The Managing Director, Nigeria Railway Corporation, Fidet Okhiria, speaks on efforts being made by the Federal Government to secure trains nationwide, among other industry issues, in this interview with OKECHUKWU NNODIM
You recently said the hike in diesel price led to a reduction in the trips on the Lagos-Ibadan route. What is the update on that?
The incident of March 28, 2022 impacted not just on the Abuja-Kaduna route but on all our train services. Before, passengers had the confidence that a train ride was the safest, but when that incident happened, it was a big blow on the rail industry. It is now that people are trying to build back their confidence. So, the volume of passengers has reduced. And unfortunately, the war in Ukraine and other variables have made petroleum products’ prices to skyrocket astronomically. And being a service provider for the benefit of Nigeria, we cannot just wake up and increase fares. For even when you increase fares, you may price yourself out of competition. So, that is where we are. And in order to reduce losses, we had to check our operations and see how to maximise what we have without causing pain to Nigerians. So, we had to reduce the number of trips by half on both Lagos-Ibadan and Itakpe-Warri train services and that is what we are still doing.
This is because the revenue we earn cannot pay for the amount we spend on diesel presently. We are just trying to get support from other sources to be able to pay just for diesel, not to talk of payments for cleaning, security, among others. All those are also pending issues that will take a lot of money to maintain them. The Lagos-Ibadan trips were up to six in the past and, by now, we should be talking about 10 trips if not for the problems. But we operate four trips on that service now. On the Warri-Itakpe service, we are doing just two trips as against the four trips that we were doing before.
In terms of revenue, how has this affected the NRC?
It has seriously affected us. The Abuja-Kaduna was doing marvelously well. At a time we were hitting N450m monthly and by the time you remove all operational costs, you would still have something to pay to the government. But now we can hardly buy diesel to operate. In fact, the major headache now is the price of diesel. For instance, on the average, we use about 4,000 litres daily for the Lagos-Ibadan service and we barely earn up to N1.7m per day. Now, the supply cost for a litre of diesel is close to N1,000. At filling stations, you get it for about N700 to N800, but if you have a supplier, he will have to put his profit margin, VAT and others, and this brings the cost to about N1,000/litre. So, we are talking about spending almost N4m on diesel alone, when we barely make N1.7m. But we still have to provide the services on that route.
How do you then source funds to meet up?
In the 2022 budget, the government provided about N500m diesel, which barely lasts up to a month for the rail services across the country. We also source for funds from other sources, such as property rents and others. So, we use them to augment what we earn from the train services. So, it has been a serious headache, I won’t lie to you. It has been stressful and the NRC owes marketers for diesel, but we cannot stop. Everything we get, either from operations or elsewhere, is to ensure that the trains run, because that is what the railway is meant for. We have to provide the service.
Do you consider increasing fares as airlines did?
The airlines can do that. It is production that really comes first for us and not cost. How many people are flying now? You can imagine that two airlines, Aero and Dana, dropped out recently. Most of the time, the planes of airlines that are currently operating are empty when you fly. Somebody who has about N25,000 to fly before, when you ask him to pay N75,000 now, he will find a way around what he would have travelled to do. So we consider these issues in the railway sector. You can increase the price but you may price yourself out of business. When the conditions were good, people just entered the trains for fun. You would hear them say the train was good, let us go and see. So, you have to balance the issue of pricing in order not to increase it beyond the reach of passengers. What we are requesting for is a review but not to raise prices beyond the reach of travellers. You have to look at the purchasing power of your customers. Also, you need to understand that some people can decide to go by road because the increase in petrol price is minimal due to the subsidy on it. But for diesel, it is free market, being a deregulated product.
Are there alternatives you are considering to cushion the impact of this hike on diesel price?
We are looking at how fast we can connect our trains to electricity. We are discussing with various people who said they can provide power. So, it is either by connecting our trains to run using electricity or by changing our locomotives to run on gas. We are also assessing how readily available these alternatives are. We are exploring these options presently. We are considering them as alternatives instead of diesel. So, we are studying it. We have some people who have come to us and are working with our men in the research department to see if the present locomotives we have can be converted. And how possible is it that if we want to get new locomotives, we can make them run on gas. We are also sourcing how easily available are these things we are talking about.
However, I think the best option is to have an Independent Power Project that will service the rail, but it will not be the same rating with the regular domestic power supply. This is to avert a situation where people will start tapping into it. So, we have to do it in a way that if you are talking about 50 hertz frequency for the regular power supply, the frequency and voltage for the rail IPP should be different, so that even if they tap the power, it will not work for them. That is what we are looking at presently and what we are discussing with potential investors. When we do that, we believe it will be cheaper and easier to maintain because we will now have fewer moving parts of the locomotive when you are powered with electricity. We are discussing with the potential investors and they are going around looking at our right of way and other facilities, as well as how they can come in.
