₦airaland Forum

The Chairman of the Federal Character Commission (FCC), Prof. Oba AbdulRaheem, was quoted recently as saying, “18 states are not currently benefitting from the ‘federal character principle’ of the 1999 Constitution”. The states were described as having low representation in appointments into Federal Ministries and Agencies.  According to the Prof. AbdulRaheem, each of the 36 states is expected to have about 2.5 % and 3.0% representation in appointments made by Federal Ministries and Extra-Ministerial Departments. A source from the FCC was also quoted as saying “the implication of the current irregularity is these states may not have civil servants from their states in the hierarchy of the Federal Civil Service in the next few years”.

One of the major fundamental errors in the 1999 Constitution is principle of ‘federal character’. Section 14(3) of the 1999 Constitution states that “The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty, thereby ensuring that there shall be no predominance of persons from a few State or from a few ethnic or other sectional groups in that Government or in any of its agencies”. While some might disagree, it is my opinion that the inclusion of this provision within the constitution has contributed immensely to the paucity of development in the country. It is time we begin to challenge some of these principles. Firstly, we need to ask ourselves, what can be defined as our federal character?

Unfortunately, this principle has been used to accelerate the promotion of mediocre and incompetent civil servants into top government positions. The same can also be said about Ministers. People get handed ministerial portfolios not because they are competent but because they are representing the interest of particular state or ethnic group. I agree that ministerial appointments are political, and in most cases the President has to satisfy his electorates. However, what about Director-Generals of federal ministries and parastatals? Why can’t appointments be made purely on individual merit?

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This government cannot stop amusing me. You don't need Adam Smith to tell you the cause of unemployment in Nigeria.

A government that does not even know the number of unemployed in the country is now talking about social security. We have to rely on UN, World Bank etc to give us figures on unemployment.

Can any country afford a social security system with an unemployment rate of over 50%?

One of the largest employer of labour are small businesses. However most of the small businesses in Nigeria have been gradually eroded due to lack of stable power supply. People who could have been employed in small businesses are all riding 'okadas'.

Job creation is the key!

The Federal government had stated its readiness to offer succour to Nigerians hit by poverty arising from the ongoing global economic meltdown by implementing an integrated social security policy which will carter for the unemployed, disabled and retirees in the country.
To facilitate this, yesterday government inaugurated a committee headed by former Head of State, General Yakubu Gowon, to come up with a draft national social security policy.
The inauguration of the welfare committee comes just a week to the hosting of a major summit on employment through which government hopes to map out strategies for reducing unemployment in the country.
Labour and Productivity Minister Adetokunbo Kayode, who stated this in an interview shortly after inaugurating the National Working Committee on the Draft National Social Security Policy for Nigeria, said government was embarking on a very proactive policy on employment generation.
“Federal government intends to henceforth implement a proactive welfare intervention programmes that would address the needs of less-privileged Nigerians and drastically reduce poverty in the land,” he said, explaining that the setting up of the committee with respected and tested personalities was enough testimony to the seriousness of the administration.
Among other things, the Gowon committee is to propose a draft national social security policy which will cover both the formal and informal sectors of the economy.
Kayode said the committee had also been mandated to produce a strategy document on how best to implement the policy to achieve the overall objective of providing functional and sustainable welfare package for the needy in the country.
Other terms of reference of the committee are that it should recommend options for an integrated national social security scheme as well as develop an administrative structure for effective implementation of the policy.
The Gowon committee, which has three months to submit its report, is also to review some aspects of the Pension Reform Act of 2004 and the National Social Insurance Trust Fund (1983) to see how it could infuse in them a comprehensive action plan for addressing poverty and deprivation in a more holistic manner.
While lamenting the level of poverty and social degradation wrought on an average Nigerian, Kayode said it was regrettable that a country that has over 140 million people and acclaimed as the sixth largest exporter of crude oil in the world would be found at the bottom ladder of countries with low human development and low income category index.
According to him, the challenges posed by unemployment, mass poverty and social exclusion have informed President Umaru Musa Yar’Adua’s commitment to substantially improve the quality of life of the vast majority of Nigerians.
Gowon noted that Nigerians had over the years continued to witness a gradual but steady decline in their standard of living with no end in sight.
“The unpredictable prices in the crude oil market, our economic mainstay as a nation, rising unemployment rates as more and more companies succumb to the inclement business climate, widening income inequality, rising cost of goods and services, the effect of the environment and of course, the current financial economic meltdown affecting all major economies of the world with its ripple effect on developing nation have all taken a huge toll on the abilities of several members of our society to be able to afford the basic necessities of life,” he said.
He pledged that his committee would work hard to come up with practical and implementable recommedations.

lucabrasi:
in this age of rapid and massive technological advancements,i dont believe anyone will come online and assert that a rail line is a waste of time/resources, rather than putting a tribal spin to it as is usual in most discourses on here,make an objective and pragmatic appraisal and you will discover how totally wrong you are

I will continue to maintain that the rail project is a colossal waste of taxpayers money. The question is, why do we need to modern 1315km of rail line between Lagos and Kano and our major cities are no mass public transport system? Did the government undertake any feasibility study on the project? What will be patronage demand?
Let us start by providing effecient rail system in our major cities first. Lagos with a population of 17 million is in desperate need of a rail system. The proposed light rail is only costing a fraction of the lagos-kano project.

Also, why will the government award a contract of $18bn without regard for competitive tendering? In fact I understand that there was no project scope. So basically the project scope was written by the contractor!. To say the least, Obasanjo should have been sent to jail because of the way and manner this project was handled.

sbo:
So as far as you're concerned, El-Rufai should be let to go scot free as long as he isn't in Nigeria, abi?

Don't get me wrong. I'm not saying el-Rufai should go scot-free. In fact, I believe he should travel back to Nigeria to defend the allegations levelled against him. And if he is guilt, should be dealt with.

My concern however is that, we have an organisation who has not being able to prosecute home-based corrupt officials and it is now talking about extradition. Do you think extradition is that easy? It takes time and resources? Why the distraction? Let them see the ongoing cases to a logical consludion before embarking on international goose chase.

Also does the Govt think the UK govt will cooperate in any extradition case, when the same Attorney General frustrated the trial of former Governor in the UK.

It's all joke!
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We need to ask ourselves why was the Senate quick to indict el-Rufai but the wouldn't release the Power Probe Report.

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mikeansy:
Let the fight against corruption stop. It has failed and let us concentrate on what we can build in terms of development.

I personally think the fight against corruption is now an insult on the intelligence of Nigerians. It is getting more irritating by the day.

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This is just another distraction of the 'anti-corruption' crusade. While I'm not against el-Rufai facing corruption charges, why waste taxpayers money on fighting an extradition case when there are still dozens of local cases/investigation hanging over the EFCC's head?

An anti-corruption organisation that cannot even successfully prosecute 'home-based' corrupt former governors or ministers is now talking about extradition. This is just a ploy to distract people away from ongoing cases such as Halliburton etc that the EFCC is not interested in pursuing.

Madam Waziri, please see the ongoing prosecution of the former governors to a logical conclusion before embarking on this GOOSE CHASE!

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EFCC begins extradition process against el-Rufai
By Olufemi Adeosun, Abuja
Published: Thursday, 16 Apr 2009
The Economic and Financial Crimes Commission, on Wednesday said it will begin extradition processes against former Minister of Federal Capital Territory, Mallam Nasir el-Rufai to answer the charges against him.

The chairman of the EFCC, Mrs. Farida Waziri, who said this during a press briefing in Abuja, said the anti-graft agency had filed relevant papers in court seeking his extradition.

