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Economic diversification: All state capitals to enjoy railway services – Rotimi Amaechi

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…Railways will boost mining which will diversify our economy
…Says Buhari govt committed to Nigeria’s development


Minister of Transport, Rotimi Amaechi spoke with journalists in Lagos where he inspected ongoing railway projects. Excerpts:

This administration has an ambitious rail project but the question remains, why are you piling up loans instead of developing the rails through the  Public Private Partnership, PPP or getting private companies to come and finance it instead of loans and public funds?

I challenge anybody to show me anywhere in the world where railway lines are built by private funding business? For them, it does not make any economic sense for a private business to put money in railways. There is nowhere in the world where railway has been constructed with private funds.

But what has the Transport Ministry, under your leadership, been doing to revamp the railway?

There are three key factors that aid development. The first is steel and you know Nigeria has no steel; the next is power and the third is railway. Railway is expensive to construct, private funds are not used to construct railways. We are fixing all the narrow gauge, which is about 3,500 kilometres. GE(General Electric) and the consortium is expected to bring $2.7 billion to fix the old rail line from Lagos to Kano, to Funtua.

They will also fix from Port Harcourt to Maiduguri, and they will recover their funds in 20 to 30 years depending on what we agree on. But when it comes to construction, which private company will bring $1.5 billion for the construction of the Lagos-Ibadan railway line for instance? So, usually, the government bears the brunt so that the economy can grow.

Imagine that we finish re-constructing the narrow gauge. The day we  make the rails to function, the price of tomatoes would reduce drastically because we would then be able to convey cheaply and more conveniently, bulk quantities of tomatoes from the north to Lagos and other states in the South.

So, the objective of this government is to ensure that at least all the state capitals have rail services. So, if you check Lagos-Ibadan, it will be completed in December 2018. By January 2018, hopefully if we get the loan, we will start Ibadan-Kano. We have constructed Abuja-Kaduna and we are constructing Lagos-Ibadan, we will not wait for that to finish but by next year, we will start Ibadan-Kano. Once we complete that, we have 1,500 km standard gauge but we had earlier awarded the contract to China Civil Engineering Construction Corporation, CCECC, hoping that the Chinese would fund Lagos-Calabar.

The Chinese came back two months ago and said they didn’t have money to fund the Lagos-Calabar rail project. So, we are going round looking for money, we have proposals.

Rotimi Amaechi

Some people have indicated interest in funding part of the Calabar-Port Harcourt rail project and we are talking with them. We are talking with other groups who want to fund Port Harcourt-Maiduguri. The central line we intend to complete next year starts from Itapke-Warri. The president has directed us to start from Abuja-Itakpe but by next year, we are sure to launch the train services from Itapke-Warri while we are looking for money to construct Abuja-Itakpe to join the one we have completed from Itakpe to Warri.

But these are plans…?

They are not just plans, they have gone beyond planning. Most of those we are discussing with, we are not just talking about taking loans, what we are discussing with them is for them to bring ten per cent equity, while we (FG) bring ten per cent equity. The company we would form as  special-purpose entity,  SPE, will then borrow the remaining 80 per cent.

What we are trying to do is to also get private individuals to join us to borrow the money and run it; and because their company has participated in the loan, they will all run it to pay back.

So, you have a stake?

Yes, we have a stake. So, we allow them to run and see whether they can recover the money while we make our contributions to pay part of the money.

Can you give some kind of timeline?

You can’t do that until you have all the funds. I will be able to say that by June 2018. But, I can tell you that Lagos-Ibadan will be completed in December, 2017. Don’t forget that the contract for the Lagos-Ibadan is three years but because I knew Nigerians wanted to see results, I told them no, that it could be delivered earlier.

The Chinese government told us that they construct 1000 km per year, so, why should 126km take them three years? They said it was a double carriage way but I told them that even if it was a double carriage way, they should break themselves into gangs and that five gangs could complete it in a year. That is what they are doing and by December, they will start laying the tracks.

Tell us your plans for Apapa, especially with the traffic gridlock on that axis.

We are talking with GE to initiate what we call the interim phase agreement. The interim phase agreement is a plan to put in place a structure that can get the rail to start running no matter how slow.

Nigerians will be interested to know when the trucks will leave Apapa.

I don’t know about the trucks… I was explaining to you that there was an interim phase agreement and that is to enable us put the cargo on the rail. So, GE is bringing in six narrow gauge locomotives in the next one month, they will also bring in 100 wagons. With the six locomotives and 100 wagons, we will then begin to transfer the goods from the seaport.   All Lagos bound freights will likely be transported to Papalanto. I won’t accept EbuteMetta because trucks have taken over the roads.

So, I said instead of that, they should move to Papalanto and pick up their goods but the non Lagos goods should go straight to their locations, no matter how long it takes than to drop all of them in Papalanto. The best thing is to leave all Lagos goods at Papalanto and the rest goods will be transported direct to their destinations. That I have directed.

We are in a hurry because some of you are not patient enough, you want the results delivered despite the time constraint that we have.

You are ambitious but you probably may not be able to deliver in time considering challenges of funding …

Let me tell you why one should be ambitious. Lagos-Kano was on board in 2006, the Lagos-Calabar was on board before we came in. President Buhari came and said we should not award any contract but that we should construct those two rail lines. You can hear me say now that we are looking for money. People politicise the issue of railway, but it has to do with economics and has nothing to do with politics.

By the way, it is enough if we get the narrow gauge to 200kph but Nigerians said they want speed train. So, it is the politicisation of development but what I tell people is that they should not politicise development, we are Nigerians.

So, if the president tells the Minister for Transport, I want you to deliver the railways he means it and doesn’t play politics with it. He wants service for the people, not politics. One thing I can say to the public is I am not under pressure by the President. The pressure I am under is the pressure of making sure that there is result but not for me to do it in certain areas. The decision to itemise the railway projects is left to me.

