Mr. Aloga Ogbogo is the Executive Secretary of the Nigerian Association of Road Transport Owners (NARTO). In this exclusive interview speaks on a wide range of transport sector issues with emphasis on the road mode.
Private sector investments in roads has been described as the most viable alternative to manage Nigerian roads. However, there are questions about the legal and regulatory framework for such development. What’s your position on this issue?
Road concession is the way forward for Nigeria because the nation has upto 60,000km of Trunk A roads and it’s difficult for the government to maintain these roads. The budgetary allocation from the government wouldn’t be sufficient to maintain these roads. This explains why some of us have been advocating for private stakeholders to invest in roads and collect tolls to recoup their investments. Alternatively, there could be an establishment of a Private Road Fund. This Fund could be structured in a way that for every litre of fuel, N1 or N2 is set aside for the roads.
Nigeria consumes over 60million litres of fuel daily. The price of petrol is made up of templates; there is the marketers’ margin, transporters margin, NPA’s margin for anchoring the vessel, and other critical stakeholders embedded into the price of each litre of petrol. So, I will suggest that a margin be factored into petroleum pricing for the roads.
Concession will need a legal framework, but has this framework been created? How soon can we achieve it? There would also be a need to have all critical stakeholders from truck owners to road transport regulators, drivers and engineers, among others.
If we leave road construction to the Ministry of Works, the bureaucracy between the legislators and the executives will stall the process. While all these activities are ongoing, the rainy season begins and no proper road construction is done during the rainy season.
There is a need to study all the alternatives in a bid to attain sustainable roads in the country. One might also need to consider how a Private Road Fund will be perceived by the Ministry of Works because it could amount to taking up some of it’s responsibilities.
There is also the over N600billion earmarked by the Nigerian National Petroleum Company (NNPC) Limited for the construction of 21 critical roads. That was why petroleum tanker associations were about to go on strike because of the non-implementation as agreed. So, these are options that could enhance road construction. Bad roads subject trucks to wear and tear, slows down the duration of the journey, causes stress on drivers and this leads to road accidents.
In a bid to minimize drivers’ stress and possible accidents, Nigerian Shippers’ Council (NSC) has been engaging state governments and private investors to set up Vehicle Transit Areas (VTAs). How significant is VTA to road transportation in this country?
VTAs are very important because they will create rest points for the drivers and reduce accidents which result from tiredness. These facilities, which are going to be in the six geo-political zones, will also be another avenue to collate valuable data on vehicular activities around these areas and states. It will also curb the idea of driving at night because drivers can stop at the nearest VTA when it’s night and continue their journey the next morning.
Having just returned from an ECOWAS conference on Axle Load regulations, can you share your observations and how Nigeria could benefit from the right application of this regulation?
This isn’t new in Nigeria because it is something the Ministry of Works is very conversant about. Axle load entails overloading a vehicle to the point that it causes damage to the roads. Axle load as a regulation was assented to by the President Goodluck Jonathan administration but the implementation remains a challenge. There are regulations but the roads in Nigeria are over-stressed because there isn’t a viable multimodal transport system.
Consequently, there is a lot of pressure on the roads. While implementing axle load regulation in Nigeria, there is a need to be pragmatic and also to raise the level of awareness because there isn’t an alternative to road transportation.
For example, over 95% of the distribution of petroleum products in Nigeria is done by roads because of pipeline vandalism and non-utilization of other modes. To get the weight of the axle load there are several components. For a 45,000 MT for a petroleum product, it costs about 37,000 MT for the weight. We are looking at the gross and net and this is quite technical. Since there isn’t another viable mode of transport in Nigeria, there is a need to be careful with the regulation because if it’s too strenuous there will be resistance and scarcity will set in. I’m opposed to whatever will damage the roads, however, we must also begin to ask how much emphasis is paid on standardization during road construction.
Road damage isn’t subject to axle load alone, there are other components especially when standards are compromised in road construction. Another major problem in Nigeria is that markets are close to the road and in some cases, the markets are actually on the roads. Businesses take over the shoulders of the roads which should be for trucks in distress or something.
When we talk about privatizing the roads, what kind of roads should we focus on, port access roads?