She said, “The process of extradition could be cumbersome we are determined to explore it so that he can answer to the charges against him.”

When asked when the extradition would take place, Waziri said that as soon as relevant documents were obtained from the court.

Petitions had been written against el-Rufai since he left office, one of which was how he allegedly mismanaged N32bn accruing from the sale of Federal Government property in Abuja.

When every attempt to make el-Rufai submit himself to interrogation proved abortive, the EFCC had earlier in the year declared him wanted, and reportedly employed the service of Interpol to help in tracking him down.

He was also said to be arraigned in absential last week in Abuja on Thursday.

On the alleged fraud, the commission sometime raided System Property Development Consortium, a company believed to have been used by the former minister, as a front to divert government lands.

Recovered from the company during the raid were documents belonging to the Federal Capital Development Area. The documents included land allocation forms, list of revoked lands among others.

During his tenure, he was also alleged to have allocated land to 45 fictitious people, including, his family members.

But el-Rufai has consistently debunked the accusations.

Meanwhile, the EFCC boss said that the commission had recovered about N50bn looted fund in the last nine months. She explained that it also secured about 50 convictions within the period under review.

Reacting to statements attributed to the former Minister of Federal Capital Territory, Mallam Nasir el-Rufai, criticising the Federal Government’s posture on the Halliburton case, the Attorney-General of the Federation, Mr. Mike Aondoakaa (SAN), said the former minister would soon face corruption charges.

He said the charges against el-Rufai were already established by the Senate Committee on the FCT.

Aondoakaa said, “Nasir is likely to be charged to court on allegation of abuse of office and corruption charges established by a committee of the Senate.

“But before we could do that he went to court to challenge that I cannot charge him to court; I am following due process.”

The principle of 'Federal Character' is one of the major fundamental flaw our constitution. To be frank, it is a bloody waste of time!

It has only allowed 'non-entities' and idiots to find themselves in top government positions that they don't have any clue about. People should be appointed into positions based on merit and not just to satisfy any federal character. And in actual fact, Nigeria is so diverse - with more than 140 ethnic tribes - and how you can objectively reflect this diversity in the bureaucracy is beyond me. It is hole we have dug ourself into. The question we should ask ourself is, as the so-called Federal Character principle brought any development to the nation? The answer is capital NO!

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kay_pumpin:
No one is being unrealistic here,but i do not think a governor that utilizes financial allocation for what it is meant for is worthy of news.He is just doing the service he/she is elected for.

It is bizzare and grotesque how these elected officials are termed messiahs for doing their job.

I totally agree with you. And that is the riddicule we have been subjected to in Nigeria due to bad governance. Why should we praising a Governor for filling potholes, providing boreholes etc. Unfortunately, we are now seeing a case where Governors now receive awards for carrying out their statutory responsibilities. It would even have been better of these mundane projects are 'cost-effectively' executed. Can you imagine contracts for boreholes at N1million each!

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Your Excellency,

I hope this letter finds you in good health.

Firstly, I will like to commiserate with you on the exclusion of Nigeria from the last G20 meeting. I am happy that you expressed your disappointment at the exclusion of a country of 140 million people and sixth largest producer of the world’s ‘most sought after’ commodity, from such an important gathering. However, let me be quick to point out that, the greatness of a nation is not just dependent on its population size or mineral resources, and neither is it dependent on cosmetic re-branding programme.

Your Excellency, you will agree with me that it’s been almost two years since your assumption of office. While there has been no tangible developmental progress been made by your administration, it is unfortunate that we are now beginning to talk about your ‘second term’ in office.

Sir, I agree that as a Nigerian citizen, you have the right seek a second term in office. I also acknowledge that you have not come openly to confirm or deny the current media speculations. However some of your closest aides have made it a point of duty to start the 2011 Presidential campaign on your behalf. But before you make a decision, there is an important question you need to ask yourself. Do I really understand the complexity of challenges facing the country?   

Sir, following my review of your first two years in office, I am convinced beyond every doubt that you do not understand the challenges of your office. Just as the Americans will say. “You just don’t get it”. And if you can’t get it in two years, what makes us think you will in eight years.

I remember all the rhetoric about ‘rule of law’, vision 2020, seven-point agenda when you came into office. The only thing this administration has been successful at doing is reversing all policies of the previous administration. Your government has been stuck in reverse gear for the past two years. You spent seven months to re-constitute your cabinet, within which there was approximately three months of inaction in government ministries, department and agencies. Two years on, your administration is still ‘fart-assing’ around with the Lagos-Kano rail modernisation project. You still don’t have a blue-print for energy sector, the refineries are still not working, you are still talking about highway concessions. How many years of planning do you actually need?

It was interesting to read the comments of one of your closest aides, that the seven-point agenda has been designed to be implemented in eight years. And that you need two years of planning, and six years of implementation, hence the need for a second term. Haba!

If indeed you need two years of planning, then I want to believe that you were never ‘ready’ for the position you currently occupy. And in your case, I want to blame the wicked and callous farmer from Otta, who saddled you with this responsibility. Nobody can be forced into the office of a President, especially in a complex nation like Nigeria. Serious presidential candidates have plans and programmes before they assume office. They undertake series of research into the workings of the government during their campaign. They identify where they can make ‘quick wins’. They develop of list of programmes they will implement in their first 100 days in office. They set targets and benchmark for measuring their success in office. I’m not saying a presidential candidate should be a ‘jack of all trade’, but that is why they appoint intelligent advisers, who x-ray each government departments and help develop policies.

Some of the decisions you have made recently, has highlighted the handicap that exists in your administration. There is an ‘information gap’ within the current government. Mr President, for me, it seems that you lack information on key challenges you are trying to solve. As an example, you announced that you intend generate 6,000MW of electricity before the end of 2009. However, you have failed to tell us how this will be done. You shouldn’t be telling us this after two years in office. An informed President comes into office with mapped out strategy. If President Obama is to spend two years to study America’s problems, then the whole of the US will be sleeping on the streets before then. Nigeria needs a President that will hit the ground running. The challenges facing Nigeria does not require a President that will learn on the job. For goodness sake, been the Governor of Katsina for eight years does not make you an informed person. I’m sorry to say, your actions recently has shown an utter display of ignorance.

I also want to query your judgment in the recent sacking of NNPC Directors. I’m not sure if you read the recent article of Dr Patrick Dele Cole in Guardian Newspaper 6 April 2009  and 7 April 2009. This was the most shocking indictment of the NNPC I have read in my life. I found it interesting that the NNPC Directors were sacked the day after the articles were published. While the nation is dire need of such actions, I can’t seem to understand why the sacked Directors were quickly replaced by their subordinates. These are the same people that have failed to bring any integrity and accountability into the NNPC. Mr President, we need a change from the status quo. Institutions such as the NNPC, NRC are not ‘fit for purpose’, and are in need of thorough cleansing.

I do hope you will take these issues very seriously. While you have a right to seek a second term, it is not a birthright. I understand the enormous power at the disposal of the incumbent in Nigerian politics. The Nigerian Presidency demands more than a ‘good man’. We do not want to be held hostage for another six years of your administration.

Long live Federal Republic of Nigeria.

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http://www.ngrguardiannews.com/editorial_opinion/article02/indexn3_html?pdate=060409&ptitle=NNPC,%20oil%20companies%20and%20Nigeria&cpdate=060409

http://www.ngrguardiannews.com/editorial_opinion/article04/indexn3_html?pdate=070409&ptitle=NNPC,%20oil%20companies%20and%20Nigeria%20(2)&cpdate=070409

What a waste of time!
How many people have been successfully prosecuted under the current anti-corruption legislation? Nigeria is the only country i know where there are multiple organisations involved in fighting corruption. EFCC, ICPC, Serious Fraud Office(Nigeria Police Force), Code of Conduct Bureau.

