I highly doubt that a well-designed railway from Lagos to Ibadan is inherently noncompetitive with what it must compete against (FG roads, air transport.)

If someone shows me some #s suggesting that it is unlikely to be profitable, then sure, I'll buy that. But right now, from intuition I believe the opposite. I suspect that it'd even be a cash cow.

ola olabiy:

The said allocation is NOT enough to fund fund big projects. In a state where drinkable water is a luxury, Ekubear.

But no one really funds such projects with just a public purse.

ola olabiy:

Ekubear, high-speed trains are still NOT profitable in Britain. After hundreds of years, still being subsidized.

Thats a bad example because the UK is a welfare state. Rail companies have been making considerable profit in the US despite no new investment in infrastructure in a long time.

ekt_bear:

@ola olabiy: Of course it is not. Am I expecting the 6 SW states to come up with the lion's share of the money to fund this rail themselves? No. They'll contribute land and some token startup cash, but the bulk of the money will be invested by private investors.

Rail was profitable in the US in the early 1900s. Let us not assume that this will need to be subsided in Nigeria.

The said private investors will operate big resounding losses. An average Oduan will be priced out of these services.

EXxcept you want safety compromised. And, with a fatality, your rail network will be jettisoned by my people as we don't like dying.

ekt_bear:

I highly doubt that a well-designed railway from Lagos to Ibadan is inherently noncompetitive with what it must compete against (FG roads, air transport.)

If someone shows me some #s suggesting that it is unlikely to be profitable, then sure, I'll buy that. But right now, from intuition I believe the opposite. I suspect that it'd even be a cash cow.

A cash cow?

A complete DOG, Eku.

ekt_bear:

I highly doubt that a well-designed railway from Lagos to Ibadan is inherently noncompetitive with what it must compete against (FG roads, air transport.)

If someone shows me some #s suggesting that it is unlikely to be profitable, then sure, I'll buy that. But right now, from intuition I believe the opposite. I suspect that it'd even be a cash cow.

The number of people travelling between Lagos and Ibadan for parties alone will make it profitable before commerce is even included.

ola olabiy:

The said private investors will operate big resounding losses. And average Oduan will be priced out of these services.

EXxcept you want safety compromised. And, with a fatality, your rail network will be jettisoned by my people as we don't like dying.

You can't shoot down this idea without actual feasibility and viability studies. At the inception stage, you only discuss the idea. We don't have the necessary data to make an economic decision.

ola olabiy:

High-speed rail before drinkable water?

Fast and efficient mode of transportation is the # method of transforming any society, water will come via easy flow of goods and services. Yes they don't have much, but they do have land and capable manpower, that is something. We have industries in Lagos and Ota, Osun could be turned into our regional food basket without any need for other resources and the presence of an efficient mode of transportation to get in and send out goods and services is a plus.  

I hate to compare with japan, but they don't have any natural resources, but they are one of the worlds largest economies.  


The region is not lacking anything at all, we have oil, we have banks and industries, we have educated manpower, we have 3 major refineries ready to go, we have 2 major free trade zones ready to transfer modern technology and hire millions of people from up stream to downstream, we, have arts and entertainment, we have the Energy city in Badagry set to be energy capital of the whole western region with a new 10 lane freeway to transport our goods and services across west africa.

We are good and ready to go,

Katsumoto:

The number of people travelling between Lagos and Ibadan for parties alone will make it profitable before commerce is even included.
You can't shoot down this idea without actual feasibility and viability studies. At the inception stage, you only discuss the idea. We don't have the necessary data to make an economic decision.

Do you expect private investors to wait a hundred year before breaking even. When banks are on your heels.

You gave the US example. The govt there put in place the facility before transfering them to the private sector.

Please, give an idea of the necessary seed capital?

ola olabiy:

A cash cow?

A complete DOG, Eku.

Eku, not abusing you with the word DOG o. Just referring to BCG Strategy.

ola olabiy:

Do you expect private investors to wait a hundred year before breaking even. When banks are on your heels.

You gave the US example. The govt there put in place the facility before transfering them to the private sector.

They weren't transfered for free; there was a consideration.
Again, we can't be speculating on how long it will take to break even.

ola olabiy:

Eku, not abusing you with the word DOG o. Just referring to BCG.

I am sure he knows that.

