Sunday, March 22, 2009

Transport - Private Sector Participation

The use of the term Private Sector Participation (PSP) is now widespread within all tiers of Nigerian government. Government officials are always quick to defer to the private sector following their failure, which is sometimes is due to endemic corrupt practices. It is generally agreed that the private sector are better managers of certain infrastructure and services. However, their participation in delivery of infrastructure and services, should not absolve the state from its statutory responsibilities. A forward thinking government needs to have a clear vision. It must strive to create an environment that will encourage private sector investment, through appropriate regulations and policies.

While surfing the internet, I came across a trade and investment website ( The purpose of the website is to showcase investment opportunities in Nigeria. Investment opportunities in all sectors of the economy from retail to oil/gas are list on the site. While on the site, I searched for opportunities in the transport sector. However, I was totally disappointed with the type transport investment opportunities listed on the site. Can you imagine a state government, calling for 'expressions of interest' from private investors interested in operating bus services (!)?

It is very disappointing that most of our state executives lack innovative ideas. Don’t get me wrong, the bus service industry in the Nigeria needs serious investment. The industry is dominated by large proportion of single vehicle owner-operators. Some of the buses are so shabby that you need to have a take out a life insurance prior to travel. There are no policies that regulate how private buses are used for commuter transport. These vehicles are not subject to any form of safety or maintenance check. To make matters worse, the National Union Road Transport Workers (NURTW) is seen as more powerful than the government. The NURTW is a big stakeholder in the nation’s electoral process; because it is the umbrella association for political thugs and ‘area boys’.

These issues beg the question of how state government will attract the private sector in operation of bus service. The major public transport operators such National Express, Stagecoach etc of this world, will never attempt to invest in the current environment of totally deregulated market. I have always said that public transport cannot operate efficiently in a totally deregulated market. The government still needs to have policies that will regulate activities of operators, and not just creating a ‘free for all’ environment.

From an overseas perspective, provision of bus services in the England is ‘unregulated’ except for London. The deregulation only means that the local government (as it is the case), are not responsible for funding or operation of bus services, except services that are considered to be ‘socially necessary’. Planning and operation of bus services is entirely in the control of the private sector. However private bus operators are required by UK legislation to give 40 days notice to the Traffic Commissioner prior to commencement of their bus operation. Also, they are required to give 28 days notice prior to suspension/cancellation of bus services. The Traffic Commissioner is also responsible for licensing public carriage vehicle, and he must ensure that they meet minimum safety standards.

However in Nigeria, Joe Bloggs can purchase a bus tomorrow and start operating it from point A to B. He doesn’t need to notify anybody about his operation. Nobody is interested to know whether his vehicle meets any sort of safety standard. As a bus driver, he doesn’t need to undertake any test to assess his competency and mental stability.

The Lagos state government was able to deal with this challenge through effective traffic management in its Bus Rapid Transit scheme. The state government prevented the rickety ‘danfo’ and ‘molue’ buses from using the segregated busway. Road transport union members whose buses meet set criteria were also encouraged to travel on the BRT lane. For me, this is a step in the right direction, in the absence of proper legislation to regulate mainstream private bus operators. And unlike other state government, the Lagos State Metropolitan Transport Authority (LAMATA) has a set vision. Continuity and stability within the organisation as also demonstrated that a lot can be achieved with proper planning and professionalism.

In view of these challenges, I will suggest that the first practical exercise will be for the state government to undertake studies that will identify existing transport problems, some of which are institutional as I have mentioned. This would reinforce the need for an integrated transport vision. Current stakeholders in the industry such as transport unions should be made to buy into such a vision. Our leaders need to think beyond short term policies or projects which only provide opportunity for them to cut ribbons but serve no public benefit.

Without implementation of appropriate policies that will ensure a sustainable transport framework, private sector participation in the transport industry will only remain a dream.

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