Do we actually need all these organisations in first place?

Mrs Akunyili, there is no manner of re-branding you can undertake, you are part of a 'rogue' government.

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The more I look into the unfolding events of the Halliburton bribery case, the less I tend to see. I can almost bet on my mortgage that no single Nigerian individual will be prosecuted. The recent comments by the nation’s Attorney-General Chief Michael Aondoakaa cast further doubts on the intent of the nation law enforcement agents to prosecute the culprits. Let’s remind ourselves, this is not first high-profile bribery case involving multi-national companies. We are yet to see any successful prosecution in the Wilbros and AG Siemens bribery cases. A former petroleum Minister was fined five million Euros in France for money laundering few weeks ago in the Wilbros case. However, as I write, no action has been taken by the either the AG or the EFCC to at least question this individual. Considering the track record of the President Yar’Adua ‘anti-corruption’ crusade and supposed adherence to ‘rule of law’, why would anyone think the Halliburton case will be any different.

As we can remember, the US Justice Department indicted two citizens of the United Kingdom for their role in bribing Nigerian government officials to win a lucrative natural gas construction contract for Halliburton Corp. Last September, the Former CEO of Kellogg, Brown & Root (KBR) Jack Stanley pleaded guilty to conspiracy to commit wire and mail fraud and conspiring to violate the US Foreign Corrupt Practices Act (FCPA). The Justice Department noted that he paid more than $180 million in bribes to Nigerian government officials so KBR could win the Bonny Island liquefied natural gas plant contract.

Following these revelations, the Attorney-General (AG) and the Minister of Information have been very quick to make series of remarks and comments. The AG first noted that the government will sue all foreign companies involved in bribery cases in Nigeria for libel, because they have brought the name of the country into disrepute. Following that, the Minister of Information, Mrs Dora Akunyili noted that names of Nigerian officials indicted in the bribery case will be made public once received from the US Justice Dept. We were also led to believe that the AG has written to the US Justice dept three times regarding the indicted officials, but yet to receive any reply.

I will note that all sorts of names have been banded around in the media. I’m not interested to join in the speculations about who is or who is not involved. However, I want to advise the AG that he does less talking for now, as some of the comments he has been making recently can be considered to be ‘prejudicial’. The bribery case is still under investigation in Nigeria and therefore it is improper for him to be making such remarks and the nation’s Chief Law Officer.

The remarks being made by the AG, are the reasons why I want to believe that nothing will be achieved in this investigation, and the AG might only be paying a lip service to the ‘fight against corruption’. According to the AG, $150 million of the alleged bribe has been discovered in a Swiss account. While he refused to name the account holder, he was quoted as saying “…, government does not prosecute out of the newspapers' cuttings. If somebody said I voted $40 million for you, which is his own wish, and if the money does not reach you, can I come and prosecute you because in his book he wrote $40 million”. I find this statement damaging and insidious, and could potentially derail the current investigation.

I accept that the government cannot initiate prosecution based on newspaper reports and that ‘hard evidence’ is required. And in actual fact, the ‘burden of proof’ is on the government to demonstrate beyond every reasonable doubt that any named suspect was actually involved in the alleged bribery. You may call me a conspiracy theorist but I want to draw one important thing from that statement, which proves to me that the so-called AG/EFCC investigation is joke.

Initially, we were told that at least more than six top Nigerian officials were involved in the bribery scandal. But now, the AG noted the $150million has been discovered in one account. According the AG’s tone of language, he wants us to believe that the money might have been pocketed by someone. Also, that all named suspects might not even have collected any bribe in the first place, and the fact that they were named in the US trial is not good enough.

But my question is why the AG is so quick to jump to such conclusion? On whose behalf is he actually acting? The fact that there is no evidence to show that Mr X was paid A$million does not mean he is not guilty of the charge. The first thing that should be established in this investigation is the ‘intent’. If Mr X has agreed to received A$million, and for someone reason he couldn’t be paid then he is culpable.

My concern is that the ongoing investigation will be based on whether money was actually received by the suspected individuals. As we can see with $150 million found in one person account, there is already a presumption of innocence. I agree that everyone is innocent until proven guilty. However it is for this reason why I think the AG should at least keep his mouth shut! This case is not just about money being paid or received. For the KBR officials to have named the Nigerian officials, there must have some form of agreement to collect and transmit bribes. By the way, the KBR officials are not Nigerians, and what do they stand to gain from name dropping? It is my understanding that KBR established a highly sophisticated network, which facilitated the bribe payments over a number of years. Therefore the evidence and statement provided at the US court is very crucial to the Nigerian investigation.

I’m not convinced that there is no ulterior motive to bury this case. My suspicion is, the investigation will only focus on the account holder. And since EFCC or the AG will not be interested in establishing whether there’s been collusion or intent to receive bribes, the major actors in the bribery scandal will be absolved from any wrongdoing.

Whatever be the case, the whole world is watching
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It was interesting to read about the plans by the Lagos State Government to commence a full operation of 24-hour surveillance cameras in Lagos. The cameras are aimed at monitoring daily situation across the metropolis through a network of security and command centres. The multi-million naira initiative which is to be executed under the Safe City Project is being financed through the Security Trust Fund of the state government.

It may be recalled that Governor Babatunde Fashola of Lagos State, at the commemoration of his 400 days in office disclosed plans to install Close Circuit Television (CCTV) across the state as part of efforts to particularly reduce crime rate.

There is no doubt that most of us have either been or know someone who has been a victim of crime. The importance of CCTV cameras in solving complex criminal investigations cannot be overemphasised. CCTV cameras proved to be a useful tool during the July 2005 London and more recent Mumbai terrorist attacks investigations. While Lagos has not been under any form of terrorist threat, CCTV cameras will not doubt prove useful in tracking down criminal elements within our society. Having said all that, this project might end up to be a waste of time and hard earned resources considering the current state of the Nigeria Police Force.

What is point of having a multi-million naira ‘state-of-the-art’ crime monitoring systems but an inept and dysfunctional law enforcement agency? Unfortunately, the Nigeria Police Force has suffered years of neglect and currently lacks the skills and expertise to combat modern day crime. I don’t even think the organisation has a Forensic department. In modern day crime investigation, the matching of DNA has provided clues to solving complex crime. How many forensic science experts do we have in the NPF? More so, it has become quite embarrassing in recent times when crime investigators have had to be flown in from overseas to help the Nigerian police. The unsolved murder investigations of the Late Chief Bola Ige and Funsho Williams are typical examples. A network of CCTV cameras is only one part of the equation in modern day criminal investigation. While it might give you a lead, you still need an efficient and capable police organisation to undertake further investigation.

I appreciate the fact that the state of the Nigerian Police is not the fault of the Governor and that he has no control on the structure of the Police Force, what it does or how it functions. Therefore without such control, the Governor faces a huge challenge in galvanising all the law enforcement agencies together – which is the only the proposed security monitoring and control centre can function effectively. This leads to the second issue about the current structure of the NPF itself.

I fully support those who have been clamouring for the creation of State Police in the spirit of true Federalism, and not for self interest. In parts of the world where true Federalism is actually been practised, the States are total in control of their ‘destiny’. Each state of the federation is allowed to have its own Police Force. A Federal Police is however responsible for serious crime such as drug trafficking, fraud, terrorism and so on. Until such framework is put in place and enshrined in our constitution, projects such as this will either not see the light of the day or stand the test of time. It will either be jettisoned by lack of support from the Federal Government or not be effective.

