Mixed reactions trail Nigerian Railway Corporation unbundling plans
By Abimbola Mohammed
A LinkedIn post on the unbundling of the Nigerian Railway Corporation (NRC) made by Gbemisola Ruqayyah Saraki, Minister of State, Federal Ministry of Transportation, has generated mixed reactions among Nigerian experts, particularly in the Diaspora.
In the post, Saraki said: “I have the privilege to have been assigned the chairmanship of the Ministerial Committee on the unbundling of the Nigerian Railway Corporation (NRC). The Terms of Reference of the Committee include looking at the unbundling of the NRC into 3 or 4 companies to handle different aspects – regulation, operations, management of infrastructure and marketing.”
While some of the experts in Diaspora opined that the unbundling would work if professionally handled, others argued that unbundling without a proper review of the processes may culminate in failure.
Olu Olokun, the Area Manager at London Underground Limited, during a phone conversation with MARKETING EDGE expressed the belief that if properly managed, unbundling NRC will work as that is also the system adopted by the British government and other countries.
His words: “The unbundling into Regulator, Operation and Asset infrastructure management looks good and very interesting as it sounds. The British Railway experience in the UK is a case study that should be visited and properly reviewed. It then provided network rail and station infrastructure while third party rail operators like Virgin trains, Southwest trains, Thames links provided train services and they also operate and collect fares from customers.”
Likening the move to what obtains in the power sector, Mr. Olokun, however, noted that the weakest link in the chain remains distribution which is owned fully by the government and with the generation companies that cannot sometimes fully evacuate what they produce.
“In the rail industry, the network of rail that will support all the operators or operations that will not see money directly from the customers except through sharing from operators and the government that will most likely own the sector must be made strong and viable – if not, it will be a house of cards.
“I wish the minister all the very best and hope politics is not allowed to play or derail the process,” he said.
Seyi Osiyemi, an urban mobility expert in policy and planning, presently a Director of Bus Operations in Dubai described it as, “Best news I have read this year. It’s better late than never”.
Likewise, Barau Sani, a Training Programme Coordinator at NITT Zaria also supported the idea from the point of capacity development and investment.
Oludayo Orolu, a Finance, Strategy and Business Development Executive supported the idea from the point of view of private sector participation and investment.
However, James Amattey, Marketing and Product Lead at Kidsreadart, Accra, Ghana, expressed doubt over the unbundling suggesting that weak links might exist in the value chain.
His words: “Sometimes, unbundling is not the best way to go; there are certain elements that work together for a good reason. For example, operation and infrastructure cannot work in silos due to high interrelationship between them. They rely on each other so much that it often creates a discrepancy when each has to operate independently.
“Unbundling without a proper review of the processes and sometimes people will just lead to congruent failure which was not handled before. Unbundling if necessary should be between two parts that are truly independent (operations and construction or regulations). Unfortunately, this is not too common as most of these things rely so much on each other that separating them is inconvenient.”
On her part, Patricia Idaewor (Ph.D.), a policy expert with the Department of Transport (DFT UK), looked at it from the point of view of vertical integration, saying, “it’s the way to go rather than unbundling”.
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