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NISER tasks FG on legal reforms to boost rail sector

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The Federal Government has been urged to conclude legal reforms that will ensure potential private investors get a clear line of sight on how and where to engage in the rail sector.

This was part of the recommendation of the Nigerian Institute of Social and Economic Research (NISER), Ibadan, Oyo State during its monthly Research Seminar Series, titled: ‘Rail Transport Sector Reform and Socio Economic Effects in Nigeria’, where it raised the possibility of exploring sections 17 and 29 of the Nigerian Railway Corporation (NRC) Act, which provide some window for private participation in railway infrastructure and operations.

Senior Research Fellow of NISER, Dr. Adebukola Daramola, who presented the report on behalf of the research team, opined that investments in rolling stock and train operations may be more attractive to private investors than infrastructure constructions.

“Subsequent to the removal of legal bottlenecks therefore, the state may consider retaining infrastructure ownership, while rail operations are concessioned to private partners. Hopefully, this will improve rail service delivery and attract patronage.

“Complementary interventions are needed in the solid minerals and manufacturing sectors to boost domestic capacity for rail material production. A revival of the steel rolling mill is therefore critical.

Increased train frequencies are needed by passengers and shippers on both narrow and standard gauge lines. Delayed departures need to be curbed for narrow gauge line users and locomotives offering higher speeds are also needed on this line. Addressing rail users’ challenges will further incentivize its use and enhance better contribution to transport sector output.

She revealed that the development of local capacity for production of rail materials might not be realised without the resuscitation of the steel rolling mill, while development of technological capabilities for managing the rail requires functional training institutes. “The Federal Government has continued to invest massively in railway infrastructure and rolling stock. Rehabilitations have occurred on the narrow gauge lines (3,505km) and over 600km of standard gauge lines were constructed from 2010 till date.

“Albeit, the performance of the rail sector with respect to contribution to economic output is less than desirable as seen in rail transport miniscule shares of transport output (0.02 per cent average over the review period) compared to road share of 85 per cent. These shares reflect an unhealthy phenomenon of competition rather than complementarity in Nigeria’s overland transport system. It further betrays the fact that the two land transport modes (road and rail) are not being utilized for their intrinsic efficiencies and comparative advantages.”

Daramola noted that transportation component of Consumer Price Index (CPI transportation) has largely assumed an upward trend in the last decade, showing that increasing costs of transport have progressively contributed to cost-push inflation.

“Rail transport has a major advantage of reduced unit cost of transport for passengers and freight given its high capacities, and is also favoured for medium and long distances. However, given the slow speeds prevailing on the narrow gauge, there are more rail users on inter-city trains than there are on medium and long haul trains.”


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Adebukola DaramolaNISER
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