FG Orders BPE To Privatise Railways | Independent Newspapers Limited
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FG Orders BPE To Privatise Railways

Posted: May 8, 2015 at 2:24 am   /   by   /   comments (0)

•Advises Buhari To Continue $500m Abuja Rail Project

By Chesa Chesa,  Abuja


As part of efforts to ensure that the Nigerian Railway Corporation (NRC) becomes self-sustaining, relying less on government for survival, the National Council on Privatisation (NCP) has directed the Bureau of Public Enterprises (BPE) to begin the process of transferring it to private sector investors.

The exercise is to be undertaken in collaboration with the Nigeria Infrastructure Advisory Facility (NIAF), which has committed to funding the consultancy for developing of the roadmap and framework for the concession of the NRC rail tracks.

Mr. Alex Okoh

Mr. Alex Okoh

A statement by Alex Okoh, BPE’s Head, Public Communications, said on Thursday, that the exercise is part of the government’s “railway reform, restructuring and privatisation programme.

The objectives, he said, include providing a framework for private sector led growth through expanded domestic and foreign investment; while improving NRC’s ability to provide adequate, safe, reliable and efficient rail services.

Okoh said the privatisation was one of the decisions reached after the presentation by the BPE Director-General, Benjamin Dikki, at the April 16, 2015 meeting of the Council in Abuja, in line with the Public Enterprises (Privatisation and Commercialisation) Act, 1999, which scheduled the NRC for privatisation. The NCP in 2002, he recalled, also approved the its concessioning to private operators to provide freight and passenger railway services using the vertical integration model.

“The decision to reform the railways was borne out of the government desire to avoid the collapse and eventual shut down of the railways, generally regarded as a loss making but socially and economically imperative to the nation. In view of the funding challenges facing the future of rail in Nigeria seems dependent on the efficiency and professionalism, which the private sector can bring to improve railway operations,” the statement added.

A new Railway Bill, one of the eight reform bills recently approved by the NCP and Federal Executive Council (FEC), is currently before the National Assembly for passage into law.

It seeks to, among others, repeal the NRC Act of 1955; “provide the appropriate market design and legal framework for the implementation of government’s reform programme; separate the roles of policy making, regulation and operation; provide a platform for the introduction of private sector concessionaires and promote competition in the provision of railway services nationwide.”

Government had following the lack of funds, shelved the modernisation project, directing that the existing network be rehabilitated and concessioned to private operators after the bureau had through the World Bank funding in 2005, engaged the services of CPCS Transcom as Transaction Advisers to advise in the concession of the rails. The firm had completed about 80 per cent of the assignment, including the concession of the Central Railways (Itakpe-Ajaokuta-Warri line which terminates at Ovu) and the due diligence on the entire rail network before the contract was suspended because of the proposed modernization of the network, which was to replace the existing network with wider gauge.

The rehabilitation of the Railway system includes track spot renewal of Lagos to Kano and Maiduguri to Port Harcourt lines, supply of 25 new locomotives to boost existing locomotive power base of the corporation, upgrading of carriage and wagon workshops, re-equipping the workshops, supply of service support, strategic rebranding of the corporation, rehabilitation of stations and marshalling yards.

Meanwhile, President Goodluck Jonathan, in Abuja on Thursday, expressed confidence that the incoming Muhammadu Buhari administration will continue with government’s efforts at reviving and expanding the nation’s railway network. He intends to brief the president-elect on the issue before the May 29 handover date.

Jonathan who spoke after inspecting the ongoing works at the Abuja Light Rail project and formally commissioned the Abuja Airport Road and Kubwa Expressway in the federal capital, stressed that a robust railway network is needed to ease the cost and hassles of transportation.

He thanked the Federal Capital Territory (FCT) authorities and the Chinese Civil Engineering and Construction Company (CCECC) for bringing the project to fruition; and congratulated Abuja residents who will enjoy the facility.

His words: “I emphasise the need to develop an effective mass transit system in the country.

“We cannot talk about mass transit using taxis, small cars and small buses even the luxury buses. It will be too expensive, until our rail system works; that is why we are emphasising on inter-city rail and intra-city light rail systems.

“Of course, this government is leaving on May 29, but definitely the incoming government will have to continue. This is a noble project, it will benefit Nigerians, especially residents of the FCT.

“I am quite appreciative of the level of completion, and I am quite impressed. I have been wanting to come and inspect this project for a very long time but it has been so challenging in terms of my commitments.

“I think this period I really need to so that when I am having conversation with the incoming President, I know exactly what to tell him.

“I have seen it myself. I have seen the level of completion and of course, we know the usefulness of this project for us in terms of easing the movement of people in the federal capital territory. I have to congratulate Nigerians for this project.”

Before the President and his entourage embarked on a train ride to Idu terminus, Minister for FCT, Bala Mohammed, disclosed that the entire stretch of the rail line will be completed in August.

He said all materials for the job are on ground and that the Idu Station will have a training centre, ticketing and waiting hall, shops and kiosks, platforms as well as overpass to the national rail network.

There will also be control rooms for the power supply, communications and signals; as well as escalators with design for the physically challenged persons.

The $500 million Abuja Light Rail project has three lines going to Abuja Airport, Kubwa and Kaduna.

Mohammed thanked Jonathan for the encouragement towards financing and completing the project.

”You were able to get us the $500 million loan which we have accessed and have started to draw down and you gave us $20 billion from Sure–P to be used as counterpart funding

“Right now we have taken up to 61 per cent of the sum. We do not have so much of financing challenges except for the next fiscal year which has been accommodated in the budget.”

The Minister said the Airport and Kubwa Expressways are over 90 per cent completed and their expansion to 10 lanes has drastically reduced travel time for commuters from and into the city centre.

“This project is driven by your grace with a robust financial plan that you bonded N150 billion for the project and that is why the time line has been easy to comply with and we have been able to take it to 98 percent.

“The only remaining portion that is not completed is the bridge behind the Aso Villa. Otherwise, everything has been delivered and we are trying to look at the challenges of financing because we are owing the contractors about N10 to N15 billion on the two roads.”

The President promised that government would fulfil its obligations on the debts.

“These projects have improved the face of Abuja tremendously and people who come to Abuja are full of praises because the roads are really making Abuja to look like a real modern city.

“We are quite pleased with the progress of work, we will do our best to see that the commitments of government are met”, he assured.