The real money in rail is in freight haulage — Jerry Oche

The real money in rail is in freight haulage — Jerry Oche


The Lagos Railway District Manager, Nigerian Railway Corporation (NRC), Jerry Oche, believes that the transportation of freight by the corporation will be more profitable than the transportation of passengers. While the transportation of passengers is subsidized, he says, the haulage of cargo by rail will generate more revenue for the NRC, in addition to taking trucks off the roads. He speaks with SHIPS & PORTS’ Tosin Aribisala. 


What are the practical measures being put in place to stop potential kidnapping of passengers especially when a train suddenly develops mechanical fault?

It is true that we have recorded scenarios where our train developed faults on the way but bandits or kidnappers did not attack them. However, in such cases, whether there are faults or not, all our trains have security men stationed in them but passengers do not know where they are on the train. Every of our train has the Nigeria Security and Civil Defense Corps, the Police and the Man O War. So, the first thing we do if there is a failure or whatever the situation we encounter is for the security officials to secure the environment and ensure the passengers are safe while making arrangements. Kidnapping is rare because the train doesn’t stop unless at stations. 


The Minister of Transportation, Rotimi Amaechi, recently said that the Federal Government borrowed $2.5 billion to finance the construction of the Lagos-Ibadan rail line. Will the operation of the rail line be profitable enough to repay the loan? 

Now the first thing to look at is the potentials in this project. We are doing passenger train services now which have transcended beyond our expectation in terms of patronage. There is also a freight angle to it. It should not be forgotten that this project is Lagos-Ibadan and then the line to the port is an addendum. The Honorable Minister of Transportation Rotimi Amechi in his wisdom asked how profitable it will be for us if we brought the standard gauge to Lagos and not make it enter the port, so we decided to extend it to the port. We would be transporting goods to the ports and the real money in rail is in freight haulage. This is because that is where the volume is. What we charge in terms of freight is a ton per kilometer. For example, if we are doing a thousand kilometers, how many tones are we carrying for you? Sixty tons multiplied by the total kilometer determines the price to pay. Passenger fare is fixed. For example, the executive class on the Lagos-Ibadan train is N6,000. I’m not going to look at your weight and I’ll say because you weigh less, you’ll pay low. No. It is fixed, but if it is goods, the first thing I’ll do is to weigh them. Two different people can come with two different goods having different weights. If someone has a hundred tons, that will be calculated as a hundred tons multiplied by the distance to Ibadan and the other one has 10 tons. That will be 10 tons multiplied by the distance covered.

You can see that is where the money is for cargo haulage in rail transport. As a matter of fact, most developed countries subsidize passengers rail transportation because they see it as government responsibility to the people. So, if we take it from that angle, what volume of traffic duty are we going to make from the port and we shouldn’t forget that we also have an Inland Container Depot (ICD) in Ibadan at Moniya. It is also important to have an idea of the companies coming up along the track at Ibadan because there is now the possibility for one to move finished products or raw materials. 

It is also worthy of note to know that as part of this project, we have the wagon assembly plant at Kajola that is expected to employ over 50,000 people and possibly be a hub for rail wagons and locomotives for Africa. When the track is fully operational, it will take a number of trucks off the road, expand the lifespan of the road and reduce or totally eradicate traffic jam. So, how do you quantify all these benefits that will accrue from the Lagos-Ibadan rail line? As a matter of fact, this project has revolutionized traffic experience especially in Lagos-Ibadan. I am one of those that ply Lagos-Ibadan every week because my family is in Ibadan. Recently, I have been traveling by train. I’ve met so many people on the train that do the same. These are people that go with their cars and drivers every weekend. Now, the car is resting in Lagos or somewhere, or in Ibadan and they are enjoying the train. Now, if we are asking whether this project has justified the loan borrowed, I would say that it can definitely pay for itself. The Kaduna-Abuja that is purely passenger train service is paying let alone Lagos-Ibadan that is used for freight and passengers transport. It is a very big project; it would pay for itself.


What is your projected monthly income on the Lagos-Ibadan line? 

