Infrastructure: Railway Sector Needs $166bn In
5 Years – Amaechi
The federal government yesterday said that it would require a whopping $166 billion over the next five years to meet the country’s energy and transport infrastructural needs.
The minister of Transportation, Mr Rotimi Amaechi, who disclosed this at a public hearing organised by the House of Representatives Committee on Land Transportation on the Nigerian Railway Authority Bill and National Transport Commission Bill, added that the Federal Government and General Electric (GE) have concluded arrangement for the commercialisation of Lagos-Kano railway project.
“Besides privatisation, government also realised a monumental infrastructure deficit which as at 2015 stood at over $3.05 trillion in 30 years or $166 billion in five years with energy and transport infrastructure taking more than 50% of that need.
“Transport infrastructure alone needs a whopping $50.9 billion in five years to cover the current gap in the sector, an average of $10.2 billion per year. Currently the ratio of funding in the sector between the public and private is 9:1. This constituted a major disincentive to private sector participation in the industry.
“In addition, it is considered imperative to intimate this Committee that full government ownership and management of these agencies had inherent restrictions for third party funding, undue government interferences; burdensome bureaucratic structures and over-bloated workforce amongst others,” Amaechi said.
The Minister, who further argued that privatisation of the railway sector would conflict with public interest, stated that governments all over the world have realised that it is not best suited in ownership and management of businesses and as such considered it imperative to migrate from purely government ownership to public private partnership (PPP).
“The policy therefore is intended to guarantee efficiency, sustainability, competitiveness and profitability. To actualise these objectives, the Federal Government had established a trajectory towards driving the model. These led to the institutionalisation of agencies such as Bureau of Public Enterprises (BPE) and Infrastructure Concession Regulatory Commission (ICRC) with the statutory power to superintend the transition of government owned concerns to the private sector under the various models of PPP.”
For his part while declaring the public hearing open, Speaker Yakubu Dogara urged that the NRA Bill which spells out the operations and regulation of the railway sector, is an efficient rail system, much safer and cheaper mode of transporting goods, services and persons across the length and breadth of Nigeria.
“It will reduce drastically the damage done to our roads and highways by heavy duty trucks. Rail transportation also provides a strong foundation for industrial activities in any economy as the haulage of raw materials can be effectively undertaken though the railways.
“The current efforts by the Muhammadu Buhari administration to consolidate the revival of the rail sector, evidenced by the recent presidential trip to China and the appropriation by the National Assembly of billions of naira to it on the 2016 budget, is highly commendable. It must also be accompanied with a revised up-to-date legal framework to organize and regulate the sector,” Dogara said.
Also speaking, the chairman of the House Committee on Land Transportation, Hon. Aminu Isa (APC, Sokoto), described the two Bills as a positive step towards revitalizing the railway sector.
“In the past, there were various attempts to reform transport sector in Nigeria. But now we are happy that we have the NRA and NTC Bills. As far as we are concerned, we going to look into the submissions by the stakeholders and we are going to look at the so-called grey areas to see how we can pinpoint the issues,” he said.
He added that the NRC Bill, when passed into law, will provide a platform for state governments to invest in the sector thereby joining the federal government in the business.
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