HB 22: Nigerian Railway Authority Bill, 2015

Bill Analysis:

SHORT TITLE

Nigeria Railway Authority Bill

OBJECTIVES OF THE BILL

The Bill seeks to:

• promote and regulate the efficient and sustainable development and operation of the railway sector
• facilitate the development of competitive market for services in the railway sector
•  Promote the provisions of safe, reliable and efficient railway services;
• increase the network of railway services and accessibility  to railway infrastructure nationwide;
• encourage and promote private sector, state and local governments participation in the provision of railway infrastructure, operations and services and
• ensure the provision of a conducive environment for the protection of the rights and interests of operators, customers any persons operating in the railway sector.

The Bill seeks to repeal the Nigerian Railway Corporation Act, Cap N129 LFN 2004 and provide for the establishment of the Nigeria Railway Authority to establish the framework for private sector participation in the provision of rail services as well as provide for the regulation of the railway sector

BILL IMPLICATIONS

The Bill when passed would:

• open the rail sector to private sector participation (PSP) including the participation of State and local governments in the provision of railway infrastructure. The extant law does not contemplate private participation in the rail sector and gives the federal government the sole right to fund, operate, expand, and regulate the railway sector.
• facilitate the development of new, modern rail systems.
• provide railway as a safer and cheaper alternative means of transporting passengers, goods and services.
• promote competition in the provision of railway services nationwide.
• facilitate provision of jobs for a millions of unemployed Nigerians. It has been reported that the Nigerian Railway Corporation was once the highest employer of labour and provided jobs for thousands of Nigerians between 1954 and 1975.
• help reduce the already over-stretched road infrastructure.
• encourage Private Sector Participation (PSP). PSP in the rail sector is seen as global best practice. Countries like the UK reported massive gains following introduction of PSP into their rail sector.  Stakeholders believe that private investor funding is crucial because the Federal Government cannot provide the huge capital needed to achieve a modern and efficient rail system for Nigeria. It has been observed that private sector participation in railway operations can bring opportunities for modern and clean technology.
• provide for economic and safety regulation of the sector would fill the regulator’s role.

Pursuant to the proposed separation of the operator and regulator roles of the Authority and the plan for private investors to form the bulk of operators of the rail sector, a regulator for the railway would be needed.

Note: A bill to establish this Commission is before both chambers; while the Commission will be the regulator, the railway authority will be in charge of implementing the country’s national railway policy, railway infrastructural development and rail concessioning. The authority can also be a rail operator but will have to obtain an operating license like other proposed private sector investors

ANY SIMILAR EXISTING BILL

The Nigeria Railway Bill, 2016  (Sponsor, Senator Andy Uba, PDP: Anambra), which was passed on 21st July 2016 by the Senate 

CONTENTS

• Part 1- Application and scope
  • The bill applies to all activities within or associated with the railway sector and to all persons conducting railway and related activities in Nigeria
• Part II- Establishment of the Nigerian Railway Authority.
  • This part establishes the Authority, which shall be a body corporate with perpetual succession and a common seal.
  • Establishes the governing board, appointment and qualification provisions for members of the board.
  •  Provides for tenure and removal of board members, functions of the board, remuneration, allowances etc.
  • Unlike the current Act, the bill provides that the board shall be responsible for the policy formulation for the Authority. This is a marked departure from the current provision, which gives room for board interference in management.
  • Requires that board members shall include persons with not less that 15 years experience in some identified professional fields like railway engineering, transport technology, economics, public administration etc.
• Part III – Management and Staff of the Authority
  • This part establishes the management of the Authority to be headed by a Managing Director (in line with global best practices) who will be responsible for day-to-day management of the Authority.
  • Authorizes the Authority to employ staff and determine conditions for their employment in accordance with Federal Government laws.
• Part IV- Functions of the Authority

Outlines functions of the Authority, which includes:

• Development and expansion of railway infrastructure in accordance with the master plan or revision;
• Ownership and management of all railway infrastructure of the FG subject to the provisions of the Act;
• Supervision and monitoring of implementation of concessions granted by the Authority;
• Acquisition and ownership of land for the purpose of a railway or in connection with any of its obligations under the Act;
• Procurement of funding for investment in railway infrastructure;
• Carrying out research and studies related to railway development and operations.