Actually, we have not fixed our price and we can’t say for now because we have not started full-scale operation. I said the other time that we don’t just fix prices; we do what we call operating expenditure (OPEX) and we also have to be competitive with other means of transportation. After all, we are not a non-governmental organization (NGO); we are a transport company and we are here to make money. So, we would need to sit down and look at what it costs to move a train from Lagos to Ibadan before fixing the price. However, on our narrow gauge for now, our rate is N7:10k per ton per kilometer. If anybody gives you a better price by road, come to me, I’ll refund you if you move by train. For instance, if Ibadan from Lagos is 192 kilometers, let’s say I do 40 tons of wagon; it would be 40 × 7.1 × 193 which equals to N54,812. But here, this is what we do: there is what we call the minimum distance. For example, we can’t do two kilometers for you because I’m not going to make the money. So, what we are doing is a hundred kilometers. For instance, the shuttle, we charge N100,000 to and fro. I go to the port, bring out your import for you, I offload and take the empty train for you for N100,000. Who does that? If anybody does less than that, come to me. Nobody does that. So, you can’t compare rail, in terms of cost, with any other means of transportation.


The station buildings, especially the major ones at Ebute Metta, Abeokuta, and Ibadan are reportedly equipped with modern facilities such as escalators, lifts and VIP sections, among others. What are the strategies deployed by NRC to maintain all these facilities even after the tenure of the present administration? 

There’s nothing special about the escalator and other facilities there. In fact, that is the least of our work. That is not an issue. Cocoa house in Ibadan is over how many years? I was there last week; the lift is still working. Why do we think that we would not be able to maintain all the facilities there? There is nothing special about those facilities. Rather, what we should be asking ourselves is how do we keep the train running even after the Chinese leave so that the trains would not pack up? The question is how have we been able to maintain the narrow gauge? The narrow gauge started operation in 1898. It has been running. The pipes you saw while coming up here are all going to Kaduna. We ran a train to Kaduna about four days ago. This second one is leaving for Kaduna before the weekend. I do four trips everyday conveying an average of 10,000 people between Ogun State and Lagos State. Before coming for this session, I was coming from a supervision where we are using very sophisticated equipment. How have we been maintaining it? We have. The truth is, rail transport is capital intensive. We have a government that is so interested in rail right now and they are investing. Are we going to have the same after this government? I do not know. This is because if government interest is not there to fund the railways, it is not my salary that would be used to maintain the railways. However, if the funding is there, the capability is there. We have run Kaduna-Abuja for about five years now; we started in 2015. It was last year we started hearing about failures.


A train conveying passengers to Abuja from Kaduna developed a mechanical fault last month, igniting anger in the passengers. The Minister of Transportation blamed it on the Chinese faulty spare part used for the construction of the line. What are you doing avoid episodes like this on the Lagos-Ibadan railway?

Yes, the Honourable Minister of Transportation, Rt Hon Rotimi Amaechi complained that the locomotives are failing and complained to the Chinese company in charge to quickly rectify it. Asides from the solidification process going on at a portion of the line somewhere at the port, the Chinese have been instructed to make every part of the project complete. What happened in the Abuja-Kaduna line is a lesson to us, which must not be repeated here. We have told the company and a close supervision is on to ensure that.


Till now, narrow gauge line has been the only route, through which containers are transported to and from the port. What is delaying the standard gauge from moving containers?

The standard gauge is up to a year now but the branch line to APMT at Apapa which is the major container terminal in the port is currently experiencing ongoing construction. We haven’t assessed APMT yet with heavy imports but the question again is why are we not transporting general cargos and other imports? There is a portion of the standard gauge around Apapa where we noticed a depression. As a matter of fact, we could all pretend and say let’s start operating and then after some months, we come back and tell Nigerians that we noticed this problem and we are stopping to fix it or we tell ourselves the truth now and fix the problem before we start operating. So, the construction company has told us that it will take them six months and that is what we are working towards. We don’t want to start operating and after some time, we shut down. Also, what if we close our eyes and the Chinese hand over and disappear and that now becomes our problem? Let them fix it. That is just the only thing. But between here and Ibadan, we don’t have any issues and that is why we are running passenger trains and we carry some freight between here and there. 


Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to as the source.

Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to as the source.