FG seeks $166bn to fund energy, transport sectors

The Federal Government said on Monday that it would cost as much as $166bn in the next five years to provide infrastructure in energy and transport sectors of the economy.

It stated that the money could rise to $3.05tn in 30 years.

The Minister of Transportation, Mr. Rotimi Amaechi, gave the figures at the National Assembly in Abuja.
The minister was speaking at the opening of a public hearing by the House of Representatives on the Nigerian Railway Authority Bill and the National Transport Commission Bill.

He hinted that the Lagos-Kano rail line would be commercialised in line with an arrangement with General Electric.

Amaechi added, “Besides privatisation, government also realised a monumental infrastructure deficit, which as of 2015 stood at over $3.05tn in 30 years or $166bn in five years, with energy and transport infrastructure taking more than 50 per cent of that need.

“Transport infrastructure alone needs a whopping $50.9bn in five years to cover the current gap in the sector, an average of $10.2bn 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 bloated workforce amongst others.”

The minister dismissed the idea of full privatisation of the rail sector on the grounds that it was in conflict with public interest.

He explained, “Governments all over the world have realised that it is not best suited in ownership and management of businesses and as such considered it imperative to shift from purely government to Public Private Partnership ownership.

“The policy therefore is intended to guarantee efficiency, sustainability, competitiveness and profitability.

“To actualise these objectives, the Federal Government had established a trajectory towards driving the model. These led to the institutionalisation of agencies such as the Bureau of Public Enterprises and the Infrastructure Concession Regulatory Commission with the statutory power to superintend the transition of government-owned concerns to the private sector under the various models of PPP.”

The Speaker of the House, Mr. Yakubu Dogara, was represented at the session by the Chief Whip of the House, Mr. Alhassan Ado-Doguwa.

Dogara said the House would support any legislation that promoted safer, cheaper and efficient rail transport sector.

The Speaker noted, “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.

“The current effort by the Muhammadu Buhari administration to consolidate the revival of the rail sector, evidenced by the recent presidential trip to China and the appropriation by the National Assembly of billions of naira to it in the 2016 budget, is highly commendable.

“It must also be accompanied with a revised up-to-date legal framework to organise and regulate the sector.”