You should also know that while doing this new rail modernisation, we are already providing some elements of power because we have 33kV transmission lines on Abuja-Kaduna route. It is also ongoing on the Lagos-Ibadan route. The only area we have issues with is the Itakpe-Warri line and this is because of people who went to cut some of these things. We have a dedicated 33kV line from Kaduna to Abuja that takes power to the stations. And our right of way is done in a way that the head room is provided for to take a full electric train in future. So, they are studying it to see how they can come in. Also, the NRC Act permits us to generate power that is to be used by the NRC.
When are you resuming operations on the Abuja-Kaduna train service?
We are working seriously on that issue, which is one of the reasons why I’m in Abuja. We’ve been having meetings about it and we are also interfacing with the security agencies to see how soon we can come up with a very good measure of guiding the trains. The team, which is looking at that, knows that you cannot just guide the trains without guiding Nigerians. So, we are looking at that and we are going to come up with something soon. We are looking at how to provide proper real-time security. And we have seen different groups that said they have the knowledge and know-how, and we are talking with them. But we will not wait till we have that technology. We are looking at how best to operate and protect Nigerians who use the trains, as well as protect the tracks.
The government once said it was considering those who were still held hostage by terrorists and that was why activities had yet to resume on that route. What will you say about this?
There are various variables. It is sentimentally not right to start, but we will weigh the options and that is why the government, through the minister, set up a committee to provide advice on how best to go about the situation. We pray they get them (abductees) out quickly, but we cannot just shut down for life. The government knows that too and that is why the minister set up the committee to review and come out with the best way to do it, because we don’t know when the last person will come out. Tthe government is working to see how they come out quickly. However, we are not in the minds of those who are holding them.
What would be your word to passengers who use trains, in terms of safety?
The train is the best and safest means of travelling. But they should also look out for any suspicious movement and report to the person they know they can trust. My number is available. If they suspect anything when boarding our trains, they can call me and I will answer. We have our phone numbers and emails in the public. Also, nothing stops an individual from alerting the police officers who are always on the trains or at their stations of any suspicious movement. We should be our brothers’ keeper. We should not destroy the infrastructure that we spend our money to build.
There seems to be a reduction in the vandalism of rail infrastructure. Any word from you on that?
I cannot confirm that now because it is one thing to hear about it and another thing for it to be happening and you are not hearing about it. This is because it can be happening and you won’t know about it immediately because what we’ve discovered is that most of the time before you discover, it might have happened about a month ago. But on the Zamfara axis, I think the police are doing very well. They have been arresting vandals massively. Those vandals are so daring, to the extent that we lost a technical officer recently to track vandalism. He was shot. He heard about the activities of vandals on a track and he went there without the police and he was shot. But after that, the police have really come up and have arrested about seven of the vandals.
Is the Lagos-Kano train service operating?
No, the Lagos-Kano service has been stopped because the last train that went to Kano couldn’t return. This was because the same thing that was happening on the Abuja-Kaduna route was happening between Minna and Kaduna. So, we couldn’t operate our trains between Minna and Kaduna, which led to the stoppage of the Lagos-Kano service. However, the manager told me that it seems peace is gradually returning. But we will need to get a green flag, so we can inspect to know the condition of the track before we can send any train.
Another thing we are working on seriously is to see how we can commence freight on the standard gauge between Ibadan and Lagos. This is because our tracks have entered the APM Terminal in Lagos and we are working with off-takers to see how best we can move goods from the ports to Ibadan, instead of people coming all the way to Lagos. This will enable them to pick their loads from Ibadan where we have a freight yard and massive warehouse.
Is the Port Harcourt-Maiduguri line still being worked on?
The Port Harcourt-Maiduguri construction is ongoing. When the minister went there, the brief from the contractors was that they have passed Aba, heading towards Umuahia on land/right-of-way clearing, and that they have done some culverts. We also saw the drainages that they have done and we are asking them to quickly deliver Port Harcourt-Aba, while they continue to head northwards. They promised that they would do that. But the major problem is that of funding as we have in all our projects. The Port Harcourt-Maiduguri line is a narrow gauge line. The contract for the narrow gauge is $3.5bn, while that of the standard gauge is $13.5bn. The government is saying, “let’s make the Port Harcourt- Maiduguri functional and not just that, we are extending it to Bonny Deep Seaport and the Onne Port.”
Article first published on the Punch Website