Privatising the Transport Sector


Mixed reactions greet the proposal by the federal government to privatise transportation infrastructure among them roads, air, sea and inland ports

By Vincent Nzemeke  |  May 12, 2014 @ 01:00 GMT

BARRING any unforeseen circumstances, the federal government proposes to open up the nation’s transportation infrastructure for private sector participation. At the last federal executive council, FEC, meeting which held on April 16, 2014, the federal government considered four bills which designed for this purpose.

When finally approved by the council and sent to the National Assembly for passage into law, private investors would be allowed to build, operate and maintain airports, seaports and road infrastructure in the country. The bills are the National Transport Commission Bill (2014), the Nigerian Railway Bill (2014), The Nigerian Ports and Harbour Authority Bill (2014) and the National Inland Waterways Authority Bill (2014).

Idris Audu

Shedding light on the proposal, Labaran Maku, minister of information, said the bills were forwarded to the FEC by Senator Idris Audu,  minister of transport and that a council committee had been set up to take a proper look at their contents. Maku further stated that if eventually the proposals eventually became laws, the government would hands-off the affairs of the transport sector just as it has done with power, communication and other sectors that have been privatised.

Ever since Maku made the disclosure, the social media platforms such facebook and twitter are awash with reactions of Nigerians on  the planned privatisation of the transport industry. Many of those who commented on the issue lamented the fact that it was coming at a time when the benefits of the privatised power sector were yet to be seen. Some also called on the federal government to exercise some restraints before accepting the proposal because the transport industry is germane to  the development of the country’s economy.

 Chigbo Anichebe, public relations officer of the Bureau of Public Enterprises, BPE, said  the road to privatisation of the transport sector is a long one with many challenges. “One thing is that Nigerians have come to believe that once a sector is privatised, then everything will be good, just like flipping a switch. But privatisation takes time and investment. When the telecom sector was first privatised, there were a lot of contentious issues. And that is what is happening in the power sector presently. We started the journey since 1991 but it was in 2001 that the policy to privatise the sector was approved and it was finally signed in 2005. After that, we then had to set up the National Electricity Commission, NEC, to regulate the sector. So, it takes a long process.

“When the seaports were managed solely by the Nigerian Ports Authority, it was a sorry tale. But since the private sector took over following the concession agreement with the federal government, things have changed. So, the government wants that kind of success in other sectors of the economy. It may take time because there are various processes involved in privatisation,” he said.

But despite Chigbo’s assurances that the privatisation of the transport industry would be beneficial, many Nigerians are not convinced about it. Francis Onukwura, an Abuja based investment consultant has called for caution. He said the government must take things slowly in order to ensure that only the best players in the industry partake in the privatization process.

“Given that Nigeria has become a high risk country for investments and investors, I would say that it is better that the government should take things slowly because privatisation involves calling in investments. And some people are sceptical of the economy in spite of the recent biased report that Nigeria is the largest economy in Africa. The power sector is yet to stabilise although we know that it would take some time for things to settle. The government needs to be through with such processes so that it does not just end up in the hands of unqualified persons,” he said.

Francis Onukwura

Some members of the national union of road transport workers, NURTW, in Abuja are also calling for caution.  Although many of them are not even aware of the plan, they appear not to be positively disposed to privatisation.

Speaking during a public enlightenment radio programme in Abuja recently, Amos Odunayo a member of NURTW said:  “We have not been informed of any intention by the government to begin the privatisation process of the roads. What I will do is that I will let my superiors know about it and if we see that it is not a step that will be favourable to us and other road users, we will protest to let the country know our position,” he said.

Bolaji Akinola, the public relations officer of the seaports terminal operators’ association of Nigeria, STOAN, another guest on the programme said the proposal is a step in the right direction.  According to him, other than regulating and providing a conducive environment, the government has no business in the transport industry.

“The seaports were already being run by the private sector under concession and we have noticed tremendous investment since we started in 2006. The government really has no business being in the business of transportation. When the Nigerian Port Authority, NPA, was in charge, there was no facility on the ground to off load cargo from ships. The ports were going into a moribund state. Waiting time for ships used to be 30 days but right now, it is just about one day. Investment is going on every day now which did not exist in the past. For now, the NPA is in charge of regulating the activities at the sea ports which is what government should be doing. It also set up the Council for the Regulation of Freight Forwarding in Nigeria ,CRFFN, to ensure that standards are kept.

Now, if the government intends to go into full privatisation, then we will have the right of first refusal because they are in contract with us. The concession agreement was for 25 years so we still have about 16 more years in the contract. I don’t see that as any problem. I mean private sector business is the best, the seaports can attest to that”, he said.

Ordinary Nigerians, however, appear to be indifferent to the planned privatisation. For many of them, an effective transport system is all that matters and if granting private investors the powers to control the industry would guarantee that,then the government can go ahead with the plan.

Samuel Ogbe, a civil servant, said: “Anything they decide to do as long as it would be for the good of the people, is a welcome development.”

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