Of NRC Revenue Generation and Chinese Loans

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The recent published Rail Transportation Data for Q2, 2021 by the NBS, shows a significant rise in revenue generation by the Nigeria Railway Corporation amidst Chinese loan burden, writes Kasim Sumaina

The burden of debts by the current administration led by President Muhammadu Buhari remain a source of worry to the average citizen of the country as the current debt stood at N33.107 trillion ($87.239 billion) as at March 31, 2021.

Despite public outcry, the present administration continues its brazen disregard and penchant appetite for more foreign loans request despite concerns in some quarters, which has pitched the government and the main opposition party in a tangle. This is even as the President, Muhammadu Buhari has made request to the legislative arm’s approval of fresh N2.5 trillion to fund projects captured the 2018-2021 borrowing projections.

While some are of the view that no country is free of debts and what the government does with the loan obtained matters, others are of the concern that the future of the country’s next generation is what is being mortgaged even as they are equally of the view that monies so far borrowed has not been accounted for. But, despite the loans brouhaha, the recent feat achieved by the Nigeria Railway Corporation (NRC) as shown by the National Bureau of Statistics (NBS) despite country’s economy downturn should be commended.
The Rail Transportation Data for the second quarter of 2021 published by NBS, showed that the corporation under the supervision of the Federal Ministry of Transportation, generated N1.18 billion in Q2, 2021- NBS. According to the data, record shows that Rail transportation generated N1.18 billion in the second quarter of 2021as against N926.72 million it generated in the first quarter, indicating a N261.62 million increase.

The NBS said revenue generated from passengers in the second quarter was N1.08 billion as against N892.46 million in the first quarter: revenue generated from carriage of goods and cargo was N71.55 million as against N26.19 million in the first quarter, miscellaneous income in the second quarter was N32.94 million as against N8.06 million in the first quarter.

In its breakdown of passenger traffic, the report stated that 565,385 passengers travelled by the rail in the second quarter as against 108,238 passengers in the corresponding period in 2020. In the first quarter of 2021, 424,460 passengers used the rail. “A total of 42,782 tons of goods and cargo travelled via the rail system in the second quarter of 2021as against 8,691 recorded in the corresponding period in 2020,’’ it added.

Recall that the $500 million loan facilities was obtained from the Chinese government for the modernisation and construction of the Abuja-Kaduna standard gauge track and so far, the present administration has completed and delivered the Abuja-Kaduna rail corridor, revamped and delivered the Itakpe-Warri corridor has been inaugurated, Lagos-Ibadan has also started commercial services.

Offsetting Chinese Loans
The Minister of Transportation, Mr. Rotimi Amaechi recently requested for periodic updates on revenue generated and number of passengers that uses rail services across all corridors in order to meet up with the repayment of the loans obtained from the Chinese.

The minister had equally in a recent interview disclosed that the federal government had so far repaid over $150 million out of the $500 million facility secured by the administration of former President Goodluck Jonathan for the Abuja-Kaduna railway. Meaning an additional $350 is required to offset the loan obtained from the Chinese.

Against this background, Amaechi recently instructed the management of Nigeria Railway Corporation (NRC) to open an escrow account for revenue accrued from the rail services to offshoot the loans obtained. He had also hinted that the sum of N420.46 million was so far saved in the account.
The Minister had in April disclosed that the Corporation paid N420.46 million into the escrow account from revenue generated from the Abuja-Kaduna train services over the period of the ERGP (Economic Recovery and Growth Plan 2017-2020.

He noted that with the introduction of the online ticketing system on the Abuja-Kaduna train service, the Nigeria Railway Corporation (NRC) had been able to raise its earnings by about N50 million after deducting its operational cost.

The earnings were raised from N70 million to N350 million between May-June. The recent feat of N1.18bn in Q2 recorded after cost deductions is a significant rise says NRC Managing Director, Mr. Fidet Okhiria.
The Managing Director of NRC, Mr. Fidet Okhiria, in an interview with THISDAY, said that the feat achieved was as a result of the discipline and dedication or sacrifices of the Corporation staff, adding: “and we encourage them to keep the system afloat.”

According to Okhiria, “I can proudly say we have saved up to a N1 billion in that account they gave us to pay into. They said we should drop something for cost operation. If you pay everything how do you run the service.”

Standard gauge tracks
Speaking further on the recent development in the sector, Okhiria maintained that rail is at the lime light because of what the present administration’s is doing by construction of standard gauge tracks, stating: “they are trying to see that it is functional and interactive. They are modernising the rail system by construction of rail way that can attract travellers and tourists.”

“We want to get the best rail and this cannot be constructed in one day it can take or last up to 50 years to get rails in all parts of the country. It is quite important that we have rails because it shows that we are economically development and industrialised. The rail helps to move products from companies and produced goods to the market. You can do it by truck but at a cost. Rail will also give a lot of employment and products would be cheaper because you are moving them in bulk and products would be available and the scarcity would be eliminated and prices would be affordable. When you have little purchasing power the product would be low. We hope to continue for a longer period all we need is maintenance, “he said.

The NRC boss said, “We have four trains a day, two from Itapke- Warri and two from Warri- Itakpe. We are developing it, we have investors’ who wants to invest in rail system, we are ready to give concession and Cassava Producers have approached us, we are equally talking to Dangote. That rail is 36 years old but the present govt came in and dusted it so that it can function. We have also asked government to put in more coaches for passenger trains so that it can run every 30 mins.

