Nigeria needs $17.5bn to modernise railways –World Bank

Nigeria will require about $17.5bn to modernise its railway system, World Bank Country Director, Mr. Onno Ruhl, has said.

In a paper presented at the just concluded conference on the revitalisation of railway infrastructure in Abuja, Ruhl said studies estimated capital cost of conversion from the present narrow gauge railway to standard gauge at between $1.5m and $5.0 m per route km.

“For a railway system of about 3,500 route-km, this would translate into an investment of between $5.25 and $17.5bn,” Ruhl said in the paper which was made available to our correspondent on Monday.

In order to improve on infrastructure, Nigeria is seeking investments in the railway sector in order to match the increasing rate of freights and passengers.

Last Tuesday, the Managing Director of Nigeria Railway Corporation, Mazi J. C. Nwankwo said Nigeria would require about $15bn in the next 10 years to fix its dilapidated railway sector.

Ruhl, however, said from an economic and financial viability point of view, the modest traffic volumes of five to 10 million tonnes per year of freight and nine million passengers would not support the high level of investment on gauge conversion.

“There were also alternative recommendations that the present narrow gauge railway, after rehabilitation, could effectively meet the expected traffic volume for the foreseeable future (10-20 million gross tonnes per year) and render competitive service quality,” he said.

According to him, the narrow gauge railway was quite capable of transporting 100 million tonnes of freight per year at competitive costs as was the experience in South Africa where about 150 million tonnes of freight moves on the same type of gauge.

While citing several research studies on the prospects of the railway sector, Ruhl said it could be conservatively estimated that a rehabilitated and an efficiently operated railway system in Nigeria had the potential of growing freight traffic volume to 4.2 million tonnes over a period of four to five years (by 2010) on the narrow gauge system.

“In subsequent years, the traffic by rail would grow further in line with seven to eight per cent rate of economic growth of the country,” he said.

According to him, the traffic volume on the narrow gauge system can possibly grow to 5.6 million tonnes by 2015 and to 7.5 million tonnes by 2020 assuming an average growth in traffic volume at six per cent per year.

“At the same time, it was conservatively estimated that railways, when restored, would possibly carry about nine and 10 million passengers per year by 2010,” he added. punch online