Refutes concessioning maritime security to a private firm
TRANSPORT Minister Idris Umar yesterday announced a Federal Government move to remove its monopoly over building and ownership of rail lines and the railways, saying it is set to repeal and re-enact the Nigerian Railway Act of 1955.
The Act gives exclusive rights of ownership of the railway to only the Nigerian Railway Corporation (NRC), making it impossible for the private sector and the state governments to play a role in the establishment and ownership of the rail lines and the railways.
Senator Umar told a forum in Abuja that when the envisaged bill comes on stream, the monopoly of the Federal Government would be broken and the private sector and the state governments will be free to invest in the sector.
The minister also defended the partnership between the Nigerian Maritime Administration and Safety Agency (NIMASA) and a private company (Global West Vessels Specialist Nigeria Limited; owned by former militant leader, Tompolo) over the maintenance of security in the nation’s territorial waters, saying government has not concessioned the security of the waters to a private firm.
The company, Umar noted, is to provide platforms, equipment, boats and expertise to maintain the safety and are required to carry out surveillance of our entire territorial waters.
Describing the reports alleging that government has concessioned the security of the nation’s territorial waters as “irritating and wrong”, he emphasised that “the personnel of this company are not going to bear arms. That is the responsibility of the Nigerian Navy.”
Umar explained the essence of the new bill, stating that “presently, we are working on a bill in collaboration with the Bureau for Public Enterprises (BPE). Mr. President will soon present that bill to the National Assembly as an Executive bill seeking to repeal and re-enact the Nigerian Railway Act of 1955. That Act gives exclusive rights of ownership of the railway to the Nigerian Railway Corporation. And so, for the private sector and the state governments to play a role in the establishment and ownership of the rail lines and the railways, the Nigerian Railway Act of 1955 must be repealed and re-enacted. The envisaged bill is with the Attorney-General of the Federation and Minister of Justice. As soon as it gets his blessings, it will be forwarded to Mr. President who will bring it to the Federal Executive Council (FEC) for the usual approval before it is sent to the National Assembly. I am sure that in the next couple of weeks, that will be done.
“It is very, very difficult for government to finance projects 100 per cent. You can imagine Lagos to Ibadan new standard gauge alone to cost $1.5 billion. Imagine how much money government would need to finance the new rail lines all over the country, from Lagos to Abuja, from Abuja to Maiduguri, or from Port Harcourt to Maiduguri and from Lagos to Enugu. You can imagine the amount of money involved and the competing needs on the lean resources of government. So, it is of necessity that the private sector is a partner with government. And that is why we have been going round the world looking for investors, discussing with them and trying to woo them to come and invest in the various transport infrastructure projects, particularly the railways. Of course, people will argue that most countries in the world where the railways has been successful, the government has to bear the cost. But then, when you have this very serious challenge of funds, then you have to look inwards and invite the private sector and see if you can get those who will be prepared to put in their money. What is important for us is to ensure that this infrastructure is re-introduced and developed.”
On the partnership between NIMASA and the private firm, Umar added that “NIMASA was established by an Act of parliament, the Nigerian Maritime Administration and Safety Agency Act. And it is empowered to take charge of administration and safety of our waters. And it is empowered to carry out its responsibilities and functions either by itself, through any institution of government or in partnership with any agency of government; through or partnership with any limited liability company or natural person.
“The Global West Limited that has now entered into partnership with NIMASA, the mandate of that company is to provide platforms, equipment, boats and expertise to maintain the safety of the waters, that are required to carry out surveillance of our entire territorial waters. The personnel of this company are not going to bear arms. That is the responsibility of the Nigerian Navy. So, people should not make the mistake to believe that government has concessioned the security of our waters to a private firm. No. This is not true. Because of the enormity of the capital required, government needed to partner with the private sector. And this partnership is on a no-cue, no-pay basis. This means that the company will only be entitled to their fees when they are able to reach an agreed target with NIMASA. The years 2010 and 2011 are taken as the benchmark in computing whatever fees that will accrue to them. And they will be only entitled to payment on fees on surpassing the benchmark set on collection of dues.
“Whatever it gets over the benchmark set is what it will be entitled to charge fees from. If it is able to get additional funds over the benchmark, then it is entitled to 50 per cent of the additional funds. If the company is unable to get up to the benchmark, it is not entitled to any payment. The essence of that is to allow them to recoup their investment as they are going to invest about $103 million for this project. Government is not going to give them this money. And that benchmark is going to be reviewed every three years. That is to put them on their toes. And of course, NIMASA is there to watch them including the Nigerian Navy. And don’t forget that there is an existing Memorandum of Understanding between the Navy and NIMASA. This is in fulfilment of the security aspect of the NIMASA mandate whereby the Navy provides the required security in terms of handling of arms.”