It might be worthwhile for our legislators to use the proposed review of nation’s constitution as an opportunity to clamour for true Federalism, instead than jostling for state creation – which to me in reality means additional bite of the ‘national cake’. There is no sense having a Governor as the ‘Chief Security Officer’ of his state but the State Police Commissioner takes orders from the Inspector-General, who reports directly to the President. We have seen cases in the last political dispensation were the Police have been used to intimidate State Governors, when they ran into problems with their Godfathers in Aso Rock under the guise of ‘anti-corruption’ crusade.

It might better if the money raised from the private sector for this project is used towards creation of a traffic control centre, which can then gradually be transformed into a joint traffic and security control centre. As both require similar technology, I believe this will serve more useful purpose in the interim until the NPF sorts out its acts.

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Going back to President Yar’Adua’s comments, I think the influence of Nigeria as a nation in the global community is often exaggerated.  Nigerian leaders can sometimes be described to be suffering from illusion in this context. With the current state of the economy and meagre infrastructure, it is preposterous for anyone to think we should be in the G20 - albeit our population and vast natural resources.

Yes, we have a population of 140 million. Yes, the G20 makes up two-thirds of world’s population. But the question is, of what importance is a country of 150 million, but with 50% unemployment? In fact we don’t even have accurate data on the number of unemployed in the country. Our leaders can only quote figures from UN, World Bank, IMF etc.

Do we have the potentials? Yes we do. We’ve always had the potentials since the word ‘go’ but have failed to deliver. We have failed to deliver in all aspects of our economy and society. As they say, Nigeria is the only place where nothing works! For how long would we continue to live on potentials?

On the BBC programme Hardtalk, Ex- President Obasanjo was asked ‘why more than 70% live in abject poverty, despite been a rich nation with abundant resources?’ The former President was quick to say Nigeria is only ‘potentially rich’ but not ‘rich’.  He went on to say, “considering its population it has made the best use of its opportunities”. So in summary, President Obasanjo admitted that the nation’s population has been its Achilles heel, when compared to other oil-rich nations such as Saudi Arabia, Kuwait etc. For me this is an admission from a former President that Nigeria is ‘failed state’. When countries like India and China are taking advantage of their human capacity to position themselves in the current global economy, we are still in the wilderness waiting for the Moses that will take us into the promise land. 

How can we describe a nation producing over 2.5 million barrels of oil per day but can only generate 600MW? How can we describe a nation of rent-collectors, that his 95% dependent on proceeds of oil?  How can describe a nation of 150 million without a mass public transport system? How can you describe a nation with four refineries but imports 85% of its petroleum products? How can we describe a nation where the educational institutions are closed for almost six months in year due to strike actions? How can you describe a nation, where politicians and civil servants loot the treasury with impunity? How can you describe a nation where the President does not have any faith in its health system, and has to travel overseas for medical check-up? How can you describe a nation where 70% have no access to pipe-borne water?

It is only in Nigeria that people have three generators in one house. It is only in Nigeria that you can loot the treasury and obtain court injunction to stop been probed. It is only in Nigeria where one individual dictates the retail price of diesel. It is only Nigeria where an Attorney-General can write a letter of support for corrupt politician in the name of ‘rule of law’. It is only in Nigeria, that you can award $8.5bn rail modernisation project without regard for ‘competitive tendering’. It is only in Nigeria that it takes 2 years to seek redress at the courts following a fraudulent electoral process. It is only in Nigeria that thieves and rogues are given national honours.

I’m sure the G20 is not interested in failed economies or failed governments. The nation has been experiencing continuous infrastructure decay post-independence. We are still living on infrastructure built by our former colonial masters. I sometimes wonder, what our nation would have been if we didn’t have colonial rule.

The curriculum of our educational system is archaic and at odds with modern trends. University and secondary school libraries are full of outdated books, most of which have passed their ‘sell by’ date. None of the nation’s universities is ranked among top 1000 in the world. We have failed to develop our human capacity in any shape or form. The vision of our leaders is bereft of any rational thinking and defies all logic.

Perhaps, if the G20 was about the 20 most corrupt or rogue nations, probably Nigeria would have been the host and voted as the life President.

I want to hope that the Nigeria’s exclusion from the G20 will sound as a warning signal to President Yar’Adua. He needs to start acting decisively on key challenges facing the nation. The public mood is not very encouraging. It is almost two and half years since his assumption of office. Nigerians are sick and tired of all the rhetoric about seven-point agenda, rule of law etc. The nation needs an ‘action leader’ and not a ‘servant-leader’.

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The article by Rueben Abati says it all.
We sometimes over-estimate our importance as a nation on the global scene. Like Dr Abati, it's not just about population. Let's even accept that membership of G20 is based on population size, of what use is a country with 140 million but with 80% umemployment. Perhaps, if it was a meeting of the 20 world leading corrupt nations, then Nigeria will probably be the Chairman and host nation.


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i don't understand the craze about 'concessioning' within the govt (state and federal).
We need to see the details of these contracts. They govt shouldn't just be selling our souls away to the private sector.
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The current review of the Railways Act aimed at encouraging private sector participation in the nation’s rail system is unlikely to achieve much in terms of private investment. The proposals contained in the bill are totally at odds with the original intent of the Bureau of Public Enterprise (BPE) to remove the ‘inherent conflict of interest’ in the current Railways Act 1955 - which vests regulation and provision of rail services solely on Nigeria Railway Corporation. As part of the privatization programme started by the Obasanjo regime, BPE did propose to separate the railway function into three separate entities, National Rail Development Authority; Rail Regulator, and Concessionaire (operations).

However, except for the amendment to the legislation with regards to, granting of track access to private operators through concessions, everything else in the proposed bill promotes the ‘status quo’. Although NRC will not continue to remain a monopoly service provider, it will still be solely responsible for rail development and regulation.

Under the proposed legislation, NRC will be the rail regulator, a service operator, grant concessions to private companies, retain ownership of the rail infrastructure and also be responsible for strategic rail development. This arrangement known as ‘vertical integration concession’ model, creates a conflict of interest and unlikely to yield any positive result.

What makes anyone think the NRC can perform these functions effectively considering its current deficiency in skills and history of mismanagement? How can the same organisation responsible for providing services regulate itself? Let’s assume the proposed change to the legislation achieves its objective and we have private operators competing with NRC. Are you telling me that NRC will certify its locomotives to be unsafe but certify that of its competitor to be safe? What skills does the NRC have in strategic railway planning? I think Honourable members of the Senate need to be educated in the difference between rail engineering and rail planning. You need to have identified the need for a rail line through rigorous planning techniques (demand forecasting, patronage modelling, origin/destination analysis, cost benefit analysis) before you start the ‘engineering’.

In Australia, the Queensland railway network is also managed through a ‘vertical integration concession model. Queensland Rail (govt-owned agency, similar to NRC) is responsible for the operation of services and ownership/maintenance of tracks. However, the regulation of rail services in terms of fares/subsidy and safety is undertaken by the State Government through the Department of Transport. The Dept of Transport is also responsible for all aspects of rail planning, and preservation of future rail corridors.

The Australian model is slightly different because the provision of passenger services is regulated by the state government. Whereas, passenger service operations is proposed to be deregulated in Nigeria. The Nigeria government will however need to subsidise these services because, if the actual cost is charged by the concessionaire it will be unbearable for commuters.

