Workers caution govt against privatisation of railways

CITING ‘economies of scale’, members of Nigeria Union of Railway workers (NUR) have cautioned the Federal Government against reported plans to privatise Nigerian Railway Corporation (NRC).

In a petition addressed to President Muhamadu Buhari, the workers argued that in the socio-economic peculiarity of Nigeria with over 150 million people over a land space of 928, 768 square kilometre, privatisation of railway, “will, inter alia, decimate economies of scale as the Corporation is taken through neo-liberal unbundling which deprives smaller units of the advantage of economies of scale.”

According to the union, a privatised railway system will achieve for the nation “increasing inequalities in the redistribution of wealth which deepens the gap between the rich and the poor.”

The union in the letter dated November 5, 2015 explained that the reported privatisation ‘negates’ the great expectation of the citizenry and the “Change that your great political party, All Progressives Congress (APC), promised Nigerians”.

Defending its position in the petition issued on behalf of the union by General Secretary, Segun Esan, NUR said: “Our apprehension about privatisation is consistent with standard economic analyses where new private owners raise productivity and reduce costs in response to harder budget constraints and stronger drive for optimum profit generation which heightens disregard for safety of operation and which certainly will manifest in high-scale train accidents”.

On alternative approach to restructuring the nation’s rail transport industry, the union said: “We believe very strongly that privatisation of the railway industry will not achieve for the nation any meaningful result. Rather, we share in the conviction that alternative approach to repositioning the rail transport industry is through the renewed financial commitment and political will of the Administration of President Muhammadu Buhari to the emancipation of the sub-sector”.

NUR added: “Your Excellency, in furtherance of the poise to reposition the Corporation, we implore your government to formulate, for guided implementation, a long-term rail transport investment policy that will achieve for the nation integrated transport development which ultimately will guarantee major future infrastructure renewals/track modernisation; procurement of more locomotives to strengthen the motive power base of the Nigerian Railway through partnership with locomotive-manufacturing countries like Brazil, United States, United Kingdom; procurement of more wagons and coaching facilities so as to optimise the additive advantage of the trains.”

The union also called for the creation of a Federal Ministry of Railways saddled with the aforementioned roles, “together with a detailed scope of advisory/regulatory functions, will go significant mileage in achieving for our great country an effectively and efficiently viable rail transport sub-sector.

This option is very imperative as railway had suffered abysmally low budgetary allocation under past governments, in view of the subsisting nature of the railway business as being highly capital-intensive, under the federal ministry of transport where it shares allocations with other modes.

“In fact, it is on record that there were some occasions when railway had zero budgetary allocation. Having a ministry for the monolithic concern of administering over the rail transport industry, your Excellency will agree with us, is long overdue so as to achieve similar meteoric development and growth our dear nation enjoys in its Aviation sub-sector.

“While there is patriotic need for your government to critically look into what has become of the 2006 collaboration between Nigeria and China (through China Civil Engineering Construction Company) with a contract sum of $8.3 billion and over which $1 billion was alleged to have been diverted without due diligence, we implore your Excellency to appreciate the wisdom in investing in the railway so as to achieve an enhanced capacity that will attract optimal market share to the rail mode with a fare regime set at a level that will encourage people to leave their cars and short-haul flights.

“This, without any iota of doubt in our mind, is a patriotic and more honourable path that leads to entrenching public ownership and democratic accountability which are inseparable twins that make wider social and economic change happen.

“As a responsible and patriotic Union, we support the zeal and great passion of your Administration to make Nigeria a better and more livable place for all. We shall not hesitate to give your Excellency and Administration all fraternal cooperation required of us in your continued quest for a more socio-economically relevant, effective and vibrant rail transport system in Nigeria. This is a task and service we owe our dear fatherland, Nigeria.

“While looking forward to the consideration of our informed position on the development of railway in Nigeria, we pray fervently that God will, in His infinite mercy and through your Administration, lift Nigeria to greater heights”.

Titled: “Need For Sagacity and Caution on Privatisation issue of the Nigerian Railway Corporation”, the union said there is need for caution and “sagacity” before the intended privatisation of the Nigerian Railway is embarked upon.

Going down memory lane, NUR said: “You may wish to know that Nigerian Railway Corporation, which was established in 1898 by the British Colonial Administration, is predominantly a single track narrow gauge system with 3505km of track that exists in two axial lines (Lagos – Kano – Kaura Namoda and Maiduguri – Port Harcourt).

“In the 1980s till 1990s when the bane of the railway industry in Nigeria had been paucity of funds, lack of maintenance of the fixed and movable assets, general system deterioration, lack of service supports, dearth of locomotives, wagons and coaching facilities as occasioned by several years of neglect by the federal government, the decadence has been evidently monumental.

“Before the relapse of the Corporation to the dysfunctional state as stated above, the Corporation has fared very enviably well to a point that it declared huge profits in 1964. In fact, funds were taken from the Railway to birth several other public corporations. Nigerian Railway has existed as public transport all through this period it was performing its socio-economic role as the nation’s mass carrier of passengers and freights (especially agrarian produce from the hinterlands to the seaports for onward shipping to Europe) till its induced eclipse which necessitated the on-going rehabilitation since 2009.

“Your Excellency, it is pertinent to mention here that the fortunes of the Corporation have improved tremendously since 2009 when comprehensive rehabilitation of the entire system began. Though, there are many more milestones to be achieved, it is heartwarming to know that the track is now busy with movement of passenger and freight trains across the country. The continued political will and sustainable financial commitment of the federal government to the repositioning of the Nigerian Railway have achieved all this.

“We are aware that since the beginning of privatisation around the globe far back in the 1990s, railway restructuring has been vehemently driven not only by general economic and social trends but by the World Bank and other international institutions and, most unfortunately, privatisation of railway industries has not really clearly availed the citizens all the derivatives promised to come with the exercise.

“Consequent upon the foregoing, your Excellency, we reason that the outcome of such privatisation and accruing experience cannot be any different with Nigeria even considering the fact that most privatisations already carried out in the country have not produced the sustainable investment that is supposed to be the ultimate benefits.

“We wish to mention here that in spite of the global spread in the privatisation doctrine, there are some countries that still run their railway system as a public transport and are verifiably prosperous. New Zealand, for instance, has refrained from privatisation on the realisation of its government that privatisation cannot deliver the massive investment needed in its infrastructure.

“Spain is another typical example of high-speed rail transport that developed astronomically and steadily while remaining public despite the European Union’s pressure to privatise and liberalise it. There are many others, including British Railway, which has renationalized their railway industries when privatisation failed”.