Rail transport is usually the most suitable mode of transportation for heavy traffic flows when speed is also an advantage because of the lower cost per person per load as the train load increases.
In Nigeria, rail transport accounts less than a half per cent to the GDP of the country. Although rail has always contributed a tiny proportion of value-added in transportation, its share of value-added continues to decline because road transport (freight and passenger) has virtually taken over all the traffic previously conveyed by rail.
The railways in Nigeria are regulated and operated by the Nigerian Railway Corporation, which was established by the government in 1955. It inherited a rail network, from British Colonial masters, which was designed in a north to south fashion to facilitate the flow of goods, such as groundnuts, cocoa and cotton, from the inlands to the coast, where they were shipped to Britain.
During this period, Nigeria’s single-narrow-gauge railway line was constructed and for many years was the only mode of freight movement between the northern and southern parts of the country. The current rail network consists of 3,505km of narrow gauge tracks and 276km of standard gauge tracks which connect Ajaokuta, when the country’s steel mill is located to Warri, a major oil city and transit point for goods through its port (Delta Ports).
The narrow gauge tracks cover two major rail lines: one connects Lagos on the Bight of Benin and Nguru in the northern state of Yobe; the other connects Port Harcourt in the Niger Delta and Maiduguri in the north eastern state of Borno.
Years of neglect and lack of investments have severely hampered the capacity of the rail network to act as a mass transit vehicle. As part of its plans to revitalise the nation’s railways, the government is seeking to privatise the Nigerian Railway Corporation (NRC). Under the privatisation plan, the government will grant concession to private sector companies, who would be expected to provide train service and maintain the infrastructure. Three separate concessions of 25–30 years are expected to be given out for the western, central, and eastern regions.
Under the plans, the NRC through its subsidiary, Railway Property Company Limited, will also sell it nearly 200 million square meters of lands, landed property and other fixed assets.
However the government could go a lot further by separating the railway operations in to two broad categories – railway infrastructure and train operations, and form a railways regulatory body which regulate activities in the railways sector. Also proceeds from the privatisation process should be put into a National Railway Fund which will be used to finance railway projects.
Railway Infrastructure Company (RIC)
The ownership and maintenance of the national railway infrastructure will be transferred to a newly established special purpose vehicle (SPV) which will be partially owned by the Federal Government and private investors. The initial lifespan of the SPV will be for thirty years with the purpose of updating and maintaining the national rail network.
The RIC will also be responsible expanding the network around the country and building new rail links as air-rail links which connect the countries airports to the centre of cities they serve, similar to the Paddington Heathrow Express in the UK. It will also be responsible for traffic control and signalling, and the construction of new train stations on the railway network.
The RIC will also take ownership of all the existing train stations and warehouses owned by the NRC in the country, which it could operate itself or lease out to train operating companies, who will also provide passenger and freight train services out of the any of the train stations in their command.
The newly formed RIC will have the following streams of revenue:
• Track Services Fees: These are fees that the company will charge train operators who make use of its tracks for passenger and freight services.
• Station and Warehouse Leases: This includes the revenue accrued by leasing out train stations and warehouses to train operators.
• Government Subsidies: Because of the capital intensive nature of rail track maintenance and new line creations, the Federal Government, through the National Railway Fund, will subsidise some of its operations. The amount of subsidies given will be based on the performance of the company in the previous year. The review of subsidies would be done on a yearly basis until the company is at the stage where it does not require government subsidies to run its operations.
The RIC will be subject to regulation from a newly created railway board, which monitor its performance and will pass down fines in areas in which the company has failed to meet standards or agreed milestones.
For the time being, it would be more economical to keep and update Nigeria’s narrow gauge tracks, rather than convert them to the standard gauge tracks. Narrow gauge tracks tend to be slower, carry less load and far less adaptable than the standard gauge tracks.
However narrow gauge tracks involve significantly less civil engineering costs and countries like Japan, Australia, New Zealand and South Africa have shown that with the right calibration and design, it is possible to get almost the same performance of standard gauge tracks out of narrow tracks. 200-car trains operate on the Sishen-Saldanha railroad in South Africa, and Queensland Rail's tilt train is presently the fastest train in Australia, despite running on narrow gauge tracks.
