Stimulating Economic Activities with Lagos-Ibadan Railway


Apart from easing the nightmare that passengers face, on daily basis, travelling from Lagos to Ibadan as a result of traffic gridlock, the rail project will promote easy movement of goods among traders, writes Francis Ugwoke

Even with the economic recession, the Lagos-Ibadan rail project will, any moment from now, kick-off. Thanks to the current arrangement, which the federal government has with the Chinese that will be involved in the funding of the project. Government is relying on a loan facility that will come from China. Already, the federal government has paid N72 billion which is required as counterpart funding on the Lagos-Ibadan rail project.

Transportation Minister, Rotimi Amaechi, had explained that with the counterpart funding paid, the rest of the money needed for the project would be provided by the Chinese. Amaechi said: “On the construction of the Lagos-Ibadan Railway, the Minister of Finance has been kind enough to release the counterpart funding in full. I think in the history of Nigeria this is first time that we are releasing counterpart funds in full so that there will be no delay since the Chinese loan appears to have been approved.”

Amaechi had indicated that the project would begin any moment from this month. And to ensure that the project is not delayed, he has appealed to the National Assembly to cooperate with the federal government by approving the $30 billion general loan as the amount required for the rail project is also part of it. According to him, “the only thing we need to do is to plead with the National Assembly to approve the $30billion loan. If you don’t encourage the National Assembly to make that approval, then, the economy won’t be making the kind of progress we want it to make. So, I will enjoin you to persuade the National Assembly to kindly make that approval because they are tied to projects.”

The Ibadan rail project was awarded at the cost of $1.5billion (N458billon). It was awarded to the China Civil Engineering Construction Corporation, CCEC and it is expected that the project would be jointly funded by Nigerian and Chinese governments.

From 2006 to Date

The rail project was the idea of the administration of former President Olusegun Obasanjo, who awarded it in 2006. Due to lack of funds, the administration did not execute the project. It was then picked up by the administration of former President Goodluck Jonathan in 2012. It was to be carried out in six phases. But again, Jonathan’s administration also failed after all the media hype. It involves the construction of a standard gauge rail line from Lagos to Ibadan.

The Managing Director, Nigerian Railway Corporation, Mr. Fidet Okheria, was reported as saying that with the counterpart funding already paid by the government, the Chinese is expected to release its own counterpart funds this month, meaning that any moment, the project will start soon. The Lagos-Ibadan rail is 156.65 kilometres. It will be double line, which by design will be the first phase of a new Lagos-Kano standard gauge line. The Transport Ministry officials explained that it will co-exist with the old narrow gauge rail line. It is expected to be completed in 18 months.

Rail Lines and Seaports

Apart from Lagos – Ibadan rail line, the federal government has also initiated other rail projects that will cover many parts of the country. The rail lines will be connected to the seaports in the country. The rail projects include those of Lagos-Calabar and Kaduna-Kano rail lines. Government had first signed the Lagos-Ibadan and Calabar-Port Harcourt rail projects after agreeing to cut the total cost from $11.917billion to $11.117billion. The Transport Minister explained that the cost was reduced after negotiating with the Chinese firm. He explained that, “the contract was awarded by the regime of former President Goodluck Jonathan for $11.917 billion. When we took over at the ministry, we renegotiated with the CCECC and we succeeded in reducing the contract sum from $11.917 billion to $11.117billion and we are able to save $800million after the renegotiation.” There is also the Lagos-Calabar rail line. Amaechi said the Chinese firm would begin the “construction of the first segment with Calabar-Uyo and Aba-Port Harcourt, and this will include all the seaports on this route. But the entire contract covers Calabar, Uyo, Port Harcourt, Yenogoa, Otuoke, Ughelli, Warri, Benin, Agbor, Asaba, Onitsha and back to Benin, Ore, Sagamu and Lagos.”

Rail and Dry Ports

One good thing about the rail projects is that once completed, it will be a big boost to the Inland Container Depots (ICDs) scattered in the six-geographical parts of the country. Many of the concessionaires have been slow in completing the construction of the ICDs, otherwise known as dry ports, due to infrastructure issues. They consider the bad state of the roads and conveying containers from any of the ports in Lagos or the east to the dry ports as very difficult without rail. But following the serious efforts made in executing rail projects, many of the concessionaires have begun more serious efforts in construction work on the sites. Modern port system without rail links has been described as incomplete, one of the reasons that the government is taking rail links to the ports very serious. The rail eliminates all the risk involved in travelling alone to far distances with the containers on trucks.

Answer to Gridlock

The rail projects when completed, as government has promised, will be a big relief for many Nigerians travelling to any part of the country. Apart from reducing the transport fare for passengers, it will be easier for movement of various goods from one part of the country to another. It will benefit traders the more as it will be easier to move their goods through train than using vehicles. It is expected to bring prices of food down as a reflection of the affordable transport fare. It will also reduce the carnage that has also been witnessed on the road. Train accident hardly occurs and this explains why it is one of the best form of transportation. In advanced countries, it is the best form of inter-state transport.