Rail revival: Planned infrastructure upgrades are set to give new life to a hitherto declining mode of transport

Rehabilitating Nigeria’s railways is a key element in the country’s overall vision to turn its transportation infrastructure from an obstacle into an opportunity. Whilst railroad services never completely disappeared in the country, the more than five decades since independence have been mostly characterised by a slow decline in capacity, as underfunded agencies grappled with deteriorating assets, overlapping responsibilities and an inconsistent policy approach by the government.

The current plan to revive the rail network is centred on policy priorities similar to those in other public services: remove government-created challenges by eliminating monopoly rights and other exclusionary laws or regulations, privatise government assets, consolidate regulatory and policy responsibility under as few agencies as possible, and then invite the private sector to help build infrastructure and operate transportation services, in deals typically structured as public-private partnerships (PPPs).

To date, the main focus has been on improving capacity for both passenger services and cargo, the latter of which could provide a sizeable catalyst for economic growth and open up activity in agriculture and mining by connecting remote locations to central markets. The trains will boost output outside of urban areas, thereby helping perishable produce or just-in-time deliveries to get to markets more efficiently than the existing road system.

NETWORK: Nigeria currently has 3505 km of narrow-gauge railroad built between 1898 and 1964, and a 274-km standard-gauge line also started in the 1960s but not completed. Everything is owned by the Nigerian Railway Corporation (NRC), currently a parastatal agency created in 1955 and reporting to the Federal Ministry of Transport (FMT). It holds monopoly rights to ownership and operation of railroads in the country. Current scheduled passenger services include five routes: Lagos-Kano, Lagos-Ibadan-Ilorin (6200 passengers weekly); Minna-Kaduna (3400 passengers), Kano-Offa, and Kano-Nguru (850 passengers). Indeed, within Lagos there are 16 commuter trains carrying about 16,000 passengers per day. Finally, in the northern city of Kaduna, 10 commuter trains carry 10,000 passengers daily. The rail network is structured with two north-south trunk lines, Lagos-Kano in the west and Port Harcourt-Maiduguri in the east, each with several spurs. An east-west line interconnects the two main north-south lines, running from Kaduna in the west to Kafanchan in the east. The most recent data on passengers and goods carried, published in the 2010 “Annual Abstract of Statistics”, is from 2008. That year, 2m passengers travelled 722,669 km on Nigerian rails, and a total cargo of 47,409 tonnes was moved 41,056 km, according to the data.

UPGRADING NOW: The 25-year plan to remake the rail transport segment starts with rehabilitation efforts – some 90% of the system is slated for upgrading, and the NRC was allocated N10.64bn ($67m) in the 2013 budget for capital spending. Nigeria has hired the UK’s Roughton International to supervise all track rehabilitation projects. The first route completed was the 1124-km Lagos-Kano line. FMT statistics show an increase in ridership on this line in the past few years, with 4.2m passengers in 2012, up from 3.5m in 2011. From January to April 2013 the figure was 1.3m. Matching that level for the rest of the year would imply 5.3m patrons in 2013. Contracts to perform the work on the Lagos-Kano line went to local construction company Costain West Africa for 636 km of track and signalling improvements; and to China Civil Engineering Construction Corporation (CCECC), a Chinese state firm, for 488 km of track and signalling. CCECC has been a frequent low bidder for rail tenders in recent years, and concerns emerging in local media cite quality issues and speculate on whether the firm is cutting corners to ensure profits. CCECC cites its use of local labour as a determining factor.

OTHER PROJECTS: Other rehabilitation projects under way include telecoms, track and signalling on the Port Harcourt-Maiduguri line, which was split into four contracts worth a total of N73.75bn ($464.6m), according to FMT documents.

Whilst work on the western Lagos-Kano line was almost complete as of April 2013, progress on the four eastern contracts was at less than 50%. Elsewhere, in tandem with the National Ports Authority, a rehabilitation effort is ongoing for the double-tracked 1. 5-km route from the main port in Lagos, Apapa, connecting to the larger rail network.

ROLLING STOCK: For rolling stock, the first phase of the government’s long-term master plan includes NRC procurement in several areas: 25 new General Electric (GE) locomotives have been purchased, as well as 20 oil tank wagons, air-conditioned coaches and other equipment. A total of 366 coaches and wagons have been refurbished.

The federal government also hopes to create manufacturing in the country and has signed a memorandum of understanding with GE that calls for the assembly of 200 locomotives domestically using imported parts. Also on the cards for the first phase of the plan is the rehabilitation of existing stations, which the government would like to do via PPPs.

ADDING MORE: Standard-gauge railroads are more common worldwide, and regional transportation integration plans from the Economic Community of West African States (ECOWAS) anticipate using standard-gauge lines, yet both Nigeria and Ghana currently use narrow-gauge. That renders many of Nigeria’s existing tracks of limited use for regional connections. However, abandoning what exists now in favour of spending money on a network with all standard-gauge tracks has been eliminated as an option; future projects will feature both gauges. Several standard-gauge lines are currently under construction, including the original 274 km started in the 1960s. That route, from Itakpe-Ajaokuta in the central region to Ajaokuta and on to Warri, was 77% completed as of May 2013, according to the FMT. The Itakpe region is rich in iron ore, and the original aim was to supply other raw materials to steel plants in the area. The NRC has contracted local construction firm Julius Berger to do the work for N33.1bn ($208.5m).

IN THE PIPELINE: Two other new lines are in progress. One from Abuja to Kaduna was roughly two-thirds complete as of May 2013. CCECC is being paid $874m for the 187-km line. The second is a double-tracked line from Lagos to Ibadan, a city slowly becoming part of the wider sprawl of the commercial capital. The line will run 180 km and cost $1.5bn. CCECC is the contractor, and work is expected to start in 2013.

The FMT’s next plans are for standard-gauge contracts for segments of a Lagos-Kano line, which would add capacity on what is now the main north-south rail corridor. Segmented contracts would likely cover stretches from Ibadan to Ilorin (200 km), Ilorin to Minna (270 km), Minna to Abuja (145 km) and Minna to Kano (360 km). Furthermore, the NRC has built a pipeline of potential projects for which feasibility studies are either ongoing or anticipated. Following this, proposals for possible private investors will be made.

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The Report: Nigeria 2013

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