Reviving Nigeria's rail network through public-private partnerships

Rail transportation, much neglected for the past half decade, is in the midst of a revival as old lines and assets undergo modernisation and are put up for privatisation, and new infrastructure is concessioned through public-private partnerships (PPPs). Traffic volumes are set to increase with rail looking to secure a position as a key mover of goods and people, as dormant services start up again and new lines are constructed.

Rehabilitaion

Rail contracts in excess of $3bn have been awarded since 2009, and the Nigerian Railway Corporation (NRC) has been allocated a budget of N104bn ($634.4m) over the past five years. Much of the focus to date has been on restoration, with 90% of the system earmarked for upgrades. Services have recommenced on the vital 1124-km inter-city passenger line linking Lagos and Kano, and the 1167-km Port Harcourt-Maiduguri route is being rehabilitated. Current efforts to double-track the 1.5-km route connecting the main port of Apapa to the inland rail network, although much shorter, are key for inter-modal freight movements.

Coming On-Stream

The new high-speed, double-gauge, 185-km line between Abuja and Kaduna State, completed at end-2014, should dramatically reduce commute times. Costing around $875m, the project was contracted to the China Civil Engineering Construction Corporation, which is also responsible for a 180-km, double-tracked line from Lagos to Ibadan.

In all, construction contracts have been awarded for seven cross-country projects, with feasibility studies on eight more in 2014. Other long-haul, inter-city passenger lines covering Lagos to Benin City will be constructed (300 km), along with a high-speed rail project from Lagos to Abuja (615 km). In addition, a new commodity line will connect the Itakpe iron-ore mine, the Warri coal mine and the Delta Steel plants via Ajaokuta. Also up for PPPs, as part of a broader effort to unbundle and privatise NRC assets, is the remodelling and redevelopment of nine rail stations in the country. The terms and conditions for the new contracts are largely similar, with the government providing fixed infrastructure and the private sector responsible for rolling stock and signalling. “We are observing the most interest in the Lagos-Benin and Lagos-Abuja lines, as they are more commercially viable routes,” Tola Sapara, business development manager for Alstom, told OBG. “The other routes may need more government funding and backing to generate investor interest.”

Urban Rail

Abuja is currently constructing bridges and stations for a light rail network that could carry up to 700,000 daily commuters between the city centre, satellite towns and the international airport. Pegged for completion in 2015, though expected to take longer, the project will make Abuja the second city to launch mass passenger rail services, after Lagos, which is building a system of up to seven lines.

Once operational, Lagos will no longer be the world’s only mega-city without an urban rail network. The blue line, a 27-km, 13-stop route between the marina area and Benin border, is expected to be the first completed. A consortium led by the state government has put up the funding, though subsequent lines will be constructed via concession arrangements. The north-south, 37-km red line linking Agbado to the marina area via the international airport will be structured as a fiveyear build-operate-transfer (BOT) agreement, with the concessionaire building the track and providing rolling stock. “We needed to build the blue line ourselves to prove that it can be done. The remaining lines will be set up as BOTs, as we believe that independent costbenefit analyses will show that there will be patronage and commercial viability,” Frederic Oladeinde, the technical advisor for transport planning at the Lagos Metropolitan Area Transport Authority (LAMATA), told OBG.

According to LAMATA, daily travel times could be reduced from an average of 1.5-2 hours to 55 minutes, while the percentage of income spent on transport will drop from 40% to 25%. The metro forms part of the city’s integrated transport master plan, which runs through 2032 and includes a bus rapid transit system, outer-ring routes, passenger ferries and a cable car.