Federal Government explained why they divided the Rail Sector
The federal government has revealed that it is unbundling and commercializing the Nigerian Railway Corporation (NRC) to optimize its services and encourage private sector participation.
The Minister of State for Transportation, Senator Gbemisola Saraki, disclosed at the Nigeria International Partnership Forum in Paris.
She said the unbundling would drive competition in the industry, enhance service delivery for customers and improve infrastructure and other asset maintenance.
She advised potential foreign investors at the event to explore investment opportunities in the sector, stating that the separation would change the position of the corporation for efficient management and efficient service delivery.
The minister said that NRC will be split into four subsidiaries, namely: Regulation, Infrastructure (network creation, renewal, and maintenance), Operations and Services (rolling stock operations, rolling stock creation and purchase, and rolling stock maintenance).
“Commitments were reaffirmed with regard to rail transport as a key component of socio-economic transformation.
“It is worth noting a 25-year strategic plan aimed at rehabilitating all existing narrow gauge railways, building new standard gauge lines, and connecting to all seaports.
“There are also rail links to state capitals, mining and agricultural clusters, and technology centers, as well as their operation and maintenance in the country.
“This has led to some successes, such as the commissioning of the Abuja-Kaduna, Warri-Itakpe, and Lagos-Ibadan rail lines, as well as a wagon assembly plant in Ogun state,” she said.
Saraki disclosed that all aspects of the rail system are now operational for both commercial and passenger activities.
Saraki said Nigeria’s rail projects can generate sustained freight growth of 7.9 percent from 2021 to 2025.
On the maritime sector potential, the minister said that Nigeria had the second-longest length of waterways in Africa, covering about 853 kilometers.
She said that the country was also endowed with an extensive coastline – 10,000 kilometers of inland waterways and an exclusive economic zone of 200 nautical miles as well as additional 150 nautical miles of the continental shelf in the process.
“We are a dominant player in the West and Central African sub-region and the Gulf of Guinea (GoG), controlling over 70 percent of shipping traffic in the sub-region.
“As a maritime nation, Nigeria plays important roles through its relevant agencies to check the menace of maritime insecurity and other safety challenges in the Nigerian maritime domain and the GoG region,’’ she said.
The minister said that, with the implementation of the right policies and deployment of modern equipment as well as collaboration with other maritime security agencies, the country had significantly curbed piracy and sea robbery in the region.
“The International Maritime Bureau has severally commended this initiative and, in one of its reports, it noted that the number of kidnappings and robberies in the Gulf of Guinea in the second quarter of 2021 is the lowest since 2019.
“While 33 incidents of piracy were reported in the last quarter of 2020, six cases were reported in the second quarter of 2021,’’ she noted.
Saraki estimated the nation’s federal road network to be 35,000km, representing about 17 percent of the national road network of 200,000km.
She said that investors should take advantage of Executive Order 7 which seeks to mobilize private investment into the development of key roads and bridges.
The minister said that activities had returned to the air transport sub-sector after the COVID-19 global disaster, with the restoration of bilateral air agreements and the springing of more domestic airlines with newer and modern aircraft in their fleets.
Saraki said that investors should key into the plan to establish Nigeria’s national carrier through a public/private partnership being vigorously pursued.
She also informed the gathering of a plan to concession the four major international airports –Muritala Mohammed in Lagos, Nnamdi Azikwe in Abuja, Mallam Aminu Kano in Kano, and Port Harcourt in Port Harcourt.
Saraki said that investments and partnerships in the country would require prospective partners to show mutual respect and desire for justice and equity.
The Minister of Niger Delta Affairs, Senator Godswill Akpabio, said at the event that the Niger-Delta region, which he supervised, was open for investment.
He said that the nine states that made up the region were safe and had enormous potential for investment in oil and gas, real estate, palm oil, infrastructure, and agriculture generally.