In the Nigerian context, there are two options available under the ‘vertical integration model’. The first option is, NRC to retain ownership of rail tracks, maintain rail tracks and set up delivery mechanism for new rail lines. Private companies to be responsible for provision rail services. Under this option, NRC will not be involved in operation of rail services. The Ministry of Transport will be responsible for negotiating rail concession contracts, and payment of subsidies to private rail operators.

The second option is, NRC continues to operate rail services but will have to compete with other private sector operators. It will also retain ownership of all tracks and maintain tracks on which it runs its services. Private sector operators will also be responsible for maintaining tracks in their concession areas. The govt through the Ministry of Transport will still be responsible for negotiating concession contracts/subsidies.

Under the two scenarios, the strategic long term planning for railways should either by undertaken the Ministry of Transport or a Strategic Rail Authority, but not NRC. The safety regulation of railways should also be undertaken by the MoT. NRC cannot be the safety regulator due to its interest in the ownership and maintenance of tracks. To have NRC undertake inspection or issue licence for rail inspectors on the rail track it owns will be a serious conflict of interest.

I’m sceptical about the intent of the proposed changes to Railways Act. It wouldn’t surprise me that the cabals that have profited from the inefficiencies and failure of the rail system are still at work. I also don’t think the Senate President was telling us anything new when you said “there are all sorts of interest groups that have now found themselves in the railway system. People who did not want the railway to work because they are benefitting from the failure of the railway at the moment”.

In actual fact, we can say the same about all sectors of our economy. As I wrote in my last piece, we are now a nation of Oligarchs. You will agree with me that, there are few individuals in Nigeria who have made colossal amount of money from the inefficiencies of the government. Where should we start, is the failed railways, and road haulage cartel, or power generation and generator importers, or failed refineries and the petroleum products importers. The list is endless. And when government-owned corporations that are set up to provide such services are put up for sale, they are sold to these same individuals under the guise of ‘privatisation’. Unfortunately, this is the product of ‘government failure’. So tell me, who is winning?

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@Moneygurl,

The ideal thing will be for the alternative road to be in place before charging toll on the expressway. In fact, the private sector should have been encouraged to build the alternative (as a bypass) and charge for its usage. Since the existing road is congested, anyone trying to save time will use the alternative and pay accordingly.

The nation’s former economic managers have seized the opportunity of the current economic downturn to highlight their achievements, which sometimes implies that we could have been in a worse situation.  I refer to the recent comments attributed to the Former Finance Minister Mrs Ngozi Okonjo-Iweala on the global financial crisis.

The former Minister was quoted in the media saying, the debt relief granted under the Obasanjo regime is one of the most critical things that is currently helping Nigeria’s economy in the current economic climate. She also noted that the debt relief has lifted a burden from the neck of Nigerians. I agree that the debt repayment has helped improve our foreign reserve, and credit-rating, which has consequently opened to doors for some form of foreign investment. I however find it hard to believe that it has made any iota of difference to the life of ordinary masses. We should probably be asking if the economy has ever been better in the 20 years.

I do have great respect and admiration for Mrs Okonjo-Iweala. As we may recall Mrs Okonjo-Iweala was the ‘architect’ of the President Obasanjo economic reforms. ‘Due process’ was the flavour of the day during her tenure as Finance Minister. Recent probe of the energy sector however indicates that, adherence to the principle of ‘due process’ by the Obasanjo administration is still very much questionable. She masterminded the repayment of the nation’s debt owed to the Paris Club of Nations.This consequently brought down Nigeria’s total foreign debt from $35 billion to $5 billion.

There are no economic indices to suggest that an average Nigerian is in anyway better off than he was during the pre-debt relief period. The money could have been spent in developing the nation’s infrastructure. In fact there were rumours that appointment of Mrs Okonjo-Iweala was a conspiracy between the World Bank and nation’s creditors to facilitate the debt repayments Is there anything fundamentally wrong with being in debt? It is common knowledge that successful businesses thrive on availability of credit.

The wealth of a nation can only be measured by the quality of life of its citizens and not by how much it owes or does not owe in debts. And the ‘quality of life’ can only be improved through sustained infrastructure development. The US is a good example. Also, the ability to manage and service debts is the most important thing and not the debt itself. We should remember that Nigeria’s debt ballooned to $35 billion as a result of default payments and penalty charges. We did actually stop borrowing from the Paris Club since 1992.

This implies that if we have been able to service our debts regularly, we wouldn’t owe as much in the first place. Therefore, if the $12 billion paid to the Paris Club was invested in the nation’s infrastructure, it might have helped put our feet on the path of economy recovery, and thus make it less onerous to service the debt. Let’s not be deceived, the fact that a nation is debt free, does not make it anymore developed.

Good leadership, political stability, sound economic polices, with underlining infrastructure growth are the key to long term sustainable development. These key principles are however lacking in Nigeria. Our leaders have either forced themselves into power through military coups or fraudulent electoral processes. Our economy has been tarnished by years of political instability and institutionalised corruption. We run a non-diversified economy that is 90% dependent on crude oil. The recent announcement by the Nigeria National Petroleum Corporation (NNPC) that oil revenue has fallen from an average of N330 billion ($2.2 billion) recorded in 2008 to an average of N150 billion about ($1 billion) in January 2009, is therefore a major concern.

The government has not been able to develop any sound economic policy. They make rash economic decisions that are devoid of any rational thinking. When faced with challenges, the government prefers to bury its head in the sand, and pretend its all business as usual.

Unfortunately, we are now drifting into a nation of Oligarchs. The economy of the nation is now concentrated in the hands of very few individuals, who have profited immensely from the inefficiencies of the government. They have amassed so much wealth through investments in services that should ordinarily be provided by the state.

This situation only reminds me of the Russian experience following the collapse of the Soviet Union.

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While it is agreed that govt cannot be provider of everything, it is not right to toll a road in an area without an alternative.
This defies all logic of transport planning/traffic engineering, and perhaps raises serious equity issues. It is never done in any part of the world.
Lekki Expressway is not Third Mainland bridge! The govt may decide it wants to widen the Third Mainland  and have it tolled, that is fine. Because the Third Mainland bridge is not the only link bridge connecting the Island with the Mainland.
I want to believe that there is serious foul play in this contract. It is arguably the most dodgy PPP has come across in my professional life. Unfortunately, banks will be lining up to offer Lekki Concesson Company loans, because it is basically a 'monopoly' service provider.

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The Lagos state government awarded a contract for rehabilitation and upgrade of approximately 50km Lekki-Epe Expressway to Lekki Concession Company Limited (LCC). The project, which will be executed under as Public-Private Partnership (PPP), also grants LCC a 30-year concession. LCC will build the infrastructure, operate it for 30 years and later transfer it to the Lagos state government. This model in PPP lingua is known as Build, Operate and Transfer (BOT). Like most PPP, this project is being funded through private finance, which means LCC will be charging tolls on the road in order to recover its costs and make a decent profit.

It was however reported last week that communities bordering the stretch of Lekki-Epe Expressway in the Eti-Osa council area that is to be subjected to tolls rose up in arms against the plan, protesting what they deem to be unfair financial burden on the residents. The issue according to the representatives of the groups is that two of the three proposed toll gates would be located in Eti-Osa, thereby subjecting residents in the area to payment of tolls each time they needed to leave their homes.

The toll road sector is evolving rapidly and has become increasingly global, as entities with the expertise to build, operate, maintain, and finance these facilities have lent their services across international boundaries. LCC for example is a ‘special purpose vehicle’ set up by a group of Nigerian and South African companies. Proponents of toll roads believe that the private sector can bring a level of competition and efficiency that can benefit road project development and operations.