“Lagos- Ibadan was on trial runs and now we are doing commercial runs and many people are patronising us. We are doing 4 trains but as of today we are trying to do weekend and two trains every other day because the number of people using the train service increases by the day. People have asked why don’t we advertise but I told them that good product should advertise it self. We are also trying to get what we call parcel vans, where you can deliver your goods to other cities and the recipient with good communication and identity can receive the package. That’s how we do it in the good old days. These will be attached to the passenger trains.

“Abuja- Kaduna, we have increased from 8 to 10. Before, the passengers used to struggle for tickets but that has reduced because of E – ticketing, also those who were reluctant to use the service because they might come to the station and not get tickets are patronising us now because it is easy to get your tickets online.”

Concerning the frequent complain about pricing being on the high sides, he said, “You see as MD, I did not come out one day to say we have increased the price of train fare, people just speculate and say prices were increased because of COVID-19. We did a bit of analysis and we said for Nigerians to enjoy the services and for we to maintain the system with government support we still get, we need to do appropriate pricing. That’s what we did. As a responsible government, we cannot increase the price when people are struggling or suffering.

“The prices are there so that we can meet up. So that we don’t run then after two years or months then we stop, that will not be proper. As management we have to sustain the quality and pay incentives or pay staff to protect passengers. Also the cost of spare parts, we don’t make them locally, we pay for them in dollars in order to maintain our service. It’s not a uniform price. We will have the one that will be at N 7,500, for express services once it comes.”

Rail concessions
On train concessions, he reiterated that government will not concession rail service rather people should invest in coaches.
“People are coming and we are looking at their documents. In rail it is not a direct money-spinner. I don’t deceive people but it can create a condition for the economy to grow and every other things to go well, for instance the impact we have on the road and its maintenance of every six months would be reduced and that would be saved, number of accident would reduce, you can travel conveniently. We are thinking of bringing in special coaches, those benefits are not quantifiable in Naira and Kobo.

“There would be an MOU for such operations so that it will be done when it is convenient or comfortable for govt and Nigerians. We are also trying to improve on our signalling and telecommunications, so that we can operate 2 or more trains in a session.

Improved signalling where the driver of train A can see or communicate with driver of train B and when there’s danger they can communicate easily and the people in the control room can stop a train from moving on the track when on session. Also we can have more coaches on the moving session. Though we don’t have the block sessions.”

Okhiria while speaking on the numerous ground breaking across the country said, “Work has commenced but it is not that work you can see now. People don’t realise that the first ground breaking that is Lagos- Kano was done in ex-president Olusegun Obasanjo’s regime. We should be sympathetic and encourage the government to do more so that they can deliver. Ground breaking is a ceremony, the work we are doing now is front engineering if you go to Kano you will see that a lot of work being done by the construction company. It is going on simultaneously along Port Harcourt, Lagos, Kano stations. What you can see in Lagos, Ibadan and Kano are structural section where they are building massively.

“This week the environmental impact assessment was going on in Port Harcourt. The construction company are providing accomodations. Don’t forget it’s 18 months we signed, Kano- Abuja should be delivered in eighteen months from now. By the time they start in eighteen months you should be able to ride from Abuja to Kano.The contract to extend Itakpe to Lokoja has been awarded unfortunately two months after the contract signing covid-19 came. It was supposed to be a PPP and covid-19 affected their economy so they sought more time to to rejig their terms of contract, if not we should be getting close to Abuja. It was a Chinese company.The government and NRC are trying to see what they can do.

Speaking also on the complaints by Passengers on the Itakpe- Warri axis of not sometimes meet up with the train from Abuja and other places, the MD said that the corporation was studying the situation and will soon come up with a reservation center where passengers can relax before boarding the train to various destinations.

He said, “We are looking at that seriously we are trying to encourage a third party. We said we would supply the land so that they can invest and develop the service. We will provide the train service but the third party will provide parks, bus service to move passengers. We don’t want to be the ones doing that. That’s why we want to bring in the third party, we are expanding opportunities for people.

“It is even faster for a private investor to operate than for the government because we have to follow the due process. We are trying to encourage investors and we are getting offers from those that are serious. We have to use proper intelligence so we don’t fall victims. People have indicated interest to make parks and transit hotels, we are considering it not only in Itapke – Warri also in Lagos, because all we have to do is to provide additional land.”

Late arrival
But, the increasing complaints of late arrival to the Itakpe-Warri rail stations occasioned by the plight of logistics short falls and other businesses on the corridor, government at both federal, state and local levels has been urged to as a matter safety establish transit hotels to aid passengers movement.

While the Managing Director of the Nigeria Railway Corporation has said the situation is currently being studied, industry observers have asked when it will be achieved. Just as the Permanent Secretary, Ministry of Transportation, Magdalene Ajani urges investors to establish logistics value chain along Itakpe-Warri rail service.

Ajani called on private investors to cache in on the enabling environment created by the opening up of Warri-Itakpe rail corridor to establish logisitics and other businesses. She embarked on a fact-finding tour of the Warri-Itakpe rail line following reports of logistics shortfall and poor service delivery along the corridor.

She also invited those in the hospitality industry to set up hotels and guest houses at all the rail stations, saying: “We are trying to get private investors to at least build hotels in virtually all our stations. So, if for any reason people come in late, they can check into those hotels. Those who want to catch the early trains can also spend the night there and, in the morning, they board their train to their destination. Government can’t do everything but we are trying to see, to make sure that private individuals can come in and partner with us and build these hotels at the stations.”

Similarly, the Permanent Secretary called on the leadership of the National Union of Road Transport Workers, to constitute themselves properly and set up motor parks where passengers can conveniently get vehicles to their destinations on disembarking from the train.
Why these are lofty ideas, industry players have urged the government to rise to the occasion by providing some of the amenities.