By Rowland Ataguba
The absence of a credible freight business underpin has left the NRC vulnerable to existential shocks and the chickens have again come home to roost.
We’ve been doing this same thing repeatedly with railway for 60 years and expecting improved economic performance. How can it wash?
With an estimated 250m tons of freight movements slushing around Nigeria every year, a 5% share of which would easily sustain the railway has gone begging while the NRC fixation has remained on an unsustainable passenger business which has been losing money for all these years.
With billions after billions poured into the railways since 1984, what do we have to show but a broken railway?
The NRC cannot demonstrate a credible basis for its current business strategy.
Indeed it doesn’t even pretend one arguing pitifully that roads, hospitals, schools, govt etc and other social infrastructure don’t pay their way, so why should it? The reason someone should tell it is survival.
And look at the state of the roads, schools, hospitals …, are they enviable? Are they in a desirable state?
Across the world, passenger rail is a subsidised product but you need income from somewhere to pay for it. Such income may derive from the economic activity that the railway enables or from other sources as in our case, from oil revenues.
Sadly, our railway has not enabled much economic growth and our oil revenues have now evaporated in fuel subsidy, debt repayments and recurrent govt expenditure. So we are running on empty and been doing so for years. If the railway cannot sustain itself and hope that govt may support it on renewals and new lines capex, nothing will save it. The spoon feed is simply unsustainable. It has led to bankruptcy twice before and we are back on that slippery slope downhill again. Even if we were awash with money which we are not, we must at least try to work efficiently, to extract optimal value from assets but we are not.
Next step, we must unbundle the NRC and with haste. Dispose of its non-performing assets. It’s got land and property, printing presses, foundries, catering businesses, hospitals … that are a drain on its resources and add no real value. Entrepreneurs can do wonders with them. Civil servants haven’t. Create the independent regulator and re-focus it to its core business. Separate the freight from pax business, professionalise its governance…If you know you know. Nothing here is new. It’s been the government policy since 2002. The NRC has been obstructing its implementation for 21 yrs and been running our railway aground. The institutional reforms that we have achieved by way of the constitution amendment has been in spite of NRC indifference.
Let’s stop the hemorrhaging NOW!!
▪︎ Ataguba, a railway management consultant based in the UK, in this LinkedIn post, was reacting to a piece that was published in the Vanguard newspaper on September 9, 2023 – https://www.vanguardngr.com/2023/09/why-interest-in-renewed-rail-travels-is-waning/?trk=feed-detail_main-feed-card_feed-article-content – as reproduced below)
Why interest in renewed rail travels is waning
By Theodore Opara
As Nigerian railway battles terrorist attacks and frequent train accidents, Nigerians’ interest in rail travel is tragically dying.
The rain beating the Nigerian Railway Corporation currently does not only fall, it pours.
The industry within a space of one year is facing many battles, fatally threatening its operations.
The challenges range from terrorist attacks to frequent train accidents, rising operation costs, dwindling revenue due to drastic drop in passenger/ freight traffic and workers’ threat of unrest.
Just when many Nigerians were beginning to embrace the train as a preferred transport mode after the completion and inauguration of some standard gauge rail corridors, the terrorists struck on March 28, 2022, bombing a fully loaded Abuja-Kaduna passenger train.
The insurgents killed eight of the passengers and abducted 62, with several others injured. While those abducted were whisked into the forest in the northern part of the country and kept there under dreadful conditions for months and releasing them in piece meal, the NRC suspended its train operations.
This did not only affect the Abuja-Kaduna line but other areas including the new Lagos-Ibadan and the modern Ajaokuta-Warri-Itakpe lines.
For eight months, no train service could operate. In line with the demand of the distraught families of those in captivity, the Federal Government promised not to reopen the rail line until the last person had been released.
The period also provided an opportunity to work on the security measures around the train stations and its routes which resulted in heavy revenue loss for the government. Managing Director of the Nigerian Railway Corporation (NRC), Fidet Okhiria, put the loss at N113 million. He said, “The last time we checked, that was between the months of February and August, we have lost about N113 million.”
He said many Nigerians also incurred some losses indirectly due to the halt in train operations on the route. Despite the promise that all the running trains and their routes had been fortified, another train attack was recorded less than a year after the Abuja Kaduna train incident.
The terrorists this time attacked Igueben train sub-station in Edo State along the Warri-Itakpe rail corridor. About 32 train passengers and NRC personnel were abducted by the gunmen as confirmed by the Edo State Commissioner for Information and Orientation, Chris Nehikhare.
The train service had to be shut down due to the incident. About a month after the Edo train station attack, some 148 passengers and 30 crew members of Warri-Itakpe train were left stranded in a Kogi bush where their train got derailed. Coordinator of the train service for the corridor, Sanni Abdulganiyu, said, “The cause of the derailment is not yet determined. Due to this incident, the service along the corridor has been suspended.” After some respite on the Abuja-Kaduna line, the operation was interrupted again in January this year when the train suffered a derailment on the corridor.
This was recorded about one week after the Warri-Itakpe derailment in the Kogi area. Director of Operations at the NRC, Niyi Alli, in a statement said, “The board and management of Nigerian Railway Corporation regrets to inform the general public particularly our passengers of AK3 and KA4 of today 27th January 2023 that the disruption experienced on our Abuja Kaduna Train Service was as a result of the derailment of KA4 at Kubwa station.
