For the Lagos State rail transport system to run sustainably it must be completely commercialized while the idea of subsidizing rides by the government must be discouraged, the Institute of Directors (IoD) Nigeria said yesterday.
IoD also said the remaining rail lines should be left to private sector investors to develop so that the state can free cash to other sectors of the economy such as health and education.
It’s Director-General, Mr. Dele Alimi, who spoke with The Nation during the announcement of the national corporate governance summit 2022 (NCGS 2022) in Lagos, commended the state government for the bold initiative which he said would attract private investors if properly managed because they will need to recoup their investment and make a profit as well.
Speaking on red and blue rail lines, he said: “It’s a very good project. I really look forward to it starting and being able to be part of it at least in my own lifetime.
“My concern is how are we going to maintain it, how are we going to ensure that it doesn’t break down because the moment you take it once or twice and it breaks down, and it doesn’t give you the service you require, people will go away from it and it’s a huge investment that needs to be recouped.
“So, the government must put in a structure that will ensure that that transport system is run profitably. You cannot sustain such a system on subsidy, it is not sustainable. I know how much people pay for a train ride in London; we know how much people for a train ride in the US; let us not fool ourselves here that it’s going to be a bonus for people …or you want to take the train, we want people to be able to take the train so we will reduce the price. For me, it should be fully commercialized so that it can be sustainable; so that can attract private sector investment.
“On a good day what government really should do is to provide the environment and it is the private sector that should be building those rail but … it needs to start and I commend the Lagos State government for starting, saying it is possible, all the other lines, there are still about four lines, can now be done through complete privates sector involvement and government will not be putting money that is needed for other areas like health, education to now fund that but for me, if you want to make sure it continues, to work, we cannot play subsidy with this, it must be completed professionally and commercially run.”
Source: The Nation
