Quality regulation, laws will lead to efficient rail system

On July 26, when President Muhammadu Buhari commissioned the Abuja-Kaduna rail line in Idu Station, Abuja, what was playing on the minds of two people in the crowd that witnessed the ceremony was the ambitious plan they also have for reviving the rail sector. Senate President, Dr. Abubakar Bukola Saraki and his colleague, Senator Gbenga Bariu Ashafa were enthusiastic about the commissioning of the rail track because they were sure the new Nigerian Railways Authority Bill 2016, which the Senate just passed will provide the enabling legislative platform for train services to become a key, reliable and profitable means of transportation in Nigeria.

Since the early 1980s, when rail transportation went comatose in the country, the national economy had suffered several setbacks. Apart from the manner in which the situation had slowed down movement of goods, services and machinery, lack of efficient railway system had signposted the underdevelopment nature of our country’s economy. It has put pressure on our road infrastructure and led to a near total collapse of the roads. The result of this is the avoidable road mishaps and the attendant loss of lives and limbs.

The rail system collapsed because the government refused to bring the operation up to modern standard and international best practices. For example, the law that was repealed and replaced by the Senate last month was last reviewed in 1955 when a large majority of the Senators were not born. That law made railway system an entire business of government. And this is at a time when governments all over the world are restricting their role in the economy to creation of enabling environment, while the private sector is assigned the responsibility of running businesses.

Therefore in line with the Legislative Agenda of the eighth Senate to comprehensively review the institutional, regulatory and legislative instruments affecting businesses in Nigeria, its Committee on land transportation was charged with preparing a bill, which will create an efficient rail service, pave way for involvement of the private sector, promote healthy competition among many service providers, encourage infrastructural development, implement national policies and establish regulatory framework.

The nine-man committee decided to consult widely with stakeholders like professionals in the sector, civil society organizations, development partners, organized private sector, labour, professional groups like the Nigerian Bar Association, Ministries, Departments and Agencies with responsibility on rail matters as well as the financial institutions.

Apart from holding a public hearing to source varied opinions on what to dump in the old law and new ideas to add to the new law, the committee also worked with a technical group, which eventually knocked the bill into a modern shape.

Eventually, the bill creates a Nigeria Railway Authority (NRA), which shall be a body corporate with the power of succession to the activities of the current Nigerian Railway Corporation with respect to ownership, operation, maintenance and the provision of railway services. The bill also creates a Governing Board that shall be “ responsible for the determination of the general policy of the Authority with the regard to the financial, economic, commercial and operational programme of the Authority.” A Managing Director/ Chief Executive Officer shall head the management of the authority.

The new NRA is expected to warehouse the operational properties of the old NRC and then concession same to private investors. Clause 10 and 11 of the new law guarantees and contemplates issues of concessions and private sector participation in the provision of train services. The bill incorporates the various other laws like the Infrastructure Concession Regulatory Commission Act, Public Enterprises (Privatization and Commercialization) Act and such other laws relating to and governing concessions.

Under the new law, the NRA shall have power to enter into agreement with states, local government and individuals since it is a body corporate under the law for the provision of railway services either through concession, joint venture, private-public-partnership or other arrangement. The minister is now merely to provide policy formulation and facilitate foreign agreements on behalf of the federal government. He can no longer interfere with the day to day running of the Authority.

The regulator will now be the National Transportation Commission (NTC), which will be created pursuant to the passage of another bill with the same name. The bill is already in second reading in the Senate. This will separate the NRA, which is an operator of the rolling stock from the regulator, and thereby create a level playing field for all investors. The regulator will be charged with the responsibility of licensing operators.

Section 43 of the proposed law provides for the modalities for the participation of states and local government councils in the rail transportation sector. Here, the approved standard that would be required to construct and operate railways, as well as, develop infrastructure for the provision of services within the territory of states and LGAs are well spelt out.

For the purpose of ensuring safety, the new law provides for the appointment of the Chief Inspector of Railways who is to issue elaborate guidelines to operators. Also, Part XI provides modalities for ensuring that rail tracks concession to private investors by NRA and those consequently constructed by investors are accessible to all. The regulator is saddled with the duty of ensuring track access agreements and access charges that are applicable.

Part XII regulates competitive disposition and discourages the emergence of a monopoly. Part XIV spells out the duties and powers of railway operators. Part XV deals with appointment of railway accident investigators, their functions and mode of operation. It also prohibits conflict of interest.

Part IX dwells on acquisition of land for construction of Railway Infrastructure. It empowers the NRA not only to access the land, but also to also compulsorily acquire any land required for the construction of railway infrastructure. The last part deals with the offences and penalties with regard to safety and operations of the Railway.

The implication of the bill, which is awaiting concurrent passage in the House of Representatives and assent by the President, is that very soon massive job creation opportunities will be available to the people through the railway sector. Also, the growth of thriving local economy around train stations will soon be witnessed in our rural areas. More importantly, safety on roads and mass movement of people and easy distribution of food items from the producing areas to the consuming areas will now be possible.

It is then that we can all have a jolly ride on the train.

• Olaniyonu is Special Adviser (Media and Publicity) to Senate President.