May 24, 2013

NRC shops for private investors to drive rail transportation


Nigerian Railway Corporation (NRC) is shopping for investors under a Public-Private Partnership initiative to drive railway operations in the country.

Managing Director, NRC, Engr. Adeseyi Sijuade, who disclosed this in Lagos, said that the government has reached a conclusion that the corporation cannot be totally transformed without the participation of the private sector.

“In this regard, the federal government, through the Ministry of Transport, recently prepared a draft bill to amend the 1957 Railway Act and allow for private sector participation. This bill has been approved by the National Council on Privatization and will soon be submitted to the National Assembly.

“While awaiting this bill to be passed into law, the NRC has begun a move to pave way for the privatization process. It has dawned on us that NRC alone can no longer handle the enormous challenges of revolutionizing the sector, having suffered long years of neglect. So it has become expedient to involve the private sector by this time if we ever intend to meet our objective of attaining world class rail service,” he added.

According to Sijuade, under the new arrangement, private individuals will be granted access to run some of the vital aspects of the railway operation while the corporation retains its regulatory power over the rail facilities and the activities of the private operators. He said the PPP initiative include outsourcing, supply chain and concessioning.

He said the corporation is already outsourcing some services to enhance operational efficiency, such as on-board cleaning of passenger trains, cleaning of major train stations and on-board catering.

Sijuade further said that NRC has commenced the procurement process for selecting potential logistics service providers in the following areas: design, building, operation and transfer (DBMOT) of warehousing to provide suitable, safe and secure storage space for goods; finance, supply and operation of modern facilities and provision of services for loading and offloading of goods; finance, supply in joint management with NRC, railway coaches to enhance passenger carriage capacity and finance, supply in joint management with NRC, and railway wagons to enhance freight haulage capacity.

The NRC boss explained that under the concessioning arrangement, the corporation has finalised the presentation of OBC for western and eastern lines concessions, and is moving to the next stage of selecting a transaction advisor.

He said under the supply chain, the federal government has already signed a Memorandum of Understanding, MoU, with GE for setting up a locomotive assembly plant in Nigeria, for which a transaction advisor is being selected.

“The implication of this initiative is that the railway authority is opening its arms for willing investors in the sector while awaiting the approval of the new railway bill that will broaden the arrangement and make for the total transformation of the sector,” he averred.

Olubodun Kolawale, an industrialist and Managing Director of Golden Kay Ventures, lauded the initiative, saying: “It is a welcome development. This is what we have been agitating for, because there is no way we would ever hope to achieve efficient rail services in Nigeria without involving the private sector. That is the way it works in other climes. And the National Assembly should quickly pass that railway bill into law so that we will begin to see results.”