Toll road financing, construction, revenue generation, and operation can be undertaken through several organisational structures and frameworks. Revenues can be generated through traditional ‘direct user’ charges, in which motorists using the facility pay a toll, or through third-party payments. Third-party payments are typically from a public sector sponsor to a private sector concessionaire, either in the form of shadow toll payments based on facility usage or availability payments based on the concessionaire's ability to meet certain performance benchmarks. With regards to the Lekki-Epe project traditional ‘direct user’ charging regime will be employed. Under this system, a vehicle makes a payment via cash or an electronic method for the use of the road facility.

On face value, the Lekki-Epe project PPP delivery mechanism seems laudable, as it has facilitated the delivery of a key transport infrastructure. But from a technical perspective, I find it hard to understand the rationale behind PPP arrangements and hence share local residents’ concern.

It is inevitable that these tolls will have a huge impact on local road users. Experience as shown that private toll operators have had greater success at regularly imposing toll rate hikes in order to maximize their profit. The management of toll operating companies are also less concerned about the political or social implications of such price hikes. When concessions are initially granted, toll rates tend to be lower than revenue maximisation levels. Nevertheless, once under concessionaire control, toll rates will likely increase to maximum economic or legal revenue levels.

Tolling of Lekki-Epe expressway is not anyway appropriate. Why will the Lagos state government enter into a PPP contract that will allow tolling on a strategic road, in an area without an alternative road access or decent public transport system?  It’s been reported that three tolling booths are proposed on the road corridor at Maroko, Sangotedo and Epe. If that’s case, the question needs to be asked about the concessionaire tolling strategy. Is the toll being targeted towards local traffic or long distance travellers? Why should a local resident making a short trip between Sangotedo and Ajah be subjected to a toll, in the absence of an alternative road access?  Compelling local residents to payment of roads in the absence of an alternative raises serious equity issues. This makes the concessionaire (LCC) a monopoly service provider, and therefore will create a serious distortion in the market.

As we all know, the Lekki-Epe corridor is one of the fastest growing corridors in terms of urbanisation. The road is only link between towns along the Lekki axis and Victoria Island. The govt has allowed intensification of development along this corridor to perpetuate over the years without a long term strategy of how it will provide key infrastructure.  Instead of the government to grapple with this issue, it has decided to hand it over to the private sector. The toll will have a massive impact on local residents, some of whom are currently struggling with everyday life. The lack of alternative road access can only result in the concessionaire making a ‘killing’ out of this project in terms of financial returns. It would have been more appropriate if the private sector is encouraged to finance the construction of a ‘bypass’, which can then be tolled accordingly. Road users who value their time and do not want to be stuck in traffic will use the bypass but at a premium.

However, if the government feels a desperate need for a PPP, a better approach could have been through ‘shadow tolls’. Whereby a private contractor receives payments over time for the successful construction and operation of the facility from a public sponsor, and the user is not responsible for a payment. The amount of such payment will be a function of a theoretical toll rate per vehicle with revenue minimums and maximums. This funding method is appropriate in this situation where there is, lack of alternative free roads, and likely community backlash, which could arise with direct user charging.

Whilst I agree that Lekki-Epe Expressway is a critical transport infrastructure that is in dire need of rehabilitation and upgrade, I do not agree that the way and manner the contract has been executed is appropriate. For me, it is one of two things. It’s either there’s been ‘foul’ play in the award of contract or an error of judgment on the part of Lagos State Government. I however want to believe it is the latter rather than the former.

Whatever be the reason, it is high-time some of the PPP contracts signed by the government (either Federal or State) come under scrutiny. PPP should be aimed at delivering ‘value for money’. Prior to entering into PPP contracts, the government should endeavour to assess infrastructure projects against a ‘public sector comparator’, as part of project appraisal. This should determine if the most cost-effective way of delivery is through a PPP. It is likely that sometimes, that certain projects could be delivered cheaper by the public sector.

It is unfortunate that in a country of 150 million where more than 70% are living in abject poverty, ministers of God can afford to buying private jets. A World Bank report recently put the number of unemployed in Nigeria at 40 million (which represents about 25% of the country’s population). To put things in perspective, 40 million is approximately 60% of the population of Great Britain and one and a half times the population of Australia!

I don’t need to be educating you on how many church leaders in the country do have a jet, but in any case, why does a minister of God need a private jet? There are lots of arguments banded around justifying the need for a private jet. I listened to someone say “Pastor Adeboye needs it for evangelism and he so deserves it because he has paid his dues”. What dues To my Christian friends, can there be anymore sacrifice than giving up your life for the love of the world (John 3:16).  For sake of clarity, I’m not in anyway attacking Pastor Adeboye personally, because the Bible itself says ‘thou shall not judge’. My issue however, is with the system that has allowed all this display of excessive affluence to perpetuate in Nigerian churches in the face growing poverty. The system has failed innocent men and women who see the ‘church’ as the only place of hope having been let down by their leaders.

And when I say ‘failure’, I’m referring to the lack of appropriate regulation and oversight on the financial practices in churches across the country. It is common knowledge that churches have now become big ‘enterprise’. The financial turnover of some of these churches are phenomenal to say the least and sometime larger than companies quoted on the stock exchange. The voluntary work put in by members on a weekly basis to keep the functioning if expressed in man hours and costed accordingly, is mind blowing.  It is fair to say that church leaders and directors of public liability companies enjoy almost same benefits and perks. However the fundamental differences are displayed in areas of regulation and accountability.

Companies are subject to series of finance and tax regulation and their directors are accountable to their shareholders. They can be liable for huge fines if their tax files are not up to date and shareholders can demand for resignation of company executives if they are non performing. However on the other hand, most Nigerian church leaders are not accountable to anyone apart from God (if they choose to), and no financial regulator is interested in their books.

In my opinion, I think it is time that closer attention is paid to the financial activities of Nigerian churches. In the western world churches as classified as ‘charity organisations’, and thus, there are exempt from taxation. However, the churches are still expected to file their accounts with the regulator at the end of every financial year. Churches are expected to have a Board of Trustee, who will be responsible for decision making and appointment of Pastors. Pastors are expected to be an annual salary and are treated as staff. These rules are very strict. I know the case of a Nigerian Pastor (names withheld) who was almost jailed for financial irregularities by the UK Charities Commission. He is the Pastor of the largest black church in Europe and since his ordeal; he now seems to be operating from Nigeria.

So what am I saying? I’m not suggesting a ‘socialist’ agenda of cut throat taxation or regulation; either I am suggesting that the EFCC should start chasing Pastors. But I still do feel that the excessive greed of some of these church leaders needs to be put under the spotlight. Unfortunately, most Nigerian churches are operated like a ‘one man business’ or perhaps ‘sole trader’. The founder or General Overseer is the alpha and omega. Members of the church executives/committee who don’t fall in line with the principles (whether good or bad) of the General Overseer are ostracised. There are no policies or systems in place to monitor their activities, therefore giving them absolute control.

Nigerian churches are owners of some of the country’s most expensive schools and universities. Some churches are big real estate investors, selling land to church members within the church premises. We therefore need to ask ourselves, what is the salary of these so called pastors? What proportion of the church income is used for charitable course? Who is creaming the profits made from their ‘extra-curricular’ activities? Who are their trustees? Are these trustees independent or collaborators? Who audits the church accounts?

The fact that God has called you into ministry does give any Pastor right to run a church like a personal business. And until the system addresses some of the fundamental issues noted, I’m afraid there will be more private jets to come. But lets remember that for every Daddy G.O that has bought one private jet, there are millions of aspiring Daddy G.Os looking to buy four.

