The planned privatisation of the entire transport sector as announced last week by the Bureau of Public Enterprise (BPE) has been described as a welcome development by stakeholders who also listed issues that must be addressed along the way, writes Francis Ugwoke
It was cheering news early last week when the Bureau for Public Enterprise (BPE) announced its plans for the privatisation of the entire transport sector. Although, the details of the privatisation plans were not disclosed by the BPE, many believe that the areas the bureau has in mind may be the rail and the waterways transportation. The BPE had carried out the privatisation of the nation’s seaports through a concessioning programme in 2006. It has done the same in the aviation sector. Similarly, the road transport sector is dominated by the private sector investors. While announcing the plans, the Director General of BPE, Mr Benjamin Dikki, said that the proposal for the privatisation of the entire transport sector is currently receiving approval processes for the seven draft bills by the Federal Executive Council (FEC). The bills will be forwarded to the National Assembly for passage after FEC’s approval.
The current process, according to Dikki, is not unconnected with what happened in the ports where the issue of regulation was not settled before the ports were concessioned. Dikki said this time, the important issue of legal and regulation would be settled first before any section of transport is privatised. He said, “we don’t want a repeat of the mistake we made during the port reform. Before embarking on the reform of any sector, we will ensure that the legal and regulatory frameworks are in place. That is why for the transport sector, we have all the seven draft bills undergoing approval processes by the FEC after which they will be transmitted to the National Assembly for passage. From the assurances, we are getting from the various stakeholders, these bills will be passed soon”.
Rail and Need for OPS
As much as the Nigerian Railway Corporation (NRC) has done in making rail services available to many Nigerians, the current situation in the country is such that many states do not have functional rail services. Even where there are rail services, the number of Nigerians requiring the services are more than the capacity the NRC could afford so far. Reports have it that Nigeria needs as much as one million rail coaches for the system to cope with the demand by passengers. This is considering the statistics released by NRC in 2013 which showed that five million passengers travelled by rail that year. The report had estimated a sizeable increase for rail passengers by last year. Sources said the current situation is one in which there is weekly express passenger train from Lagos to Kano, as well as Offa to Kano. There are also less than 20 daily mass transit trains for Lagos metropolis. The NRC had early last year taken delivery of a set of modern coaches for long distances, including some air-conditioned diesel multiple units of mass transit trains for short runs within the metropolis.
The NRC had imported 40 new oil tanks, wagons for lifting petroleum products, wheat, cement, laterite and other types of cargos. But with this record, many believe that Nigeria needs more coaches and engines to reach many parts of the country. The importance of rail cannot be over-emphasised in a country which has very poor road network and menacing gridlock. This no doubt explains the importance which government attaches to the involvement of the private investors. When the nation’s ports became difficult for the Nigerian Ports Authority (NPA) to handle in terms of terminal cargo operation and the needed equipment, government thought it wise to concession the sector to the private sector. With decaying infrastructure and the huge capital required in addressing the issue, the best decision was to bring in the private investors, notwithstanding the challenges that followed the exercise. For the rail transport sector, the need to involve private investors has been long overdue.
Viability of Sector
With increasing gridlock on the roads nationwide, the rail system could be an alternative for many if it is well organised. Rail remains a very secure mode of transportation, safer than any of the transport modes. What this means is that it will be well patronized by many Nigerians, especially those in Lagos who have to go through hell because of the traffic jam every morning and evening. But the question is whether government will develop more rail links or just depend on the existing ones which are certainly not enough. In Lagos for instance, there is need to develop more rail links for wider coverage. This will attract the private investors the more.
Rails for Ports
Many believe that one of the ways to address the traffic jam around Apapa metropolis is simply a good rail system linked to the various terminals. For now, there is only one link to the whole of the ports in Lagos. That is the Apapa rail link. This is certainly not enough. Incidentally, the train assigned to the link is not operating fully. The train lifts containers and other items about once in two weeks. This explains the reason for the congestion in the ports. With many of the terminal operators unable to provide needed cargo handling equipment to handle containers and even position them for examination, there is bound to be congestion in the ports. This is even worsened by the inadequacy of space in the ports where containers can be kept. In other advanced countries, the train takes the containers to a more spacious place where the owners can take after completing the clearing process. In the case of Lagos, stakeholders had recommended Ikorodu Lighter Terminal where they said could be where containers can be transferred to with trains to check congestion at Apapa. If private operators come into rail services, they can acquire more locomotives for the Apapa port route. They can do the same in other ports in Lagos and other states if the rail link is constructed. What it means is that while the government builds the railways, the private sector can go into provision of the locomotives or trains to run on them.
One of the transport modes is ferry services. This is a sector where the federal government is involved in with the Nigerian Inland Waterways Authority (NIWA). But NIWA is finding it difficult to meet needed capacity. NIWA which is a federal government parastatal under the Ministry of Transport has over the years suffered neglect. And for this reason, it has not been able to meet the needed capacity. In most of the riverine areas, water transportation has often been taken over by few hustlers who are ill-equipped for the business. Many passengers have died as a result. This can change under a reform process, depending on the regulatory framework that will be adopted to encourage investors.
Views from Stakeholders
Stakeholders who spoke to THISDAY said that the decision of the federal government to privatise the entire transport sector is a welcome development. But they advised that the BPE must prepare a good legal and regulatory framework that will encourage investors. A maritime economist, Mr John Okezie, was of the view that in addition, government needs to provide an enabling environment for investors in rail and water transportation services. Okezie said that there should be tax exemptions for those importing either locomotives or water craft for public transportation.
He also added that government should create more rail ways throughout the country as well as regular maintenance and dredging of the various waterways for ferry services to thrive. Similarly, maritime lawyer, Mr Emmanuel Ofomata also called on the BPE to engage legal experts in designing a legal and regulatory framework that will stand the test of time. Noting adequate legal and regulatory framework during the port reform exercise, Ofomata was of the view that the bureau should do a good work and avoid being stampeded on this important national issue.