The Federal Government on Monday, said that the country would require a $166 billion financial outlay over the next five years if the country’s energy and transport infrastructure needs are to be met.
Minister of Transportation, Rotimi Amaechi, disclosed this while speaking at the public hearing organised by the House of Representatives Committee on Land and Transport, on two bills seeking to establish the Nigerian Railway Authority and the National Transport Commission.
The minister said that based on the huge financial requirement, the Buhari administration had entered into an agreement with General Electric for the commercialisation of the Lagos-Kano railway project.
“Besides privatisation, government also realised a monumental infrastructure deficit hitch as at 2015 stood at over $3.05 trillion in 30 years, or $166 billion in five years with energy and transport infrastructure taking more than 50 per cent of that need.
“Transport infrastructure alone needs a whopping $50.9 billion in five years to cover the current gap in the sector, an average of $10.2 billion per year. Currently, the ratio of funding in the sector between the public and private is 9:1. This constituted a major disincentive to private sector participation in the industry.
“In addition, it is considered imperative to intimate this committee that full government ownership and management of these agencies had inherent restrictions for third party funding, undue government interferences, burdensome bureaucratic structures, and over bloated work force amongst others,” the minister said.
Amaechi added that privatisation of the railway would conflict with public interest, stating that “governments all over the world have realised that it is not best suited in ownership and management of businesses and as such consider it imperative to shift from purely government to Public Private Partnership (PPP)”.
Declaring the public hearing open, Speaker Yakubu Dogara urged that the Nigerian Railway Authority bill which spells out the operations and regulatory framework for the railway sector should be thoroughly examined by all stakeholders.
The Speaker said that an efficient rail system is a much safer and cheaper mode of transporting goods, services and persons across the length and breadth of Nigeria, adding that “it will reduce drastically the damage done to our roads and highways by heavy duty trucks.
“Rail transportation also provides a strong foundation for industrial activities in any economy as the haulage of raw materials can be effectively undertaken though the railways.”