Naija loses N500bn yearly to failed freight rail services

Nigeria is losing about N500 billion in revenue, annually, to dysfunctional freight rail services that would have assisted in the haulage of goods from Tin Can Island Port and the Lagos Ports Complex (LPC), two of the nation’s busiest sea ports, to various parts of the country, according to analysts.

They reasoned that if freight rail services were functional, the gridlock in Apapa and environs, for instance, would have been drastically reduced or eliminated, freeing up the roads for other users.

Other major ports in the country not also linked by rail, depriving the economy of the much needed revenue, include those located in Calabar, Delta, Port Harcourt and Onne.

Specifically, analysts made reference to the Nigerian Railway Corporation (NRC), Nigeria Ports Authority (NPA), Nigerian Customs Service (NCS), shipping companies, major importers, clearing agents, haulage businesses and other port users as worst hit by the gridlock in Apapa and environs as a result of the absence of the freight rail services.

According to economic analysts, the N500 billion would have been generated by these government agencies, parastatals and haulage companies if there were functional freight rail services as this would have eliminated the present gridlock with the attendant downtime and improve cargo turn-over. They explained that a freight locomotive has the capacity to carry about 40 containers on one trip.

Maritime industry operators are worried that despite the over N104 billion in budgetary allocations to the Nigerian Railway Corporation (NRC) in the past six years by outgoing administration of President Goodluck Jonathan to revive the sector, haulage operators and other spin-off businesses within the two busiest seaports have continued to suffer as a result of neglect by the concerned authorities.

Apapa port accounts for about 50 percent of cargo throughput while Tin Can Island port accounts for about 25 percent in the Nigerian seaports. Cargoes are conveyed by obsolete and rickety heavy duty trailers in and out of the port to other parts of the country where motorists are regularly confronted by high gridlock occasioned by daily cargo round trip.

An estimated 56 tank farms are located in Lagos State alone, and out of this number, 35 of them are located within Kirikiri area and Trinity axis on Wharf/Tin Can road. This is where the condition of the road is most deplorable, causing extreme inconveniences to residents, tanker drivers and other road users.

Remi Bello, president of Lagos Chamber of Commerce and Industry (LCCI), said, “There is an urgent need to revive the rail system for the purpose of evacuating cargo from the Lagos ports; make the refineries functional to reduce importation of petroleum products, which will reduce the convergence of tankers at the various ports, improve the reliability and safety of pipelines nationwide as a means of moving petroleum products which is the most efficient and cost effective mode of transportation of petroleum products.”

Major problems affecting freight traffic include inadequate cargo handling plants and equipment, long turnaround time, cargo pilferage and excessive charges. The recent port reforms are expected to increase private sector participation and operational efficiency at the ports.

In August 2013, there was an attempt to inject life into container evacuation by rail from the Apapa Container Terminal in the Lagos Ports Complex (LPC). Nearly two years after, the train service from the port has remained epileptic, with one trip of less than 20 containers hardly achieved on weekly basis.

For many years, cabals within the government, selfish interests within the economy sabotaging every government effort, and corruption have made functional freight rail services a wild goose chase.

-BusinessDay, April 27, 2015 

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