BPE and the privatisation of the transport sector By Kola Sobowale

DEVELOPMENT of the transport sector is arguably one of the more interesting things happening in present-day Nigeria. It has taken various dimensions. One is the reconstruction of roads some of which, like the Benin-Ore road, the Abuja-Lokoja road and the Lagos-Ibadan expressway, may be regarded as iconic highways of national significance. Another is the construction of new roads, especially federal roads, nationwide, to further open the nation’s landscape for effective road transportation.

   The current road development programme is extensive. For instance, the Minister of Works, Mr. Mike Onolememen, announced on December 4, 2014, that the Federal Executive Council (FEC) had approved over N430.5 billion for the construction of 17 roads and bridges across 15 states of the federation, including “Borno, Yobe, Gombe, Rivers, Bayelsa, Delta, Enugu, Nasarawa, Abia, Niger, Kogi, Cross River, Lagos and Kaduna states.”

  Indeed, roads are to vehicular transportation what railways are to transportation by train, and so their development should be regarded as an integral part of the development of the transport sector.

  But roads are not the only beneficiaries of the recent infrastructural development by government.  For – and perhaps more interestingly – the railway system is being rehabilitated and trains relaunched after about three decades of constant dilapidation. Kehinde Oyetimi aptly captures this new exciting development in “Nigeria’s Railway System: Now A Song Worth Singing,” the title of his feature article published in the Nigerian Tribune of January 26, 2015. “Nigeria’s railway transportation was, until now, regarded as the non-existent link in the nation’s development chain,” he clarifies. “For over three decades, that part of the nation’s transport sector declined with no obvious hope in sight for rehabilitation.” He then notes the current turnaround of the system: “The disturbing testament of the rail system was overhauled after the commencement of the transformation agenda of 2011 was announced by the present administration of President Goodluck Jonathan. Indeed it is comforting to note that the tracks are alive again and the system is undergoing serious and sustainable revamping.”

  However, besides the ongoing improvements in both the road and railway components of the transport sector should stand the question of how to make the sector run efficiently and profitably on a sustainable basis. Clearly the prospects are as huge as the challenges, but surmounting the challenges would lead to releasing perhaps one of the greatest potentials for economic prosperity in the Nigerian economy, comparable to what is obtainable or anticipated in the telecom and power sectors.

  The prospects and challenges are perhaps best gauged through the observation by Sunday Okobi and Ugo Aligo in “Sustaining Railway Transport in Nigeria,” their feature article published in This Day of March 24, 2014. According to Okobi and Aligo, “Passengers who have embraced rail transport have opined that not less than one million coaches will be needed to sustain railway service across the country.” This, they explained, is against the background of “about five million passengers” having “travelled by rail in 2013 and 80 per cent increase from 2009 in the operation of the weekly express passengers train from Lagos to Kano and Offa to Kano as well as the 16 daily mass transit train trips in Lagos metropolis…”

  The answer to this question of sustainable efficiency and profitability apparently lies in the recent revelation by the Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Ezra Dikki, of plans to privatize the transport sector. Various news reports quoted Mr. Dikki as having said that the bureau will soon begin the privatisation process as soon as the necessary legal and regulatory frameworks were put in place. The reports also quoted him as saying that following its privatization, the transport sector will become a viable investment destination for investors from across the globe. Also, that the bureau was concerned with the viability of the transport sector because it was critical to the growth of the nation’s economy and does not want to repeat the mistake it made during the port reform. And that, in order not to repeat the mistake, it will ensure that the legal and regulatory frameworks are in place before embarking on the privatization of the transport sector.

  Perhaps a bureau that has thus resolved on its own to follow due process as it were, ensuring that the right things are done as a mark of having learnt from its past, deserves commendation with no additional advice in that regard. But the privatization process does not end, but rather begins more or less with instituting the said legal and regulatory frameworks.

  The case for the privatization of the sector is not too hard to make. For instance, to provide the one million coaches recommended by railway users is not a task that one should reasonably expect government to embark on alone, having (at its expense) provided the stimulus for further development of the sector through its ongoing rehabilitation. And it may not be the best option for government to do so even if it were possible, compared with the option of using private investors whose involvement will free up more time and resources for government to concentrate on delivering effective governance in other critical areas.

   In addition, efficient rail systems hold the key to the longevity of road networks, as more people tend to prefer using them, which reduces pressure on roads and results in their lasting longer and requiring less maintenance with the resultant reduction in maintenance cost. This hints at an underlying economic advantage in Nigeria having an efficient rail system, and the need for the bureau to ensure that, when the transport sector is finally privatized, only companies capable of running businesses efficiently in the sector become the new business owners.

  All this is besides the prospect of the bureau shepherding (as a privatization agency) the resurgence of a railway system – an entire transport sector, in fact – that could be patronized by tens of millions of commuters annually, with a commensurate potential for job creation and the delivery of many income-generating ancillary services such as cargo transportation.

GUARDIAN