sector', and 'public organization or institution' which we use rather generically actually mean. How they relate to the railways in particular and how public services are delivered elsewhere, in say the UK.
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