The impact of a well-developed transportation system to the economic development of a country cannot be over emphasised, because development of societies, are directly proportional to transportation development.
There are five mode of transportation services commonly used to move passengers, goods and services to places; by air, road, rail, water and pipelines.
The more developed the intermodal system is in a country, the more visible its impact will be in terms of crytalising rapid development.
Looking at the state of Nigeria’s transportation system today, reveals the need for improvement and adoption of modern trends that are apt in promoting economic growths through seamless movement of goods, services and manpower from place to place within the right time frames.
In many of the developed countries, transportation plays a significant role in the ease of doing business.
A number of developed nations however, have boosted their economies through investments in world-class transport systems.
While in Nigeria, we have increasing urbanization and growing traffic demand, adding pressure on its largely inadequate transport systems, yet there seems to be no concrete evidence of steps taken to change the status quo in the country.
This is despite the enormous resources available in the Nigerian transportation sector which is mostly untapped and unexplored.
Akinwunmi Alade, an investment expert said, “governments of most developed countries do not leave the transport sector wholly in the hands of private practitioners, but are strongly involved to effect the necessary regulations and control for optimal performance in providing the required leverage for economic development at the right pricing.”
Noting that public transportation which includes buses, taxis, water ferries, trains, trams, and the metros, are regulated adequately by the government and it is not completely private-sector driven, making it so efficient and reliable.
He stressed that where private companies are involved in the operations, it is usually on an agreed model such as the Public-Private-Partnership, PPP.
In Nigeria however, the unreliability of the transport system has continued to limit access to services, business, trade facilitations, attraction of foreign direct investments and also in the revenue drive of the government.
Akinwunmi, cited Lagos State, the economic centre of Nigeria, where transport operation is largely run informally by private individuals. This makes the services undesirable because of the inefficiencies that exist due to under-regulation.
However, the Lagos State Government throughLAMATA, has taken up the challenge of massive investments in Rail, Road and water Transportation to ease the commuting of its large number of residents.
Amuda Ajikobi, Senior Partner with Macro Investors Handling Company Limited, said, “In the UK, particularly in London, because of government regulation to enhance standards, a mobile application offers most of the information about its public transport system, and regulations in the city, including fares, routes, and time of arrivals and departures.
That means if you must operate, government has to know; this procedure reduces informality. In both UK and UAE, the logistics and business supply chains are effective because they rely on the transportation infrastructures and strict regulations available that helps to reduce the cost of business operations.
For most public transportation, closed-circuit television, CCTV is installed for safety and security businesses.
“Transport cards are also used on most of these public transports for ease of payment; this offers a hassle-free environment for the populace, visitors and tourists. Strict regulations also avail government the opportunity to monitor many of these services, ensure accountability on the part of the operators, and for government to monitor service trends.
This is an indication that individuals move with ease and travel on public transportation because they are timely, affordable, and adequately available,” Ajikobi said.
A well developed transportation infrastructural system is required for a country like Nigeria, if it is in place, businesses can make projections and enjoy a reliable supply chain, whilefulfilling the logic that an effective transportation system would serve as a catalyst for rapid economic growth will be true for the country.
In an article written by Olajimi Ogun of the Firma advisory, he said, “Given constraints such as bureaucratic bottlenecks, population explosions, and a lack of industry and technical expertise within government bodies, can limit a country’ capacity to provide sufficient transportation infrastructure to meet the ever-expanding needs of their citizens, leading to the introduction of Infrastructure financing models such as Public Private Partnerships that aims to meet the identified needs.”
Public-Private Partnerships (PPPs)
Public-private partnerships involve collaboration between a government agency and a private-sector company that can be used to finance, build, and operate projects such as public transportation networks, parks, and convention centres.
Because of their ability to leverage private sector resources, expertise, and efficiency, public-private partnerships (PPPs) have emerged as a preferred infrastructure finance model in Nigeria. PPPs involve the collaboration of the public and private sectors to design, finance, build, and operate infrastructure projects. This model promotes risk-sharing and innovation while reducing the burden on government finances. Let us consider the common types of PPPs available for infrastructure development in Nigeria:
Build-Operate-Transfer (BOT):
A private entity designs, finances, builds, and operates the infrastructure project for a specified period. Ownership is eventually reverted to the government.