Eko Ile:

Fast and efficient mode of transportation is the # method of transforming any society, water will come via easy flow of goods and services. Yes they don't have much, but they do have land and capable manpower, that is something. We have industries in Lagos and Ota, Osun could be turned into our regional food basket without any need for other resources and the presence of an efficient mode of transportation to get in and send out goods and services is a plus.  

I hate to compare with japan, but they don't have any natural resources, but they are one of the worlds largest economies.  


The region is not lacking anything at all, we have oil, we have banks and industries, we have educated manpower, we have 3 major refineries ready to go, we have 2 major free trade zones ready to transfer modern technology and hire millions of people from up stream to downstream, we, have arts and entertainment, we have the Energy city in Badagry set to be energy capital of the whole western region with a new 10 lane freeway to transport our goods and services across west africa.

We are good and ready to go,

Are you talking about federating units?

Katsumoto:


I am sure he knows that.

I reckon, too.

But make I clarify small before abuse begin rain ni o

But, Eku no dey abuse sha.

ola olabiy:

Are you talking about federating units?

I know all about the federal implications, but we can not ignore the secondary economy around oil and oil byproducts all the way to refineries and related employment and revenue generation, everything adds up as a plus.

@ola olabiy: Ok, let's do a bit of guesstimation.

Straight line distance from Lagos to Ibadan is 75 miles=120 km (http://www.daftlogic.com/projects-google-maps-distance-calculator.htm).

How much does it cost to lay down a mile of track? Here is one source (http://www.railway-technical.com/finance.shtml) that suggests it could be as little as $2 million per kilometer for a 3rd world country like naija. Even multiply this by a factor of 10, say $20 million per kilometer.

So $2.4 billion for a railroad that connects the two largest cities in Yorubaland.

How much traffic will this railroad see per day? Again to guesstimate, I wouldn't be surprised if it were far more than 50,000 people going roundtrip per day. . . so let's round down a bit and say 15 million trips per year. Even if I'm only charging $10 per roundtrip, that is $150 million in gross revenue a year from passenger traffic alone. Not to mention commercial traffic.

I've probably underestimated the daily traffic on this road by 10X. . . 500,000 people daily is probably a much better estimate.

Anyway, these guesstimates would need to be refined a lot more, and have obviously missed a lot of other important factors. But the basic picture of "cash cow" is pretty accurate, in my opinion. Fee free to disagree/point out where my assumptions might be way off, though.

Eko Ile:

I know all about the federal implications, but we can not ignore the secondary economy around oil and oil byproducts all the way to refineries and related employment and revenue generation, everything adds up as a plus.

Oil? And GEJ will allow that?

ola olabiy:

Oil? And GEJ will allow that?

You mean he will not allow us to build refineries? 3 states in the region are building their own refineries already.

ekt_bear:

@ola olabiy: Ok, let's do a bit of guesstimation.

Straight line distance from Lagos to Ibadan is 75 miles=120 km (http://www.daftlogic.com/projects-google-maps-distance-calculator.htm).

How much does it cost to lay down a mile of track? Here is one source (http://www.railway-technical.com/finance.shtml) that suggests it could be as little as $2 million per kilometer for a 3rd world country like naija. Even multiply this by a factor of 10, say $20 million per kilometer.

So $2.4 billion for a railroad that connects the two largest cities in Yorubaland.

How much traffic will this railroad see per day? Again to guesstimate, I wouldn't be surprised if it were far more than 50,000 people going roundtrip per day. . . so let's round down a bit and say 15 million trips per year. Even if I'm only charging $10 per roundtrip, that is $150 million in gross revenue a year from passenger traffic alone. Not to mention commercial traffic.

I've probably underestimated the daily traffic on this road by 10X. . . 500,000 people daily is probably a much better estimate.

Anyway, these guesstimates would need to be refined a lot more, and have obviously missed a lot of other important factors. But the basic picture of "cash cow" is pretty accurate, in my opinion. Fee free to disagree/point out where my assumptions might be way off, though.

Let's just agree with your guesstimate.  It is still not viable.

150 USD gross. The running costs/salaries/logistics costs/miscellaneous/ maintenance of such a large operation will be close to the gross if not more. Also, there will be disruptions/ power outages which will make your number of passengers less than 50,000 within a month. They want realiability. They have to be at work, after all.

And, how do you source power for a project like this without our national grid?

