Nigeria Getting Back On Track With Rail Revolution

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Israel Ibeleme

Just days before President Buhari met with President Trump at the White House, history was made in Washington, DC, with the signing of a landmark infrastructure agreement between the Nigerian Government and a consortium of multinational firms led by the American digital industrial giant, General Electric (GE). The implementation of that agreement, worth US$45 million in the first phase, will ensure that within the next 12 months, passenger travel by rail from Lagos to Kano will be faster and safer, while for the first time in over a decade, contracted and scheduled freight rail services can once again be offered.

This milestone project is the outcome of President Buhari’s single-minded determination to develop, upgrade and modernise Nigeria’s transport infrastructure, as well as the relentless push by the Minister of Transportation, Rotimi Amaechi, to fully deliver on the President’s vision.

Since Mr. Amaechi took office in November 2015, as Minister of Transportation, there has been a renaissance in Nigeria’s rail industry, in line with the President’s oft-stated vision. This planned revamp of the Narrow-Gauge Rail Network by the international consortium comprising General Electric, Transnet of South Africa, Sino Hydro of China and APM Terminals (part of the Danish Maersk Group) – after two years of meticulous planning, negotiating and contracting, offers strong proof of the seriousness with which the Buhari Administration is taking its railway modernisation ambitions.

Nigeria’s Narrow-Gauge Rail System was conceived in the 1890s and built between 1898 and 1926, with a total length of 3,500 kilometres. It consists of two primary lines – Lagos to Nguru and Port Harcourt to Maiduguri – with spur lines to Eleme, Baro, Kaura Namoda and other places.

These critical economic assets have since become decrepit, having suffered significant decline due to lack of investments in infrastructure maintenance. A few years ago, a previous administration commenced a rehabilitation programme, which saw the Lagos-Kano line come back to life. But that rehabilitation was not accompanied by corollary improvements in operations and engineering management capacity, thus failing to fully exploit the massive freight and passenger potential of the narrow-gauge network.

The Buhari administration, as part of its infrastructure development vision, has now finally taken the long overdue bold steps to modernise the rail network. On August 18, 2017, the Federal Executive Council, following a competitive procurement process, approved the concession of the Narrow-Gauge Rail System to the GE-led Consortium. The Government is advised by a multidisciplinary consortium led by the Africa Finance Corporation.

The initiation of that concession agreement is what has now finally taken effect following the signing in Washington, DC yesterday, ahead of President Buhari’s bilateral meeting with U.S. President Donald Trump on Monday.

Sources within the GE Consortium have disclosed that the first set of 3 locomotives and sixty wagons (out of 10 locomotives and 200 wagons) are ready to be shipped to Nigeria.

The benefits of this intervention are immense: increased economic productivity, job creation, private sector investment, human capacity development and much-needed world class expertise. Worldwide, rail infrastructure has been proven to reduce costs and wastage of goods; increase economic trade between farmers/miners and industry and between traders and consumers; and grow business competitiveness and increase operational efficiency.

The Narrow-Gauge Concession with the GE-led Consortium is only one of many projects conceived in the sector. In July 2016, President Buhari commissioned the Abuja (Idu) to Kaduna (Rigasa) Standard-Gauge Rail Line, which runs two round trips daily between the two cities, creating an alternative for the over 20,000 motorists who ply the route.

Also, that month, Minister Amaechi signed a renegotiated agreement with the China Civil Engineering Construction Corporation that revised the cost – originally negotiated by his predecessors – of the Lagos-Calabar Coastal Railway Project downwards by 800 million dollars.

Again, in March 2017, Vice-President, Yemi Osinbajo flagged-off construction of the 156-kilometre Lagos-Ibadan Standard-Gauge Line, following the payment of the federal government’s 15 per cent counterpart funds about two hundred million dollars to the Chinese Export Import Bank. The project is expected to be completed within three years and it forms the second phase of the Lagos to Kano Standard Gauge Line, after the Abuja-Kaduna Line. This Standard Gauge project is different from the existing Narrow-Gauge line being concessioned to the GE Consortium.

Furthermore, in December 2017, the Federal Executive Council approved the acquisition of nine locomotives, one hundred and twenty-eight Passenger Coaches, and one hundred and ninety wagons to support Standard Gauge rail operations.

The Abuja Monorail project will be commissioned during the second quarter of 2018. The first phase of the 45-kilometre rail project has 12 rail stations and connects the Nnamdi Azikiwe International Airport to Abuja’s Central Business District.

In his 2018 New Year Speech, President Buhari announced that negotiations were advanced for the construction of the Frontier Rail Line from Kano to Maradi in Niger Republic emanating from Kano through to Kazaure, Katsina, Jibia and finally to Maradi.

Also noteworthy is the development of the Coastal Rail Line from Lagos to Calabar via Lagos-Ore-Benin City-Sapele-Warri-Yenagoa with sidings to Otuoke, Port Harcourt, Aba, Uyo, Calabar and branch line from Benin-City, Obudu, Onitsha including Onitsha rail bridge. These developments are significant, as they will position Nigeria as a major transhipment hub for millions of tons of goods being imported from and exported to land-locked countries including Niger, Chad, Burkina Faso and Cameroon.

For centuries, rail networks have formed the foundation for industrialisation, productivity and economic efficiency for many developed nations. For instance, rail infrastructure stock in the United States of America increased 16-fold from 14,000 kilometres in 1850 to over 220,000 kilometres today. The United States’ rail network has annual revenues of about $60 billion, provides 221,000 jobs and delivers 5 million tons of freight and transports approximately 85,000 passengers every day. One third of all exports from the United States is facilitated by rail transport.

In the 2017 Budget and the 2018 Budget Proposal, the federal government provisioned more than 300 billion naira for railway projects, mainly as 15 per cent counterpart funds to unlock additional concessionary funding from the Chinese Export Import Bank.

This is an unprecedented commitment, which, combined with the GE-led Consortium’s drive to modernising Nigeria’s rail infrastructure, will add immense value to Nigeria’s long term economic growth and productivity.

Ibeleme writes from Abuja