For the likes of Pastor Adeboye and Co, I can only wish you all the best. Make the most of your flying trips and don’t forget that there are lost souls in Bahamas, Bermuda and Hawaii waiting to be saved. I pray that your jet will never run out of fuel (climate change permitting).

Amen!

saxywale:
I am just seeing this topic for the first time. I can only wonder why the contract was given to a canadian firm that does not even have any experience of railway engineering and transport planning. The company is not known for handling project of such magnitude especially when a bridge is going to pass over the osa sea. I wonder why coy like jacobs, Arups, Aescom e.t.c weren't given the whole project to handle.I hope politics was not played in winning the contract of the project
Olumide, Transport Engineer/planner,
Manchester,
Uk

You are right, the Canadian firm does not have same track record as the companies you mention. However the truth is that none of these companies are interested doing business directly with govts in nigeria because of corruption etc. They are only interested in foreign agency sponsored projects (World bank, DFID etc). And this is from a personal experience.

A ‘cash cow’ is a product or a business unit that generates unusually high profit margins: so high that it is responsible for a large amount of a company's operating profit. This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes.
Risks of a ‘cash cow’ include complacency, with management ignoring the need for change as market forces erode value; and ongoing turf wars between the management in charge of the ‘cash cow’ and other managers trying to garner support for other products.

The above definitions succinctly describe the economic situation in Nigeria with particular regards to crude oil, which has become the nation’s ‘cash cow’ over the last few decades.
It is common knowledge that Nigeria has earned phenomenal revenue from crude oil sales, which culminated in the creation of the Excess Crude Account by the Obasanjo administration in 2004. Funds were drawn from the Excess Crude Account in the past to pay for special projects and debt servicing. During Obasanjo’s administration, about $12.4bn was withdrawn from the account to offset Nigeria’s debt to the Paris Club; $17milllion for two additional days for the 2006 National Population Census; and more than $2.3billion for Niger Delta Power Plants. Whilst it’s not the reason for my comments, it is worth noting that the so-called ‘Power Projects’ is still a dog’s breakfast!

It is not surprising that Nigeria has now become so complacent, even though market forces (ie the current global economic downturn) has eroded the value of crude oil from its peak of $147 to $40 per barrel. Whilst other countries (United Arab Emirates as an example) has looking at ways of generating revenue and reduce their dependence on crude oil, economic managers in Nigeria cannot see beyond their nose. Dubai is arguably the current largest construction site in the world, with the Monarch working extremely hard to turn the City into one of the world’s favourite tourist destination. The decision to diversify was based on the advice received on the depletion of its oil reserves and hence, the need to explore alternative ways of raising revenues. Dubai is now famous for its shopping malls and upmarket fashion label shops.

A report recently released on world commodities, did show that over the last decade, Cocoa has remained the most stable commodity. In fact, the price of Cocoa is trading at its highest for 37 years. I remember vividly been taught about ‘cash crops’ (Cocoa, Rubber etc) during my primary education. I don’t think at that point I knew the meaning of ‘crude oil’. The infrastructure built in the Old Western Region by the Late Obafemi Awolowo was mainly financed through Cocoa export. Instead of our leaders think outside the box, and use the current global economic crisis to retrace their steps, they are still busy speculating on future oil prices.

The 2009 budget is based on $45, which is higher than the current oil trading price. Which means the 2009 budget might be in deficit from the word ‘go’. Members of the Senate Committee on Budget Appropriation jumped for joy last week when oil price rose from $40 - $48 as a result of the Israeli-Palestinian crisis. The Senate Committee Chairman was quoted as saying the “benchmark for the 2009 budget should be been raised higher, and he went as far as speculating that oil will be trading at $50 and rise to $100 within the next two months”. When did honourable  members of the Senate become ‘oil trading experts’?
Governance in the states of the federation (probably with the exception of Lagos) goes to sleep for 29 days everyone month, only for State executives to turn up in Abuja at the end of the month to collect their share of nation ‘booty’ from the Excess Crude Account.

It is my understanding that the Federal, State and Local Government shared N106billion in December alone from the account. The highest recipients were the oil-producing states, River (N15.5billion) Akwa Ibom (N4.5billion), Delta (N3billion), Bayelsa (N1.8billion). What has been the development in these states over the last eight years apart from allegation and counter allegation of corruption and fraud. It will be interesting to see how the states’ budget stacks up against the guaranteed monthly return from the Excess Crude Account. I’m sure their budget is 100% based on future oil revenue allocation. When a State receives N15.5billion monthly, why will the Governor be interested in ‘internal generated revenue’?
Anyway, as the Yoruba says ‘igba kan ko ni lo bi orere’ meaning ‘nothing last forever’, except for the Grace of the Almighty God. However in the meantime, it is business as usual – we keep milking the ‘cash cow’.

bronx_dog:
You have made so many assumptions and so many mis judgements, i am not sure you know much about what you wrote about.

I'm not sure about what you mean. Which areas do you think I've made wrong assumptions/judgement. I stand to be corrected.

The Federal Government recently suspended the proposed $8.3 billion Lagos to Kano railway modernisation project awarded to the China Civil Engineering Construction Corporation (CCECC) by the administration of former President Olusegun Obasanjo. This decision – one of many ‘reversals’ of Yar’Adua government – is seen as regrettable by the punter, however it might be a blessing in disguise as it offers an opportunity for a rethink. I’m however not under any illusion about why the project was cancelled.

Mr. Tanimu Yakubu, chief economic adviser to President Umaru Yar'Adua, told the committee probing the $8.3 billion proposed Lagos-Kano standard gauge rail line that the Chinese firm was in contravention of Section 54 of the Companies and Allied Matters Act (Cama), which prohibits foreign companies from doing business in the country without being legally registered in Nigeria. He said the President Yar'Adua-led administration considers the contract to be illegal because it was not presented to the National Assembly for ratification. While the official status of the project is yet to be disclosed, the status of the contract however needs to be clarified because the body language of Yakubu indicates that the contract is as good as dead.

My concern with the project has nothing to do with budget appropriation or registration of CCECC with the Corporate Affairs Commission (CAC). I consider the basis, need and justification for such a huge financial investment in upgrading a rail line between Lagos-Kano to be fundamentally flawed for various reasons.

Firstly, why do we have to procure rail engineering expertise from China? There is a fundamental difference between ‘human resources’ and ‘human capacity’. With its population size, there is no doubt in my mind that the Chinese have the resources to undertake any project (as seen in recently concluded Olympics). However, I’m not convinced that they have the capacity (in terms of skills) to design a ‘world class’ rail system. When you mention rail projects, we are not just talking about construction workers, but technical expertise in terms of planning, design and engineering. It is worth noting that the planning, design and engineering expertise for the recently constructed Beijing-Tianjing Intercity Rail was sourced from mainland Europe. Only contracts for civil construction and engineering supervision were limited to local Chinese firms. That says a lot about how much faith the Chinese have in their own expertise. I don’t Nigerians are interested in ‘Made in China’ railways, or train parts from ‘Chinatown’.

Secondly, why spend such a huge amount of money on upgrading an existing rail line – converting narrow gauge track to standard gauge?

The Lagos-Kano rail line stretches to 11,315 kilometres and would run on double track. The speed limit will be pegged at 150 kilometres per hour. After the upgrade, it would take less than four hours to travel from Lagos to Kano. The project will also include construction of 39 stations and two workshops and would be run through independent power supply system. The Chinese also offered a five-year maintenance period. The entire project would cost $8.3 billion. Even though the Federal Government only paid the Chinese company a paltry sum of $250 million being three per cent of the entire total cost, instead of $1.356 billion, being the 10 per cent mobilisation fee promised, the company immediately moved to site, armed with the due process certificate for the payment made.