Train Operating Companies (TOCs)
These will be private sector companies which will operate passenger and/or freight train services on the national rail network. In order to offer train services, potential companies will have to bid for a franchise license from the railways regulatory body, which will grant them a government backed monopoly to operate services on certain routes for a specified duration.
The TOCs will responsible for providing their own rolling stock (locomotives, railroad cars, coaches and wagons). The rolling stock will be have of an agreed standard and quality to avoid train companies from using old and unsafe equipment to ferry passengers.
The TOCs will also agree to lease a number of train stations from the RIC for passenger services and warehouses for freight services. These facilities will be located along the route in which they operate. Under the lease agreement the TOCs will be responsible for the following:
• Maintenance and upgrade of the buildings and land on which the facility is located.
• Security at the facilities.
• Train ticket payment collections.
• Commercial activities at passenger stations, such as the renting of shop spaces.
• Parking fee collection from other TOCs who might decide to park their own trains at the station overnight.
Railway Services Companies (RSCs)
The services units of the NRC which provide direct services to the railway industry will be sold to private companies. The benefit of selling the units is to aid them focus on their core business and improve the efficiency of the services they provide.
The services units include:
• The workshop services unit: The unit mainly provides maintenance of rolling stocks.
• Printing press: This unit is responsible for the printing of the all the tickets currently used on the national rail network.
• Catering services: This unit presently provides catering services on the long distance train services.
The proceeds from the sales of these business units will be paid directly into the National Railway Fund.
Railways Regulatory Board
The Federal Government will establish a new railway regulatory body which will oversee all activities in the Nigerian railways sector.
The major responsibilities of the body will be to
• Carry out economic, environmental and safety regulation of the railways sector.
• Work cross the borders with Nigeria’s neighbours to ensure harmonisation with the country’s rail network.
• Monitor performance of the RIC and its agreed milestone attainments.
• Negotiate franchise agreements with TOCs and monitor their performances.
• Assist state governments in establishing intra cities mass transit rail networks.
• Investigate major incidents and accidents that occur on the railways.
• Monitor observance of public service obligations
• Conflict resolutions within the rail network system
Intra City Light Rail Systems
While state governments will be responsible for the development and deployment of a light rail system within their states, they would however be able to apply for financial assistance from the National Railway Fund.
Interested state government will submit their proposals to the Fund which will make a determination into the amount of money it plans to contribute towards the project. Every submission will be treated on a case by case basis as to determine the economic viability of the project and its likely social and environmental impact.
The following cities have already started work on their own light rail system or announced plans to do so:
• Lagos
• Abuja
• Calabar
• Port Harcourt
Winding up the National Railway Corporation
Once the national rail infrastructure, the train operation and support services have been be taken up by the companies as described earlier, the National Railway Corporation will be wound up as a legal entity and the remaining operational and non–operational assets sold off. The proceeds of the sale will be added to the National Railway Fund.
The rolling stock could be sold to the TOCs or other companies and individuals express an interest in those assets.
The Federal Government should transfer all the assets held by the Railway Property Company Limited, a subsidiary of the NRC, which manages nearly 200 square metres of non-operational lands and landed properties held by the NRC, to the National Railway Fund, which will either sell or grow these assets.
While it would be desirable to ensure that all members of staff of the NRC be retained or reassigned by the new companies taking over, it is more practical to expect that a only a certain percentage would be rehired as a means of making these companies more efficient.
National Railway Fund (NRF)
The National Railway Fund will be established primarily to provide financial assistance to the railway sector. NRF will be registered as a company limited by guarantee and operate independently of the Railways Regulatory Board and Railways Infrastructure Company.
The Fund will be administered and managed by a Board of Trustees representing various interests in the public and private sector and will be completely isolated from the management of the Railways Regulatory Board and Railways Infrastructure Company.
The Fund will be required to release quarterly reports on the how much of its funds are being spent and how is being spent on any of the operations is it financing.
The NRF will be responsible for:
• Providing subsidies to the RIC to assist it in the maintenance and upgrade of the national railway network.
• Provide financial assistance to state governments looking to develop their own light rail networks.
NRF will be financed by:
• Proceeds from the privatisation process of the NRC.
• A railway tax passed on to passengers and companies who make use of the national railways. The tax will be 5% of the cost of a train ticket or freighting goods by rail.
• Returns on investments made by the management board in the global capital and money market.
• Grants from governments, organised private sector and international donors.
Posts
Very interesting suggestions
ReplyDelete