FG Seeks $166bn To Address Transport, Energy Sectors’ Needs | Independent Newspapers Limited
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FG Seeks $166bn To Address Transport, Energy Sectors’ Needs

rail, amaechi
Posted: May 24, 2016 at 5:12 am   /   by   /   comments (0)





The Federal Government said on Monday that it would require the total sum of $166 billion to meet the country’s energy and transport infrastructure needs over the next five years.

Rotimi Amaechi, Minister of Transport, who disclosed this also told stakeholders  at a public hearing on Nigerian Railway Authority Bill and National Transport Commission Bill at the National Assembly that the Federal Government and General Electric have concluded arrangement for the commercialisation of the Lagos-Kano railway project.

He said: “Besides privatisation, government also realised a monumental infrastructure deficit which as at 2015 stood at over $3.05 trillion in 30 years or $166 billion in five years with energy and transport infrastructure taking more than 50 percent of that need.

“Transport infrastructure alone needs a whopping $50.9 billion in five years to cover the current gap in the sector, an average of $10.2 billion per year. Currently, the ratio of funding in the sector between the public and private is 9:1. This constituted a major disincentive to private sector participation in the industry.

“In addition, it is considered imperative to intimate this committee that full government ownership and management of these agencies had inherent restrictions for third party funding, undue government interferences; burdensome bureaucratic structures and over-bloated work force amongst others,” Amaechi said.

He argued that privatisation of railway would conflict with public interest, stating that “governments all over the world have realised that it is not best suited in ownership and management of businesses and as such considered it imperative to shift from purely government to public private partnership (PPP).

“The policy, therefore, is intended to guarantee efficiency, sustainability, competitiveness and profitability. To actualise these objectives, the Federal Government had established a trajectory towards driving the model. These led to the institutionalisation of agencies such as Bureau of Public Enterprises (BPE) and Infrastructure Concession Regulatory Commission (ICRC) with the statutory power to superintend the transition of government owned concerns to the private sector under the various models of PPP”, he added.

Earlier, Speaker Yakubu Dogara while declaring the public hearing open, urged that the NRA Bill which spells out the operations and regulation of the railway sector, should be thoroughly examined, saying that “an efficient rail system is a much safer and cheaper mode of transporting goods, services and persons across the length and breadth of Nigeria.

“It will reduce drastically the damage done to our roads and highways by heavy duty trucks. Rail transportation also provides a strong foundation for industrial activities in any economy as the haulage of raw materials can be effectively undertaken though the railways.

“The current efforts by the Muhammadu Buhari administration to consolidate the revival of the rail sector evidenced by the recent presidential trip to China and the appropriation by the National Assembly of billions of naira to it on the 2016 budget, is highly commendable. It must also be accompanied with a revised up-to-date legal framework to organise and regulate the sector,” Dogara said.

Pointing out the objectives of the National Transport Commission Bill, Nicholas Ossai (PDP, Delta) noted that effective regulation of the transport sector would provide a level playing ground for private sector players, attract funding and new investments, encourage competition among major players and reduce loss of about 30 percent revenue accruing to the federation due to non-integration in the transport sector.

Ossai, who authored the bill, told stakeholders that 80 percent of total national income and household income goes into transportation but have no meaningful impact on the standard of living of the people.

He said two percent commission of the revenue realised would be set aside for the commission to ?use as its operational cost outside its normal budgetary allocation.

Lawmakers as well as other stakeholders, who spoke in support of the bill, including ICRC, urged that the commission should not be subjected to BPP regulation, stressing that such effort would serve as disincentive to the investors in the sector.