The following article by Amaka Anagor was originally published by BusinessDay on September 9, 2013 Click here


NRC needs over N12.5bn investment in locomotives for effective container haulage

For importers and businessmen based in Northern Nigeria to feel the impact of the newly resuscitated container haulage by train from Lagos Port Complex, Apapa, to Kaduna and Kano, the Nigerian Railway Corporation (NRC) needs to focus on acquisition of more locomotives, BusinessDay has learnt.

According to industry analysts, container haulage by train can be effectively carried out if NRC moves further to acquire not less than 50 new locomotives for that particular purpose, to complement the four that already exist.

Only recently the NRC acquired four new locomotives that were deployed to lift cargoes from Apapa port to the North for the sum of N1 billion, that is N250 million each. Therefore, for the corporation to satisfy the needs of Inland Container Nigeria Limited (ICNL) as well as other Northern based importers, the NRC needs to invest about N12.5 billion in acquisition of 50 new locomotives for container haulage to the North.

The four locomotives can only evacuate about 80 Twenty Equivalent Units (TEUs) of 40 footer containers on a monthly basis. This is owing to the fact that only 20 TEUs of containers can be evacuated in a week, which is less than 5 percent of the total 1,500 TEUs of containers that is being taken to the North every month by ICNL, the client that receives the containers that are currently being carried by NRC to Kaduna and Kano.

Confirming this recently, Tope Borishade, chairman of ICNL, at the flagged-off ceremony of container haulage from Apapa to the North, urged NRC to work on increasing the number of trains on its fleet in order to grow the number of containers that can be moved by rail to the North. He estimated that NRC needed nothing less than 50 locomotives to be able to carry a total number of 1000 TEUs for the terminal on a monthly basis.

Tony Iju Nwabunike, a director in ICNL, believes that Northern based importers can now trade cheaper, if the cost of moving cargo from the seaport to the importer’s warehouse is reduced by 50 percent, saying there is need for NRC to increase its turnaround time. By his estimate, trains need to load containers from Lagos port to the North for over 10 times in a week.

“If the NRC continues its container haulage business with only four locomotives, it means that in decades to come Northern businessmen and importers may not benefit from the recent rehabilitation of railway services in the country,” said Aliyu Musa, a Kano-based importer.

Musa, who commended the effort of the Adeseyi Sijuwade-led management of NRC in reviving the Nigerian rail transport after several years of being dormant, urged the management to further invest in acquisition of more locomotives so that importers and businessmen can take part in the gains of container haulage by rail.

Findings have shown that about 40 percent of Nigeria-bound cargoes go up North. A total of 877,737 TEUs of containers that were imported into the country in 2012, meaning that a total of 351,095 TEUs of containers were North bound. This shows that the NRC has a market potential of about 351,095 TEUs of containers to be delivered up North on a yearly basis.

In terms of general cargoes, a total number of 77 million metric tons of general cargoes were imported through the seaport in 2012. By estimation, about 30.8 million metric tons of cargoes are meant for industries in the North, which also provides big market for rail transportation.

BusinessDay investigations also reveal that moving a 40-foot container by rail from Lagos ports to Kaduna and Kano results to about 50 percent reduction in delivery cost. Therefore, importers, who used to pay over N380,000 to evacuate a 40-footer container from Lagos by road to the North using truck, now pay about N170,000, to evacuate the same container by rail.