We would have to look at the viability and traffic on these roads. It’s not the port access roads alone. There are some roads that are very critical to the distribution of petroleum, agriculture and other trade products, such as; the Port Harcourt/Onitsha, Lagos/Ibadan, Enugu/Onitsha, Kano/Kebbi, etc.
There are some roads that aren’t too viable even though they are Truck A roads. Investing in such roads wouldn’t be a profitable venture.
NARTO recently partnered with the Maritime Worker’s Union of Nigeria (MWUN) as part of efforts to address challenges on Nigerian port access roads and prioritize the welfare of truck drivers. What are your expectations from this union?
It’s important to note that NARTO has a working relationship with the Federal Roads Maintenance Agency (FERMA) and the National Automotive Council. NARTO represents the interests of transporters at the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Nigeria Employers’ Consultative Association (NECA). The association also has a condition of service with the petroleum tanker drivers in its capacity as owners of the tankers. 80% of the articulated trucks in Nigeria are owned by NARTO. So, you see that in all ramifications, NARTO has a critical stake in haulage and mass transit in Nigeria.
The partnership between NARTO and a very essential group like MWUN is to address some challenges that affect both groups. While the trucks belong to NARTO, the workers at the ports are under MWUN. This collaboration would enhance the welfare of our workers especially for those who suffer accidents with temporary injuries, permanent disability or death. There should be insurance to take care of that. We also intend to protect our investment and businesses by ensuring that there are no extortion points on the port corridor.
If the extortion persists, we will address it through the appropriate channels because truck owners suffer the pangs of this extortion. To a large extent, these activities of extortion contribute to the high rate of depletion of trucks in the system. Truck owners can’t break even because of extortion and we are going to address the problem with this partnership with MWUN.
With the persistent devaluation of the naira and forex fluctuations, how do you cope with changing spare parts of trucks that have to be imported?
These are part of the major problems of truck and tanker owners. When you look at the scarcity of petroleum products which is largely attributed to the recent import of adulterated fuel, that’s not the whole truth. I agree that there was adulterated fuel in circulation but it was minimal compared to the volume of consumption. Petroleum Products Pricing Regulatory Agency (PPPRA) which has become Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) used to pay for the transportation of petroleum products.
This activity is regulated by government and not subject to demand and supply forces in the open market. Freight rates by tankers that move these petroleum products are determined by the government and the last review of the pricing was done in 2001. It was reviewed based on the consumption of N190/N200 per litre of gas(diesel). Most of the trucks that move petroleum products utilize gas but the price per litre has moved from N200 to over N400. It’s no longer profitable for any tanker to practice this business, so they parked their vehicles.
Nevertheless, over 90% of the petroleum products in this country are moved via tankers. Scarcity would set in when people have parked their trucks and you don’t need to convince anyone to take that decision because it’s no longer profitable to remain in business. Government is still engaging tanker owners on new pricing templates and until this is done there will be long queues and scarcity of petroleum products.
The movement of petroleum products to the hinterlands in Nigeria is also problematic because you can’t make two trips without having to change tyres. Tyres that used to be sold for N150,000 few years ago are now N300,000 because of foreign exchange. There is also a need to frequently change batteries as the friction from the bad roads makes them hit each other and damage quickly. Other spare parts of trucks have also skyrocketed and part of the problems are attributable to foreign exchange.
It’s also pertinent to note that the road transport sector which plays a major role in transportation in Nigeria has no avenue for loans or other fiscal incentives. Unlike the Bank of Industry (BoI), Bank of Agriculture (BoI), Cabotage Vessel Finance Fund (CVFF), road transport owners have nowhere to run to. There is no tax relief or foreign exchange considerations.
During the COVID-19 pandemic lockdown, the federal government through the Minister of State for Transportation announced an intervention fund for road transport operators. Were members of NARTO able to access that fund?
What happened at that time was that they asked us to submit the names of our drivers and we did. Our drivers got N30,000 each, but if there were no trucks there will be no drivers.
Our trucks were made to standstill because there was little or no demand for petroleum products as people were at home. The arrangement or palliative from the government was just the N30,000 each for drivers. Culled from MMS Plus
