After it emerged that the Federal Government spent $62.66m to service railway-related debts in the first quarter of 2023, going by Nigeria’s external debt service payments report by the Debt Management Office, a railway project management consultant based in London, United Kingdom, Mr. Rowland Ataguba, has described the development as heart breaking.
On his LinkedIn platform, the consultant wrote:
“This is a heartbreaking situation but not totally unexpected. A combination of a flawed railway business strategy, self inflicted injury and unforeseen circumstances have conspired to put our railway and government in a serious dilemma.
“In Q1, according to this report, NRC revenues were less than $2m while the FG’s railway debt repayment for the same period was $38m. In the case of Abuja RMT, revenue in the same period is $0 while debt repayment is $24m.
“The main beneficiaries so far of our railway investments are: 1. CCECC the contractor who has been paid for work done.
2. China Exim Bank the lender who is being repaid.
3. Railway vandals who are stealing railway assets and not caught.
4. Bandits who kidnap travellers and reportedly collect huge ransoms
5. Railway officials allegedly involved in ticket racketeering.
“The vast majority of Nigerians are yet to see any benefits. In essence we are robbing Peter to pay Paul.
“This is clearly unsustainable and urgent action is required. I say, if we had diligently implemented the 25 year vision as prescribed, the impacts of insecurity/banditry, the pandemic and energy crisis which has hit railway performance hard would have been ameliorated.
“Yar’Adua’s government’s decision on Lagos-Kano SGRMP compounded issues as has our over-reliance on China to fund railway projects. Opaque procurements of railway contracts have simply made it all worse.
“As for Abuja RMT, God help us! It’s in real danger. The writing is on the wall.
“The NRC must start seriously co-operating with efforts to reform and restructure it or it will die a death of a thousand cuts. Its objections and negative disposition to reform is what is holding it back. In other countries, railway is helping to solve problems while in our case, railway is part of the problem.
“Time to change course is now and may God help us all.”
Recall that a report in The PUNCH newspaper on Saturday said the Federal Government spent $62.66m to service railway-related debts in the first quarter of 2023, according to Nigeria’s external debt service payments report by the Debt Management Office.
The report adds: Between January and March 2023, The Nigeria Railway Modernisation Project (Idu-Kaduna Section) took $23.1m
The Nigeria Railway Modernisation Project (Lagos-Ibadan Section) gulped $15.49m.
The PUNCH also learnt that the Nigeria Abuja Light Rail Project gulping $24.07m.
The total amount spent in Q1 2023 is a slight increase from the $61.73m spent in Q1 2022.
The rising railway debt servicing costs occurred as the government struggled to generate revenue from the railway sector.
The National Bureau of Statistics disclosed that rail transportation passengers declined by 53.65 per cent from 953,099 in the first quarter of 2022 to 441,725 in the first quarter of 2023.
The statistics body noted that a total of 59,966 tonnes of goods were transported in the first quarter of 2023, compared to 39,379 tonnes reported in the same quarter of 2022.
In terms of revenue generation, N768.44m was received from passengers over the period, a decrease of 63.02 per cent relative to N2.08bn in the same quarter of the previous year.
A professor of Economics at Olabisi Onabanjo University, Sheriffdeen Tella, recently said a number of factors, such as insecurity, among others, affect the patronage of train services in the country.
He said, “It’s being affected by insecurities, the cost of transportation, i.e., fare compared with other modes, and maintenance of the facilities, i.e., maintaining a standard of operation.”