The Federal Government’s newly rehabilitated rail loop lines linking various oil tank farms at Apapa, Lagos have been overtaken by thick bush, eight months after rehabilitation, Financial Vanguard investigation has revealed. The project which was handled by China Civil Engineering Construction Corporation, CCECC, has remained unused after it was completed.
A prototype light rail ... proposed for Lagos

File Photo: A prototype light rail … proposed for Lagos

The rail to tank farm project which involved laying of tracks into the farm yards, so that petroleum products can be hauled directly into rail tank wagons was completed in December, 2014 and cost the Federal Government N1.6 billion.

The tracks were upgraded from 60 to 85 pounds in order for the tracks to be able to withstand the expected increase in weight that will result from direct haulage of petroleum products by rail.

Recall that the Managing Director, Nigeria Railway Corporation, NRC Engr. Adeseyi Sijuade who spoke through the Director, Mechanical/Electrical Signal and Telecommunications, Engr. Fidet Okhira, told reporters during the inspection of the project last year that the rehabilitation had become imperative because, the tracks were worn out already as they have been there since the colonial days.

Oil companies captured in the project included: A-Z Petroleum, Oando Petroleum, Total Petroleum, Mobil, Eurafric Energy Ltd, and Forte Oil. However, when Vanguard visited the rail lines at Apapa, it was discovered that the newly rehabilitated tracks have disappeared into a thick bush, a sign that eight months after it was completed, the rail line has remained unused.

Also recall that in May, 2015 at the peak of the fuel crisis that gripped the country with the attendant gridlock along the Apapa-Oshodi expressway, the corporation had said it was in negotiations with Major Oil Marketers Association of Nigeria, MOMAN as well as the Petroleum Equalisation Fund, PEF, to begin lifting of petroleum products by rail through the rehabilitated rail lines.

Director of Operations, NRC, Mr. Niyi Alli, had told  Vanguard  at the time that the corporation had all the capacity to lift 1.8 million litres, an equivalent of 30 truckloads of PMS at once through rail, adding that once discussions were concluded and all safety concerns resolved, lifting would commence in earnest.

He had also noted at the time that the corporation, had “gone ahead to do all the sidings for the major oil marketers and have acquired wagons which are to be used for the movement across the country. We have also engaged the PEF to ensure that the price of PMS is maintained, in terms of the PMS movement. For us, it is all about ensuring that all safety issues are resolved.

This is because carrying PMS is not the same as carrying AGO. PMS is highly inflammable. But the good news is that all stakeholders are sitting round the table to ensure that safety is not compromised.”

However two months after this engagement started, movement of PMS by the rail has yet to commence, a situation that has left industry watchers wondering what would become of the huge investment made in the rehabilitation of the loop lines for the sole purpose of evacuating petroleum products directly from the oil tank farms.

Analysis

The rail to oil tank farms was conceptualised to ease movement of petroleum products from oil depots. The Nigeria railway has repeatedly said that it has the capacity to move 900,000 litres of PMS, an equivalent of 30 trucks, at once; as it has dedicated two big trains that can move 1.8 million litres of petroleum.

But to get the oil marketers on board had been a tug of war. The issue at stake include safety measures and the cost of investment for oil marketers who hitherto moved their products by road.

On the safety side, the corporation said it had put in place modalities that when all stakeholders involved agree, could minimise any incidence of loss and that will determine the frequency of evacuation by rail which will in turn determine its impact in decongesting the road.

On the other hand, the oil marketers are sceptical of the arrangement since resorting to rail haulage may mean loss of investment on their hundreds of thousands of trucks on the road. It will further lead to loss of jobs on the part of tanker drivers.    It also means a renegotiation of the cost of petroleum products as lifting by rail would possibly drive down cost of haulage and have impact on the retail price.

Industry watchers believe that to truly achieve this objective and get the marketers to come on board, the rail sector has to be liberalised. A Public Private Partnership initiative for instance, will provide room for the oil marketers to divest in trucks and invest in oil tank wagons. Unfortunately the new Railway Bill which could make this possible is still pending at the National Assembly.

Experts believe that until this happens, any attempt to get the marketers or other private operators involved will eventually lead to the federal government shouldering the cost of moving products by rail on behalf of the marketers. Already, the tank farms belonging to the major oil marketers captured in the rail to tank farm project bore no cost in the entire project yet they remain unwilling to move their products by rail.

Sijuade reacts

When contacted on the development, Managing Director of NRC, Engr. Adeseyi Sijuade, told  Vanguard  that  MOMAN, PEF and the railway management are still in talks on how to proceed with the project. He said: “Not only did we meet with MOMAN; we also met with the Executive Secretary of Petroleum Equalisation Fund, (Mrs. Asabe Asmau Ahmed).

We had a meeting with her and we have reached a stage where MOMAN has actually brought out their proposal about which cost element will need to be funded by PEF. PEF will then review that and once we get approval from them, we will be able to commence lifting.”

He added: “I think it’s just that if you are moving petroleum products all the way to Kano, you want to ensure that you are still selling at the same price. So, just as we do with the road tankers, someone has to fund that cost of transportation. The marketers want to be sure who will fund that just like they fund the road transportation. PEF is still evaluating the proposal which they were receptive of when it was presented to them.

We hope that before the end of this year, all that should have been resolved (so that we can start evacuation of petroleum products directly via the tank farms). Efforts to get the reaction of some of the major oil marketers captured in the project proved unsuccessful as text messages and emails sent to them were not responded to.
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