BusinessDay

Inland ports missing in $6.68bn new rail roll-out

The three new inland dry ports in Kano, Katsina and Jos that are expected to begin operations before the end of this year are currently missing in both the proposed $6.68 billion standard rail gauge project inaugurated by the Federal Government and the existing rail network.

The new rail project, signed on May 15, 2018 by the then Minister of Transportation with the China Civil Engineering Construction Corporation, will complete the remaining segments of the Lagos–Kano Standard Gauge Railway, after the first segment, the $1.53 billion Lagos-Ibadan line, was inaugurated last year.

The new track will run from Ibadan-Osogbo-Ilorin (200 km), Osogbo–Ado Ekiti, Ilorin-Minna (270 km), Minna–Abuja, and Kaduna-Kano (305 km).

The development of Inland Container Depot (ICDs), also known as inland dry ports, was aimed at bringing shipping services to the doorstep of shippers, and helping in making the seaports more user-friendly through decongestion.

If the inland ports are not connected to rail, analysts say, cargo evacuation from the seaports to the inland ports would be costly as the cargoes would be transported by road.

Another challenge that may hinder the effectiveness of the three ports is the failure of the government to declare them ports of origin and destination, they said. Without the declaration by the Federal Government, the three ports, when completed, would not be recognised by the United Nations Conference on Trade and Development as ports from which goods can be exported, and to where goods can also be imported.

Read also: Businesses grieve over soaring cost, poor services at inland ports

Emmanuel Jime, executive secretary of the Nigerian Shippers’ Council, the agency promoting the ICDs, said recently in Lagos that developing an inland dry port without declaring such as the port of origin and destination would limit the port’s ability to fulfill its objectives.

According to him, unless designated to be a port of origin and destination, an inland dry port will be simply a port on paper.

“At the moment, there is a challenge limiting these dry ports from fulfilling their core objectives. First is non-declaration as a port of origin and destination. Unless such is done, they are not going to be serving the purpose for which they were established. Our mandate at the Shippers Council is to bring shipping close to all Nigerian shippers wherever they may be located and that was the idea behind the establishment of the inland dry ports in six geopolitical zones,” he said.

Jime said another challenge to the effectiveness of the inland dry ports is the lack of connection to the rail line for ease of cargo evacuation from the seaport.

He said the idea was to replicate the seaport in the hinterland, and a seaport would not be as effective as it should be unless there is connectivity to the hinterland.

“Unless they are also connected, especially to the Nigerian rail line, it would not be cost-effective to move containers from the seaports to the inland ports. This is why we are working with the Nigerian Railway Corporation (NRC) to ensure the inland ports are connected to the rail line and to ease cargo movement. Two of the new inland ports in Kano and Jos now have railway siding,” he said.

While noting that having rail siding to the ports is a fundamental improvement, Jime said only the sidings would not take inland dry ports to where they should be yet.

“Unless we get that connection to where it is possible for a shipper to sit in Kano and get his goods from any port in the world, we cannot say we are where we want to be,” he added.

On the importance of railway linkage, Ahmed Rabiu, managing director of Dala Inland Dry Port in Kano, said the effective connection to rail line would make the inland ports compete favourably with seaports in terms of revenue generation and reduction in loss of containers while in transit from Lagos to Kano.

According to him, rail connection to the inland port will bring down the cost of transporting containers from Lagos to Kano by road from about N1.2 million to not more than N200,000 by rail.

Ismail Yusuf, managing director of Inland Containers Nigeria Limited, said when the NRC resumed container haulage by rail, it helped to reduce cost, saved time for cargo owners, and further ensured the safety of the consignments.

According to him, it costs less than half of what consignees spend on the road to move containers by rail.

Confirming this, Haruna Mustapha, a Kano-based exporter, who recently moved millet from Kano to Lagos port via rail, said he spent almost 50 percent less on haulage to move millets in containers from Kano Railway Station to Lagos port.

BusinessDay understands that three dry ports would go into full operations before the end of this year. First is the over N3 billion Dala Inland Dry Port in Kano with about 20,000 Twenty-foot Equivalent Unit (TEUs) capacity, which now stands at 95 percent completion and is ready for official commissioning as well as the commencement of operations in July 2022.

The second port is the $27 million Funtua Inland Dry Port in Katsina with 10,000 TEUs, built by Equatorial Marine Oil and Gas Ltd., which is at 85 percent completion and would be officially commissioned later in the year.

The third inland port expected to come on stream this year is the 20,000 TEUs Heipang-Jos Inland Dry Port Project, which the Federal Government has concluded plans to hand over to Plateau Investment and Property Development Company to ensure the completion and commissioning of the project later in the year.

Nigeria has other inland ports, including Ibadan Port with 50,000 TEUs and to be built by Catamaran Logistics Ltd; another 50,000 TEUs port in Isiala Ngwa, Abia State to be developed by Eastgate Ltd and another 10,000 TEUs capacity port in Maiduguri, Borno state being developed by Migfo Nigeria Ltd.

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