• Part V- Financial Provisions
  • Provides for funds of the authority, which shall include moneys appropriated to it by government, concession fees, rents, levies, penalties, and other charges from services provided.
  • Other sources of funds include: gifts, loans, and grants, proceeds from sale of assets and other funds that may accrue from time to time.
  • Provides how the funds are to be managed and for what purpose.
  • The Authority is to remit any excess in its revenue to the Consolidated Revenue Fund.
  • Requires that the Authority submit its budget and annual estimates to the Minister of Transport for consideration and presentation to the National Assembly.
  • Also makes accounts and audit provisions i.e. keeping of proper accounts and records, audit and submission of annual reports.
• Part VI – Concessions
  • Deals with the issue of concessions and other private sector participation schemes that the Authority can carry out.
  • Empowers the Authority to grant a concession to any person but subject to the provisions of the Infrastructure Concession Regulatory Commission Act, the Public Procurement Act and such other laws, regulations or guidelines approved by the Federal Government.
  • Allows for transfer of concessions to a third party subject to the approval of the Authority and Minister.
• Part VII – Policy and Regulation of Railway Transport
  • Outlines the role of the minister in administering the railway sector which includes formulating or developing policies for the rail sector, facilitation of international protocols and foreign agreements, declaring of new railway routes etc.
  • While the heading of this part mentions Regulations, the Bill makes no specific mention of a railway regulator or its functions.
    • The Senate Bill fills this gap by establishing the office of the Railway regulator who shall be responsible for the economic and safety regulation of the railway sector. The plan is for the regulator role to be filled by the proposed National Transport Commission.
• Part VIII -  State, FCT and Local Government Railways
  • Opens up the participation of the State, FCT and Local Government (LG) to participation in railway operations and outlines modalities for their participation.
  • Gives State, FCT and LGs powers to construct railway infrastructure within their territory with consent/approval of the Authority.
• Part IX- Service Discontinuation and Public Service Obligations
  • Makes provisions that allow operators recommend discontinuance of service along an unprofitable route. Further provides that the service on such routes may continue if the route provides essential services to the public.
• Part X- Duties and Powers of Railway Operators
  • Contains the duties and powers of operators, which includes duties to provide suitable accommodation for traffic, duty to ensure safety and security, duty to publish tariffs, etc.
• Part XI – Railway Safety
  • Makes provision for safety of railways.
  • Provides for the appointment of an Inspector of Railways whose functions among others include carrying out the safety regulatory functions of the Authority, ensuring compliance with safety standards, carrying out physical inspections, etc.
  • Approval of safety and environmental plan of railway operators etc., issuance and withdrawal of Safety Certificate from operators.
  • The bill provides that the Authority should appoint the Inspector (the Senate bill provides that the regulator should have this power).

• Part XII – Investigation of railway accidents
  • Gives the Authority power to make regulations on railway safety such as environmental and safety standards for construction, manufacture, maintenance of rail infrastructure etc.
    • The Senate bill confers this responsibility on the Railway Regulator and allows it delegate any of its powers to make regulations on safety to a State or Local Government.
  • Creates a railway accident-investigating unit in the Ministry of Transport to be headed by a Railway Accident Investigator with powers to conduct investigations of railway accidents, summon and examine witnesses etc.
  • Further contains conflict of interest provisions for investigators who are prohibited from being any part of the railway business.
    • The Senate Bill confers this power and responsibility for Regulations on railway safety on the Railway regulator.
• Part XIII – Acquisition of Land & Railway works
  • This part deals with the acquisition of land for the construction of rail infrastructure.
  • Gives the Authority powers of access and power to compulsorily acquire land required for construction of railway, subject to the provisions of the Land Use Act.
  • Also makes provision for construction, extension or alteration of a private railway. The interpretation section defines a private railway as “one used exclusively to serve a particular plant, enterprise or industrial firm.”
  • Contains general powers of Railway Operators as well; comprehensively describes activities operators can carry out that are necessary for the construction, maintenance, alteration, repair or generally, operation of the railway- subject to other laws requiring permits as the case may be.
• Part XIV – Offences and Penalties
  • Details offences bordering on endangering safety and operations of railways, trespass, false returns and penalties arising therefrom.
• Part XV – Miscellaneous
  • Contains sundry issues such as maintenance of register by the Authority, exemption from stamp duties, repeal of the Nigerian Railway Corporation Act, transfer of assets and employees of the corporation, interpretation section etc.

CONCLUDING ISSUES

Cross Cutting Issues with the National Transport Commission Bill, 2015

• The passage of the Transport Commission Bill is needed to complement the railway bill otherwise the railway sector would be left with no regulator if the bill is passed as it is.
• The Senate Bill adequately provides for this by vesting the proposed commission wide regulatory powers.
• The National Transport Commission (NTC) is expected to be an independent multi-sector transport industry economic regulator.
• The NTC will create a regulatory framework for the provision of transport facilities and services – particularly, marine, rail and road transport.
• It would be empowered to register transport service providers in these areas and grant licenses to providers.

PENALTY COMPARISON OF BOTH HOUSE AND SENATE BILLS

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