The NRC rescue team has mobilized to the site to re-rail the rolling stock and repair the track. Consequently, the Abuja Kaduna Train Service is temporarily suspended.” Train accidents at level crossings are also becoming rampant and a source of headache for the NRC, especially train collision with vehicles. The latest accident was recorded on March 09, 2023 at Shogunle level crossing in Lagos, leaving six people dead and 79 other passengers hospitalised after sustaining major injuries.
The driver of the Lagos State Government Staff bus was said to have ignored the warning of an NRC flag officer at the level crossing, leaving other motorists waiting for the coming train and attempted to cross to the other side when the train crashed into it, dragging the vehicle for about 100 metres before stopping.
“This was a totally avoidable incident that simply required patience and the need to follow proper transportation protocol,” Lagos State Governor, Babajide Sanwo- Olu, said. Before the Lagos incident, an Abuja train had crushed to death a female driver on the rail track in the Kubwa area, a suburb in the Federal Capital Teritory. The woman who was later identified as an employee of the Nigerian Television Authority in Abuja, was said to have attempted to drive her car across the rail track when the vehicle got stuck on the track.
After two separate terrorist attacks on train passengers and railway facilities, it became apparent that the government needed to take the issue of railway security more seriously.
Minister of Transportation, Mu’azu Sambo, said the FG would implement far-reaching security strategies to ensure the safety of passengers, personnel and assets along the Abujarail line and other rail corridors in the country. He said this at a meeting with members of the Nigerian Union of Railway Workers in Abuja, whose members have become soft target for attacks. The minister said part of the strategies to be adopted would be a 24/7 online real-time monitoring of the Abuja- Kaduna rail corridor. He said a command centre would be set up for the Abuja-Kaduna rail corridor to monitor the movement of the train and a monitoring device would be installed on the train to enable the train captain to view the rail track up to two kilometres ahead.
Sambo said strategies had been put in place to ensure adequate screening and identification of passengers on board the train. This, he said, became necessary to prevent certain categories of passengers from gaining entry into the train. In this regard, the minister said, “To buy a ticket, a passenger would be required to present his National Identification Number (NIN). After ticket purchase, before gaining entrance to the lounge, the passenger would be required to place his ticket on a validator which would display information about the passenger, including his picture. The passenger would only be allowed to board the train after necessary validation and authentication.”
A lot of money has understandably been voted for this venture. In this year’s budget, the Federal Government proposed to spend over N30 billion on the installation of Acoustal Sensing Security surveillance system for the Abuja (IDU)-Kaduna railway. Before then, the Federal Executive Council last year approved N718m to a private firm to secure the Abuja-Kaduna rail track and stations.
With the frequency of avoidable crashes and deaths at level crossings, the FG has begun to replace the traditional barriers and flag waving at level crossings with flyovers to avert situations where trains and vehicles cross each other’s path, resulting in collision. Already, Okhiria has said 11 of such flyovers are being constructed at the 11 level crossings in Lagos.
Although the FG has taken steps to boost security measures on all railway corridors nationwide, investigation however showed that the NRC is currently running most of its train services at a huge loss due to low patronage. Many people are stillskeptical about travelling by train especially on a long journey. Those who rushed to the train when Abuja-Kaduna road became dreadful have taken to air travel. Despite the huge cost, they still consider it cheaper compared to the risk of being kidnapped, ransom payment and spending time with terrorists in the bush.
The patronage of the Lagos-Ibadan and Warri-Itakpe standard gauge trains which used to be fully booked on both ways has also reportedly dropped drastically. Ironically, the NRC which had earlier disclosed of plans to increase the number of Lagos-Ibadan trains from six to eight with a future target of 16 has cut down the number to two.In August last year, the NRC boss, Okhiria, announced that the corporation had reduced the trains to two, attributing it to high cost of diesel and other operations. But the real reason, it was learnt, was the sharp drop in patronage.
Okhiria had said, “The Lagos-Ibadan train service is running, but we have reduced the number of trips on that route because of diesel problem. We reduced the number of trips we are running because of the hike in diesel price. We are now doing two return trips as against six, which by now should have gone to 10. So we run just two trips now due to the diesel problem”, Okhiria said in an interview.
In the first quarter of 2022, the Federal Government earned N2.21bn from train operations nationwide but this revenue crashed by 66.73 per cent to N734.47m in the second quarter. The total revenue generated from passengers dropped by N1.48 billion in the second quarter (Q2) of 2022.
The figure represents a decline of 71 per cent when compared with the first quarter (Q1) of 2022. The data is contained in a report by the National Bureau of Statistics (NBS), titled ‘Rail Transportation Data Q2 2022’. According to the report, 422,393 passengers travelled via the rail system in Q2 2022 as against 953,099 passengers recorded in the first quarter of 2022. The decrease in the number of passengers also had a strong effect on the revenue generation of the corporation.
The revenue generated from passengers in Q2 2022 was N598,736,300, while for Q1 2022, the revenue generated was N2,077,836,686. The NRC is also facing threats from its workers who intermittently raise issues bordering on incessant attacks on the trains, poor condition of service, remuneration and the monetization of staff quarters.