Connect with us

Business

One week to go, FG moves to sell Railways

Published

on

The federal government through the National Council on Privatisation (NCP) has directed the Bureau of Public Enterprises (BPE) and the Nigeria Infrastructure Advisory Facility (NIAF) to commence the privatisation of the Nigeria Railway Corporation (NRC) and other railway facilities across the country.

The NCP gave the directive to the BPE and the NIAF, after its council meeting in Abuja. Director-General of the BPE, Benjamin Dikki said the decision to reform the railways was borne out of the government’s desire to avoid the collapse and eventual shut down of the railways, generally regarded as a loss, but making it socially and economically imperative to the nation.

His words: “The funding challenges facing the future of rail in Nigeria seems dependent on the efficiency and professionalism which the private sector can bring to improve railway operations. The railway reform, restructuring and privatization programme is specifically aimed at achieving the provisional framework for private-sector led growth through expanded domestic and foreign investment; improve NRC’s ability to provide adequate, safe, reliable and efficient rail services; and reduce NRC dependence on the FGN budget by introducing private sector investment in the sector”.

He stated that NIAF was committed to fund the consultancy for the development of the roadmap and framework for the concession of the rail tracks of NRC.

According to Dikki, NIAF has confirmed its willingness to support the Bureau in developing a roadmap/framework for concessioning the Nigerian narrow gauge railway network. It also indicated that it would provide the proposed technical assistance at no cost to government.

In 2005, BPE through the World Bank funding, engaged the services of CPCS Transcom as transaction advisers to advise in the concession of the rails.

The firm had completed about 80 per cent of the assignment including the concession of the central railways (Itakpe-Ajaokuta-Warri line which terminates at Ovu) and the due diligence on the entire rail network before its contract was suspended because of the proposed modernisation of the network which was to replace the existing network with wider gauge.

He explained that because of lack of funding, the modernisation project was shelved by the Federal Government which directed that the existing network should be rehabilitated and concessioned to private operators.

The rehabilitation of the railway system includes track spot renewal of Lagos to Kano and Maiduguri to Port Harcourt lines, supply of 25 new locomotives to boost existing locomotive power base of the corporation, upgrading of carriage and wagon workshops, re-equipping the workshops, supply of service support, strategic rebranding of the corporation, rehabilitation of stations and marshalling yards.

It would be recalled that a new railway bill which is one of the eight reform bills recently approved by the NCP and Federal Executive Council (FEC) is currently before the National Assembly for passage into law.

The new bill seeks to among others, repeal the Nigerian Railway Corporation Act, 1955; provide the appropriate market design and legal framework for the implementation of Government’s reform programme; separate the roles of policy making, regulation and operation; provide a platform for the introduction of private sector concessionaires and promote competition in the provision of railway services nationwide.

The Public Enterprises (Privatization and Commercialization) Act, 1999 scheduled the Nigeria Railway Corporation (NRC) for privatization and the National Council on Privatization (NCP) in 2002 approved that the enterprise be concessioned to private operators to provide freight and passenger railway services using the vertical integration model.

Ripples… without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now

Click to comment

0 Comments

  1. Don Lucassi

    May 22, 2015 at 9:44 am

    I hope this concession has a time limit and that one day in the near future, it will be returned to the hands of government as I believe just massive infrastructure like rail transport are best in government hands.

  2. billion$

    May 22, 2015 at 2:30 pm

    they will soon sell the country!

  3. Apachee zooma

    May 23, 2015 at 4:52 pm

    This move tire me o. Did I hear one week to…?

Leave a Reply

Your email address will not be published. Required fields are marked *

17 − 3 =