And, 2.4 billion? Just like that? Close to half a trillion naira? The govts have to share about 70% between them in order to attract investors. Do you now expect Osun State to pay 1.8 billion dollars (with others) -about 300 million dollars each - without expecting immediate gains?

Do Osun and Ekiti have the money?

Sigh

Who told you that any of those states would be contributing that much money 

Or did Lagos State spend the $1 billion on each of the 7 lightrail routes it setup? Or did it instead find outside investors? Did it even spend $1 billion on the Lekki road? Or Eko Atlantic?

You are too pessimistic. . . unrealistically so. Things are happening in Lagos using entirely private funds. I'd like this to be mostly private funds too. It is a for-profit venture, not a charity.

Anyway, you seem to disagree that it'd be profitable for investors. We'll have to agree to disagree, I guess.

ekt_bear:

Sigh

Who told you that any of those states would be contributing that much money 

Or did Lagos State spend the $1 billion on each of the 7 lightrail routes it setup? Or did it instead find outside investors? Did it even spend $1 billion on the Lekki road? Or Eko Atlantic?

You are too pessimistic. . . unrealistically so. Things are happening in Lagos using entirely private funds. I'd like this to be mostly private funds too. It is a for-profit venture, not a charity.

Anyway, you seem to disagree that it'd be profitable for investors. We'll have to agree to disagree, I guess.

You are making references to Lagos state. A state that can survive without FG? Osun nko? At least 150 million dollars will be paid by Osun? nope, sir.

ola olabiy:

You are making references to Lagos state. A state that can survive without FG?

What does that have to do with anything? Lagos State wanted to have Good Thing X. They didn't use their own money to get Good Thing X. . . so how much money they have is irrelevant. Since they didn't spend much of their own cash for any of these projects. They instead found investors who wanted to build Good Thing X, make their profit too. That way everyone wins. . . Lagosians get nice infrastructure, and the investor makes profit.

So what does the FG have to do with any of this? Or Lagos State's revenue

All the investor cares about is, "after investing this much money, will I recoup my investment and make profit at the end of the day?" That is all that matters.

ola olabiy:

Let's just agree with your guesstimate.  It is still not viable.

150 USD gross. The running costs/salaries/logistics costs/miscellaneous/ maintenance of such a large operation will be close to the gross if not more. Also, there will be disruptions/ power outages which will make your number of passengers less than 50,000 within a month. They want realiability. They have to be at work, after all.

And, how do you source power for a project like this without our national grid?

Ola, if we are going to make any giant leap, railways is the way to go. It is the future.

We might not get there in 4years but we must start somewhere, and the earlier the better. Also, no one is suggesting it will be a wholly private venture also.

I actually believe it will be viable under a proper management devoid of corruption. Truth is there is no better alternative.

ekt_bear:

What does that have to do with anything? Lagos stated wanted to have Good Thing X. They didn't use their own money to get Good Thing X. . . so how much money they have is irrelevant. Since they didn't spend much of their own cash for any of these projects. They instead found investors who wanted to build Good Thing X, make their profit too. That way everyone wins. . . Lagosians get nice infrastructure, and the investor makes profit.

So what does the FG have to do with any of this? Or Lagos State's revenue

All the investor cares about is, "after investing these billions of dollars, will I recoup my investment and make profit at the end of the day?" That is all that matters.

What I am saying is Lagos will always have investors who are interested. They know that Lagos is rich enough to meet its obligations.

Osun is crippled - financially! No private sector in Osun. It is non-existent.

Lagos is industrialized, the commercial nerve centre of West Africa.

OAM4J:

Ola, if we are going to make any giant leap, railways is the way to go. It is the future.

We might not get there in 4years but we must start somewhere, and the earlier the better. Also, no one is suggesting it will be a wholly private venture also.

I actually believe it will be viable under a proper management devoid of corruption. Truth is there is no better alternative.

Let a rich Lagos do it first within its metropolis.

If feasible, others can follow.

Guys, you are talking about major, capital investments. Railway is primarily Government even in the West. The structure e.g. tracks, must be laid by the government.

All this disruption/power outage stuff only happens with GOVERNMENT OWNED business.

Do you see this happen in the western world, with things run by proper businessmen trying to make a profit?

Anyway, trains can run on diesel. This is likely what you'd use, not electricity.

ola olabiy:

What I am saying is Lagos will always have investors who are interested. They know that Lagos is rich enough to meet its obligations.

