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Friday, December 11, 2020 / 09:49 AM / by FDC Ltd / Header Image Credit: Channels TV
After so many years of talk and
little or no action/results, the Lagos-Ibadan rail-way has commenced commercial
operations 7 ahead of its commissioning in January 2021. The project ($1.6bn)
was one of many that started in 2006 but just like all the other abandoned
projects, lack of funding and commitment remained the dominant issues to its
implementation. The railway has significant implications for the government,
consumers, manufacturers, real estate values and rents.
Implications
Outlook
Scenario 1: Proper Implementation and Maintenance
On the premise that the railway project is well
implemented and maintained over the years, it would be a huge attraction to
investors. It could also increase the IGR of Lagos & Ogun states. There
would be a boost in job opportunities which will in turn taper unemployment and
poverty levels. The value of properties around the rail line is likely to
increase significantly and spur more businesses within the areas. This could
lead to rapid development and improved standard of living.
Scenario 2: Poor Implementation and Maintenance
If this happens, it would just be another addition to
the over 12,000 abandoned projects in Nige-ria. It will douse the expectations
for the project as a means of job creation and improvement to the business
environment. Higher commodity prices, logistics & transport costs and
supply chain disruptions could continue. Investors would remain skeptical and
development in areas around the rail line will slow.
In summary, this project, if well maintained and
managed is an opportunity for the government to boost economic development and
improve the business environment. We therefore advise the government and all
regulatory bodies involved to ensure efficient and effective use and management
of the railway.
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