10 Loopholes in Nigerian Railway Legacy Projects

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The Nigerian Railway Modernisation project has attained great milestone under the ministerial leadership of Hon Rotimi Amaechi but that landmark achievement is under threat due to a number of factors, Industry watchers have stated.



By Bike Mccain who was in Abuja

10 main reasons threatening the legacy projects were identified in a series of interviews with stakeholders and Industry experts namely :

1. Opaque Procurement: The contracting and procurement process are shrouded in secrecy, raising multiple questions about transparency and accountability. Why this matter is that question of corruption may eventually colour whatever the achievements of the administration in the sector ;


2. The Chinese Factor: The grundswell of criticism against Chinese model of project financing and implementation is a major point. The opposition to the Chinese deal runs deep beyond the shore of the country. That the credtor is also the contractor epitomises the darkest route to lack of transparency, accountability and value for money;

3. The Minister’s Person: The Transportation Minister in Nigeria, Hon Amaechi is known to be a man of strong will who have little or no time for experts and industry specialists. His approach to project design and implementation defy standard practice, leading to sordid handling of critical projects. The lack of space for Industry experts creates loopholes being exploited by creditor-contractor, portending likely shortchanging of the country in the project implementation process;

3. Conflicting/Inconsistent Project Information: Over time, conflicting Information has emanated from the Minister on the state of the project. First was the shifting date of completion of several projects to variation in project cost. The Lagos-Ibadan SGR is an example , showing conflicting Information and discrepancies.

4. Cloudy role of Team Nigeria : Team Nigeria is the project consultant but the firm has remained complicit in the conflicting state of critical rail projects. Determined to keep its contract which has been on for several decades, Team Nigeria plays the political game , playing along with the political office holders even when professionalism demands otherwise.

5. The Lack of workable legal framework: The Minister has remained silent on the reform of the legal framework for the railway sector. The 1959 railway act remains with the administration making little or no effort to push for the amendment of the act. The reason mostly according to those interviewed was the penchant to keep the sector under tight control of the Ministry through the subjugation of the Nigerian Railway Corporation (NRC). The sector is therefore stil primitive, far behind similar rail bodies in Ghana, Kenya and South Africa.

6. Lack of railway Industry development plan: Due to the aversion for the private sector and Industry experts, Nigeria has not developed any sector Industry development plan and initiatives. The railway sector has seven industrial value chains, capable of generating wealth amd jobs. The administration however has no plan to develop the Industry as is being done in South Africa and others. The over-emphasis on China as creditor and contractor has foreclosed any thought of developing local industrial sector for the railway value chains;

7. Misplaced priorities: The proposal for two new Transport universities is considered a wrong policy decision in a country with several universities with over 50 Transport faculties nationwide. The Chinese corporate social responsibility should have been channelled to adoption and upgrade of one or two universities;

8. Litigation Crisis: Court cases constitute a threat especially in the case of Port Harcourt- Maiduguri railway project . The failure to settle the dispute over old contracts on the line is threatening to delay the take off of the Eastern line rehabilitation

9. Low Project Ambition: The sector lacks ambitious project and agenda despite the increasing level of loan committment. Nigeria has no electric , bullet or high speed rail agenda at a time several other African countries are pitching top flight new era projects. A private sector idea of a high speed rail between Kano and Lagos was shot down by some state officials.

10. Debt Trap: Nigeria risks falling into debt trap with increasing loan committment to China whose full details are not fully disclosed. Strangely, the Minister has declared several times that there is no alternative to Chinese loans, a position widely disputed.

*Bike Mccain is of the Global Railway Transparency Project (GRTP)

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One thought on “10 Loopholes in Nigerian Railway Legacy Projects

  1. Additional missing critical piece.

    A commercial business plan that shows how the capital and construction and other plan elements actually will work to DIVERT BUSINESS VOLIME from trucks/roads and create a pro forma income and operating income future cash stream to pay back the debt plus interest.

    Cheers!
    Jim Blaze. Zeta Tech Associates Inc director of the NRC Feasibility Plan in 2003-2004.

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