Osun is crippled - financially! No private sector in Osun. It is non-existent.

Lagos is industrialized, the commercial nerve centre of West Africa.

Lagos has no obligations with the light rail, if I'm not mistaken. They just said, "Hey, build this rail on this route. Each route costs $1 billion. Invest the money, and recoup your profit through fees you charge on users."

So how does the wealthiness of Lagos/Osun come into play here? Lagos State can be very poor. . . but so long as the businessman knows he can get enough traffic and charge a fair price for his service, he'll make his money. The investor/business doesn't have Lagos State/Osun State as its customers. It has people.

All  it cares about is, "can I get enough traffic on this route to make my money?" Everything else is secondary.

A new track has just been abandoned in London. a major one. The private sector didn't want to fund it and the new govt bucked.

We can only move forward if we thread the part that Awo, Jakande thread:

Selfless service - don't think about urself alone; what about other people wanting education

Commitment to achieving a goal - they were interested in leaving a positive legacy

Start small, think big - schools were built on visually all the major streets of Lagos, Ogun etc as well as affordable housing.

Respect to human dignity - compare the life these new governors want to Jakande and Ajasin.

My dear brothers, dream is good yet the realism on ground tells me that we may have a very minute success ( ref: Fashola/Tinubu cold war )

Lets pray for them and not just wish. They are politician to the core; lairs to the bones, these ones

ola olabiy:

What I am saying is Lagos will always have investors who are interested. They know that Lagos is rich enough to meet its obligations.

Osun is crippled - financially! No private sector in Osun. It is non-existent.

Lagos is industrialized, the commercial nerve centre of West Africa.

You are not looking at the multiplying effect of this project in the long run; can you imagine how many companies/businesses that will spring up as a result of this?

And with constant development and GDP growth, I do not expect Osun and Ekiti to remain the way they are, look beyond 10 years Ola.

bfire:

We can only move forward if we thread the part that Awo, Jakande thread:

Selfless service - don't think about urself alone; what about other people wanting education

Commitment to achieving a goal - they were interested in leaving a positive legacy

Start small, think big - schools were built on visually all the major streets of Lagos, Ogun etc as well as affordable housing.

Respect to human dignity - compare the life these new governors want to Jakande and Ajasin.

My dear brothers, dream is good yet the realism on ground tells me that we may have a very minute success ( ref: Fashola/Tinubu cold war )

Lets pray for them and not just wish. They are politician to the core; lairs to the bones, these ones

My brother, we can only hope o.

With the selflessness of Fashola/Fayemi. . . . SW will get there.

London, it probably costs a sh1tload of money to lay down a mile of track. Office buildings, residences, power lines, terrain, all sorts of nasty things you must avoid.

On the other hand, Yorubaland looks like this: http://i56.tinypic.com/acq2v9.png

So laying down each mile of track WILL be much cheaper than laying down a mile anywhere in the UK.

The UK is not the right country to compare. The US is. There are vaste swathes of undeveloped land in the US. Same in Yorubaland. In the UK, there isn't. So don't compare to UK.

ekt_bear:

All this disruption/power outage stuff only happens with GOVERNMENT OWNED business.

Do you see this happen in the western world, with things run by proper businessmen trying to make a profit?

Anyway, trains can run on diesel. This is likely what you'd use, not electricity.
Lagos has no obligations with the light rail, if I'm not mistaken. They just said, "Hey, build this rail on this route. Each route costs $1 billion. Invest the money, and recoup your profit through fees you charge on users."

So how does the wealthiness of Lagos/Osun come into play here? Lagos State can be very poor. . . but so long as the businessman knows he can get enough traffic and charge a fair price for his service, he'll make his money. The investor/business doesn't have Lagos State/Osun State as its customers. It has people.

All  it cares about is, "can I get enough traffic on this route to make my money?" Everything else is secondary.

Again, leave Lagos out of this, it has a rich/middle class populace. Osun doesn't!

Who will pay for such in Ila Orangun? We are just here creating an idea of Eldorado on Nairaland.

ola olabiy:

A new track has just been abandoned in London. a major one. The private sector didn't want to fund it and the new govt bucked.

SW states are just developing and cannot be compared with a developed city like London with a lot of options and viable alternatives, the opportunities are more in SW.