What is driving the rails are economic goals, that is why you see I am pursuing the central line. There are two types of economic zones that you can look at here. One is that the solid minerals are found more in the north east. So, you see why we develop the Port Harcourt rail because once Nigeria leaves oil and goes into mining, you will see the benefit of the rail. If you don’t have rail, forget about mining.

The reason the President is pursuing the rail is because of the diversification of the economy, if we are going to diversify our economy, it means that we are going to depend greatly on the north east not just for food but for the mining.

Land locked neighbouring countries do not import through Nigeria again, they import through Lome, Cotonou and Ghana. There are several factors but one of the factors is that there are no rail lines that get up to their countries. So, I believe that if we do the Lagos-Kano and connect from Kano-Niger Republic, they have no reason to say they cannot come to our area.

The other reason they gave are the numerous checkpoints. If they put their goods on the railways, they will not face checkpoints. This    will boost the economy of Nigeria too.

So, the rail development is focused on economic development.

You are trying to do so many things at the same time. You said you are not under pressure…

(Cuts in)  No, I meant that the president is not mounting pressure on me on the choice of where to go, where the rail lines must go. All he wants is the overall good for Nigeria. I am under pressure to carry out economic development. The president has said he wants to diversify the economy which is his focus and the focus of this government.

We are less interested in oil and more interested in economic diversification. If that is what he is saying, then there will be no economic diversification until we deal with railway.

Because you’re doing so many things at the same time, are you not worried that you may probably not achieve or complete anyone?

Why don’t you wait till then? I have been a speaker for eight years, my record is there; I have been a governor for eight years, my record is there; I have been minister for two years, why don’t you wait? It was less than six months after I became minister that we fixed Abuja-Kaduna rail line, don’t forget that it was abandoned before I came. They abandoned it for lack of funding.

What are your big challenges?

Funding and I have said that several times and that is why you see me trying to run everywhere to look for funds. You see, it is not every country that gives money even if it is at commercial rates. There are so many countries out there looking for money, it is not only us.

Nigeria is also looking for money to fund the budget.

Why don’t you for the first time, praise the Buhari government? When we came, what was the per capita recurrent ratio? It was below 20 per cent per capita and then, the current was 84 per cent. In our first year, we did 25 per cent. The difference between us and the rest is that we don’t borrow to the government, I hope you got that, we lend money to projects.

To be paid for by the government…

Are you saying we should not borrow? We must show a bit of understanding of the issues; you cannot even run the economy without borrowing. There is no economy in the world you can run without borrowing. The United States of America is borrowing trillions of dollars. We have not surpassed the ratio. Every day, we look at the ratio and ensure that we do not surpass it. Are you asking us not to develop?

Some people have argued that we need to look at the Railway Act of 1965 and amend it

The Railway Act is before the National Assembly, the Act has been there but I think it has passed Second Reading in the National Assembly and hopefully, they will pass it. Let us give them some time for them to pass it.

How would you assess this government especially in your ministry?

Whether Nigerians accept it or not, we did not promise to perform miracles. We knew there would be challenges. I was chairman of the Nigeria Governors’ Forum, I knew the huge stealing that was going on; I knew that Nigeria was bleeding.

Now, when we took over what we did not expect as we landed was that oil price would crash the way it crashed. We didn’t also know that there was a political plan to drown the economy if they lost. While we looked at the economy when we came in, our economic experts said we needed to spend ourselves out of recession. We were told that we needed to pump money into the system. Which government has come to power and started paying contractors of the other party that was in government?

Did you mean contractors of previous governments?

Other governments will ignore them and employ their own contractors; instead,    President Buhari directed that we needed to put money in the system for two reasons. One was to bring back the economy, the second reason was to restore the economy, you have to make the people consume. For the first time, we spent over $1 trillion on capital and most of them; we were paying the contractors for contracts that were awarded by the previous government including that of Obasanjo, Yar’Adua and Jonathan. We could not award contracts of our own till 2017.

So, when anybody says assess the government, you must look at what we are doing vis-avis the noise we are making. The problem we have is that we are not making enough noise. Everybody is doing his or her work quietly.

The Buhari administration

Anyone who can’t speak about Buhari does not know the man. I acted as his Director-General for ten months, so, I know the man very well. I know the things he wants and the things he does not like. I can tell you that the man is committed to the development of Nigeria. One good thing about the man is that once he makes up his mind to be focused on the development of Nigeria, he has to achieve that development that he wants.

What is important to him is a united country that provides for the poor and the rich. Have you seen our convoys? I have not seen a minister that has more than three cars in his convoy. How many previous administrations have you seen like that? The ministers, realising the spirit of the government or body language of the President, know that it is the right thing to do; you just know that it is a waste of money to have ten cars for a minister.

I drive myself, I don’t have a convoy. Anywhere I go, I drive myself.I have always driven myself as Speaker and governor and now as Minister. During the campaign when I drove the President, he used to call me executive driver. It is not about being a minister, it is what I love doing.

It is difficult to develop without the railway system

What I have decided to do on the railway is to ensure that we keep to timelines, so the first week of every month, I am in Lagos. During the week, we had a meeting with the Chinese contractors, the Lagos State government, Oyo government, Ogun government, NRC chairman to assess what we did the previous month and see whether we achieved them.

Our target is to commence laying of tracks by December 2017, we will try but we are having challenges. We have challenges of gas pipelines, we have power assets on the alignment, we have written, no response; we have four bridges that are challenges to us; we have found solutions to three of them to allow the trains pass. We are doing all that and hope that the society will be understanding and give us time to allow us finish. The time they gave us is four years. We don’t have money, so we have to borrow.

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