Build-Own-Operate (BOO):
In a BOO model, the private entity not only constructs and operates the infrastructure but also owns it for the duration of the project.
Build-Transfer-Operate (BTO):
Similar to BOT, the private entity builds the infrastructure and then transfers ownership to the government. However, the private entity is responsible for running the project for a set period before handing over control to the government.
Rehabilitate-Operate-Transfer (ROT):
A private company is hired to repair an existing infrastructure asset, operate it for a set period, and then return it to the public sector at the end of the concession period.
Benefits of PPPs
Enhanced Efficiency:
Private sector involvement brings efficiency to project management, construction, and operation, ensuring timely completion and improved quality.
Access to Capital:
PPPs attract private sector investments, allowing the government to leverage additional funds without straining public finances.
Risk Sharing:
The private sector shares financial and operational risks, alleviating the burden on the government and taxpayers.
Challenges of PPPs
Complex Legal Framework: Establishing a robust legal and regulatory framework for PPPs requires expertise and time.
Revenue Generation: Sustaining revenue streams to repay private partners and ensure project viability can be challenging, especially for projects in remote areas.
Political and Regulatory Risks: Changes in government policies, regulations, or political instability may impact project continuity and profitability.
Early this year the Nigerian Institute of Transport Technology NITT also disclosed its readiness to partner with young and innovative Nigerians from across the six geopolitical zones in the development of electric cars. seekingsubmissions from inventors in the area of Hybrid cars, Solar Vehicles and Driverless Vehicles. Other areas of partnership are in Vehicle Safety Technology, Activity Key Access and Battery Vehicle Technology.
Below Are Some Existing Joint Ventures & Investment Opportunities In The Transportation Sector
Aviation Sub-Sector
Maintaining Hangars. Existing hangar owned by the airlines needs refurbishment and modern equipment;
Aircraft Engine Workshop – A workshop that can effect A, B, C, & D checks on various grades of aircrafts used in the Country and in the West African sub-region;Development and management of a five-star hotel in Lagos.
Provision of catering equipment and infrastructure to meet the needs of the airline industry; Establishment of a modern aircraft training facility; and Development/construction of airport terminals.
Maritime Sub-Sector
Liner Services – Foreign Shipping Companies can engage in the provision of Liner Services through joint sailing agreement with Nigerian shipping companies; Cabotage – Government encourages joint ventures in the ownership and operation of light vessels between ports, which must be fully registered in Nigeria; Ship Acquisition and Ship Building Fund/Lifting of Crude Oil and Gas;Pollution Control in the Oil Producing Coastal Regions
Search and Rescue – provision of equipment to meet various requirements;
Training /Technical Assistance;
Tanker Trade – joint venture with Nigerians in the exportation of Nigerian crude oil;
Proposed Nigerian Maritime Consultancy Centre – this will cover the following:Marineengineering spare parts supplies;Ships and Port management;Ships, Ports and boat supplies;Seaports, oil terminals and ship communication equipment;Seaports and ships educational material;Combined maritime publications.
Railway
There is need for modernization of the Nigerian Railway System which is still based on the prevailing technology at its inception early in the century, which is the 3” – 6” (1067mm) gauge. These include:Conversion of wagon bearings to roller bearings;Conversion of train braking system from vacuum to air;Conversionof AB coupler to more effective system;Modernization of track maintenance; Improvement of ticketing system; Manpower development and training.
Road Transport
Modern buses equipped with communication system; Trams to facilitate passenger movement in both rural and urban areas; Suitable haulage trucks for goods and services; Service facilities at the terminals on both the highways and destinations; Collection of tolls for the use of the service facilities provided to help sustain the system; Computerization of services to enhance efficiency and control of operations; Commercialization of terminal facilities; Central terminals in various urban and rural locations in the country with service facilities.
National Inland Waterways
Dredging of the River Niger; Rehabilitation of Warri and Lokoja Dockyards, operational vessels, pollution control; Study and Development of River Benue System for all year round navigation; Dredging of Oguta Lake for effective navigation with larger vessels.
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