Concession of railway services coming soon – NRC MD

Managing Director of the Nigerian Railway Corporation, Fidet Okhiria, has hinted about plans for the concession of train operations in the country as a way to speed up and sustain ongoing development of rail transport system.

He stated this just as he said the corporation would continue to run the system in ways that would make the repayment of loans taken easy.

Okhiria spoke on Wednesday when he appeared at a town hall meeting organised by Raypower FM under the theme: “Interrogating the Essence of Chinese loans in Nigeria”.

Recently, Minister of Transportation, Rotimi Amaechi, said the Federal Government had taken $2.5bn loan to complete the new 156km Lagos-Ibadan railway built by China Civil Engineering Construction Corporation.

Okhiria said at the Raypower forum that the corporation was considering concession and efficiently moving rail at an affordable price to quickly turn out the repayment.

“We are not ruling out even concession of the railways,” he said.

The NRC MD however did not give details on when and how the concession would be achieved.

A concession agreement, according to Investopedia, is a contract that gives a company the right to operate a specific business within a government’s jurisdiction or on another firm’s property, subject to particular terms. “Concession agreements often involve contracts between the nongovernmental owner of a facility and a concession owner, or concessionaire. The agreement grants the concessionaire exclusive rights to operate their business in the facility for a stated time and under specified conditions,” the authority adds.

A project consultant and partner at ALG, Joan Miquel Vilardell, contributing to an AfDB Transport Forum discussion, had said that the private sector participation had been positive in several railways worldwide, usually under concession.

But he noted that the initial concession model used in Africa and Latin America had not led to enough investment, especially in infrastructure.