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Transformation Agenda

R.E.M.I.N.D.E.R. NRC, private investors to begin joint railway services

The Nigerian Railway Corporation has finally opened its doors for private sector participation as it unveils plans to link the nation’s airports, seaports and other areas by rail, RASHEED BISIRIYU reports

The much talked about commercialisation of railway operations has commenced in earnest as potential service providers are now being considered to take part in key business areas.

The commercialisation process, taking place alongside the modernisation of existing railway facilities and the construction of new lines, is expected to lead to total privatisation of the railway transport system.

Although the Managing Director, Nigerian Railway Corporation, Mr. Adeseyi Sijuwade, said on Sunday that the involvement of private investors in the running of train services would only start by the end of the year, a number of auxiliary railway services had already been outsourced to private operators to enhance their operational efficiency.

The Federal Government had indicated plans to link the rail transport mode to all state capitals, other major cities, airports and sea ports.

But it had attributed the poor performance of the 115-year old NRC over the years to poor funding, insufficient locomotives, coaches and wagons.

The corporation has also groaned under obsolete machines and workshop equipment with porous rail corridors, inadequate and ill-maintained level crossings since the exit of the colonial masters that built the railway primarily to serve the purpose of moving Nigerian resources to the ports for exportation to their home country.

But Sijuwade said the NRC had decided to outsource railway support services to private firms as the first phase of the commercialisation programme, adding that the decision had enabled the corporation to focus on its core business of running trains.

He listed the auxiliary activities as onboard cleaning of passenger trains, cleaning of train stations and onboard catering services.

He also told our correspondent on Sunday that the selection of a Transaction Adviser for the entire Public-Private Partnership programme would be concluded at the end of the month.

The Transaction Adviser, he stated, “Will work with NRC in structuring the PPP transaction and then commence the selection process for private sector partners for warehousing; supply and management of coaches and wagons, starting from end of this year.”

Facility management of all major train stations, ticketing service, as well as park-and-ride are other activities listed under the outsourcing plans in the first phase of the PPP deal.

The NRC boss also hinted of plans to remodel the train stations before the end of the year as part of the second phase of the PPP arrangement.

“Again, it is expected that remodelling and redevelopment of major railway stations will start before the end of the year,” he said.

A document showing details of the PPP programme and obtained by our correspondent on Friday at the NRC head office, Lagos, indicates that the supply and management of passengers coaches, goods trains, loading and off-loading of goods and warehousing will be executed under the design, build, maintain, operate and transfer arrangement.

The second phase also accommodates the plan by General Electric to set up a locomotive assembly plant in Nigeria.

The Federal Government and GE had earlier signed a Memorandum of Understanding on the project.

Already, a railway bill that will give legal backing to the entire PPP arrangement has been approved by the National Council on Privatisation, the NRC boss said, adding that it would soon be sent to the National Assembly for consideration.

The document also showed a number of actions already taken or approved to make the PPP programme work.

They include the refurbishment of 350 wagons and 120 coaches and procurement of 20 oil tank wagons in 2012; the placement of order for additional 20 oil tank wagons for delivery in July 2013; procurement of two units of 100-tonne telescopic cranes, one of which has been fully installed and the other awaiting clearance at the port.

Others are procurement of four units of 60-tonne overhead cranes, three rail inspection vehicles, five rail recovery vehicles and four CNR locomotives that will arrive in July.

Six units of 68-seater modern coaches and two sets of diesel multiple units are also expected to be delivered by December.

Apart from the Lagos mass transit train, the weekly Lagos-Kano train service has just been restored following the rehabilitation of the entire narrow gauge rail line with the renewal of its signalling system.

And barring any change in programme, three contractors currently working on the rehabilitation of the eastern rail tracks at a cost of N67.3bn are expected to complete the project by the end of the year.

The contractors are ESER Contracting and Industry Company Incorporated of Turkey; China Gezhouba Group Corporation Global Projects Nigeria Limited and Lingo Nigeria Limited.

The NRC boss also named some other approved train services scheduled to commence soon to include the Port Harcourt-Aba passenger train; Kano mass transit service (currently being test-run); and Inland Container traffic train; and Nigerian Breweries traffic train.

Others are CRCC ballast (APQ-APL) train; CCECC ballast (SU-EBJ) train and Total Petroleum traffic train.

It was also learnt that out of the 15 different railway projects listed for execution between now and 2015, 13 would receive attention this year.

Top on the list of projects in this year’s budget is the construction of the new Lagos-Ibadan rail line on standard gauge.

The plan is to take the new line to Kano running alongside the narrow gauge.

The Minister of Transport, Senator Idris Umar, had last year announced that the contract had been awarded at the sum of $1.5bn.

This is the first time at private business operators will be involved in the railway.

For about 115 years, the business of running railway services had been the exclusive preserve of the Federal Government as enshrined in the Railway Act of 1955.

The new legislation, according to Sijuwade, will replace the old Railway Act.

This, he stressed, would take care of funding and effective management.

According to him, more funding is required to complete the rehabilitation of the western and eastern rail lines, and continue the modernisation projects, which the government cannot shoulder alone.

The procurement and rehabilitation of old locomotives and other rolling stock, along with maintenance equipment rehabilitation, are also vital things that will keep the railway operation going and in line with practice of other civilised nations, he added.

– See more at: http://m.punchng.com/business/financial-punch/nrc-private-investors-to-begin-joint-railway-services/#sthash.Ol6oviN2.dpuf

About TransformationWatch

TransformationWatch is an online news site founded by Henry Omoregie It is focused on keeping tabs on the Transformation Agenda set out by the Nigerian leadership in the Local, State and Federal Governments. My mission is to observe, analyze and report milestones or slowdowns in promised service delivery in all the facets of governance in Nigeria (2011 and beyond). Readership is open to all Nigerians and friends of Nigeria alike, regardless of Tribe, Religion or Political divide. We are all in this together

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