While this might look good on paper, the question needs to be asked about how many people will be travelling daily between Lagos-Kano to justify this investment. With a travel time of four hours, are constructing a commuter or tourist rail network? For me, the rail line will only b useful for long distance travel. This in itself raises more questions than answers. How many people travel daily on this route? How many times a day is it expected to operate? Has there been any cost-benefit analysis undertaken for the project? I’m sure that if a cost-benefit analysis is undertaken, the numbers will definitely not stack up. Does the time savings to be achieved by converting narrow gauge to standard gauge worth $8.3 billion dollars in real terms?
While I’m not totally against upgrading Nigerian railway infrastructure, I’m of the opinion that $8 billion earmarked for this project can be better spent. For starters, let me point out that there is nothing wrong with ‘narrow gauge’ rail tracks. While standard gauge is modern and used in most parts of the world, there are still many developed nations with narrow gauge rail tracks. While it might be better to build new rail tracks as standard gauge, the conversion cost is too expensive for most countries, hence the reason why it is still widely in use.

The Federal Ministry of Transport should be setting a strategic policy for rail development in the country, starting with a cleansing of the Nigerian Railway Corporation. Railway transport in Nigeria is inefficient and has hardly developed at all over the past 100 years compared to railways in the developed world. This is due both to maladministration by successive governments and to the lack of a functional transport policy ensuring a constant pattern of railway development.

In developed countries, transport policy is dynamic and changes responsively accordingly to technological trends in the transport sector. Efforts should be focussed on developing rail network in sub-regional areas. There is likely to be more patronage demand along Lagos-Ogun-Oyo, PH-Warri-Enugu and Minna-Kaduna-Abuja corridors. The Lagos Rail Mass Transit project should be supported by the FG with funds and be extended to Ogun State as part of the Lagos Mega City Project. The transport infrastructure in our major cities should be fixed as a matter of priority.

Even if the FG decides to go ahead with the project as it is, who will be responsible for operation and maintenance? Is it the ‘paralysed’ Nigerian Railway Corporation? Only God knows what goes on in the NRC nowadays. The organisation has proven beyond every reasonable doubt that it is incompetent to move the nation rail system to the next level.

Until the government comes out in the open to tell us its official position on the project, we can only keep asking ourselves, where to from here…, ?

Seyi Osiyemi is a Transportation Planner and lives in Brisbane, Australia

oluseyiosiyemi@hotmail.com[i][/i]

Lagos Rail Mass Transit Project

Lagos with an estimated population of 17million or 9million (whichever you believe!) is one of the so-called ‘megacities’ without a mass transit system. The population of state has grown significantly over the last few decades mainly due to urban migration. The high concentration of manufacturing, commercial and financial industries has continued to fuel the growth and traffic congestion in the city

The Lagos Metropolitan Area Transport Authority as part of its effort to tackle congestion recently developed a Rail Master Plan, which proposes an extensive network of rail lines connecting most parts of Lagos metropolitan area. The urban rail system is proposed to be implemented through a Public Private Partnership scheme (PPP). 

It is heartening to see for the first time – since the civilian administration of Alhaji Lateef Kayode Jakande – to see a State Administrator with a vision of how to deal with the menace of traffic congestion in Lagos State. Much commendation should also be given to the Ex-Governor Asiwaju Bola Tinubu for setting up the necessary institutional framework that is currently driving the state's transport agenda.

Whilst I fully support the principle of delivering of transport infrastructure through Public –Private Partnerships, however if not properly negotiated it can leave the government out of pocket.and not serve any public good.

PPP describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. PPP has been used as a mechanism to deliver major transport infrastructure (toll roads, light rail etc) in most parts of the western world. It is based on the principle of transferring investment risk to the private sector, and also on the notion that delivery and operation of infrastructure and services can be undertaken 'cheaper and smarter' by the private sector, thus providing cost savings to the Government coffers. However, this is not always the case, as there are examples of 'how not to undertake a PPP'.

With specific regards to the Lagos rail project, the private sector is expected to Design and Build the infrastructure which will be financed by the State government. The operation of the system is also expected to undertaken by the private sector (under a 25 year concession). In return, the private sector operator will be expected to provide rolling stock, maintenance depot, and control systems.

One major concern with the Lagos Rail Mass Transit PPP is the liberty that will be given to the private sector operator to set fares and collect revenue. If the private operator is given absolute control over pricing, this could impact on passengers negatively and consequently affect patronage. It is plausible to assume that the private sector will be keen to recover its operating cost, repay bank loans and also make a return on their investment. It is common knowledge that construction of rail system is an expensive expenditure and the maintenance cost (rolling stock, staff, etc) can be significant. This is the fundamental difference between investment in road and rail infrastructure. If the private sector operator is allowed to charge passengers the real cost of operating the service plus their profit margin, it is very likely that the fares will be set at a cost that will be prohibitive to commuters. This begs the question of - ' who will use the service'. I'm sure it's not the government's agenda to provide high-quality public transport system only for the 'middle class'.
There is no where in the world where passenger rail service operates at a profit – that is cover its real cost. Even in a densely populated city like Hong Kong with a populaton of 7 million and an efficient mass rapid transit system - which carries about 3 million passengers a day. The Hong Kong transport authority makes more money from leasing air rights over train station than it collects from the fare box. Also as an example, the cost recovery on public transport in the state of Queensland, Australia is just 30%.

Public transport is a social utility that is needed to provide access to services, jobs etc and help encourage social inclusion. There are social equity issues that need to be considered in planning of transport systems. Provision of public transport cannot be allowed to operate in a totally deregulated environment. This is the reason why Government around the world subsidize public transport provision. While one could argue that public transport subsidy defeats the purpose of a PPP, I tend to believe that it is in the best interest of the Government to subsidise the rail service when it becomes operational. The subsidies should however be linked to service level agreement and minimum service standards that will be expected from the operator.

On the other hand, if the fare levels are set too low (without any Govt top-up), the operator will be running the services at a loss. This could result in the private operator going into administration. If this happens, Govt will either have to 'bail-out' the company or take over the operation of the service. This could come at a significant cost to the State. 

The delivery and operation of the proposed urban rail network can result in a situation, where different companies will be operating rail services on different parts of the network (that is, Blue Line – operator A, Red Line – operator B). This then brings me to the second issue of 'integrated ticketing' across the rail network. I will note that this also has an implication of fare pricing. The principle of having an integrated ticketing system is great, as this provides seamless travel journey. In fact, the integration should not be limited to rail; LAMATA should be looking at integrating the BRT Lite service as well. Having said that, giving operators total control on fare pricing and expecting integrated service across the network flies in the face of reality, and can result in price fixing by train operating companies.  For passengers to enjoy the benefit of having an integrated ticketing system, LAMATA will need to have some control pricing structure.

Lastly, the issue of track maintenance seems unclear from the project briefing documents. Considering that part of the new rail line will be utilising the existing Nigeria Railways Corporation rail corridor, then one will assume that the NRC will be responsible for maintaining its own tracks. However, will the private operator be responsible for maintaining the new tracks or will it be the Govt through NRC?

Anyway, I believe the authorities involved in the negotiation of PPP contract will be brave enough to make sure that the Govt is getting 'value for money' from the PPP. Also, the social, economic, and safety interest of commuters should be central to the contract negotiations.

Seyi Osiyemi is a Transportation Planner and lives in Brisbane, Australia[b][/b]