Last month, the articulate and amiable project development specialist re-emerged on the scene with a project, which he insists is related to aviation: The Lagos Cable Car Transit System. In this exclusive interview, the Chief Executive Officer of Ropeways Transport (the company behind the cable car project) gives more insight into the project planned to dove-tail into the existing transport network in the state, with fast, safe and affordable services said to be its strong points.
Between your leaving Aero Contractors and now, what have you been doing?
When I left Aero Contractors in 2007, I actually retired from aviation, and then joined the African Finance Corporation, which provides funding for infrastructure projects, and so on. It is the equivalent to the World Bank, in the African sense. Later, I was back (to the aviation industry) and headed Virgin Nigeria. I ran Virgin Nigeria until the airline was sold in 2010. I exited at that point and continued my retirement from aviation.
After sometime, I set up a financial advisory and project development company. It was a small company that provides financial advisory and project development services. And, of course, the cable car is a logical way to go, because it is a transport at infrastructure project.
But how related are the cable car and the aircraft, apart from both of them being up there in the sky – one flies, the other hangs on a cable.
In many respects, the cable car system is very similar to aviation. One, you are off the ground. Number two, you board the cable car like you board an aircraft. Three, you enter the station like you enter an airport terminal – you undergo security screening and they check your bag, just like what happens at the airport. And in each car cabin, you have a cabin attendant…just like you have cabin crew in an aircraft. The similarities are very, very close. Running a cable car company is very similar to running an airline.
We have heard about the Lagos Cable Car Transit System. Whose original idea is it?
The first idea was conceived by the Managing Director and co-owner of Dopplemayr Seilbahmen, a Swiss-Australian cable car company. Now you might not know it, but that is the company that built the Obudu cable car system. To get to Obudu, a very quiet area, they had to come in through Lagos, from Europe. They had to fly to Lagos, from Lagos to Calabar, and then to Obudu by road. At the time they were entering Lagos, they saw the congestion in the city, and so they could see that there was a market for the cable car here. There is a tourist cable car system and there is also an urban cable car system – both built by them. And they said; “This is the way to go. In a city like Lagos, this would be fantastic.” So, they approached Donald Duke who, of course, was governor of Cross River State when the Obudu Resort cable car system was built, and said; “Why don’t you think about this?” And he told them; “Yeah! This is Cross River, that is Lagos; they are very different. But then he (Duke) approached me, because I specialize in project development, and I said; “Of course, it will work.”
And so, we set about doing the feasibility studies, developing a financial model – just to determine whether this idea was feasible or just an idea. And having done all the studies that one would normally do in a project development, it became quite clear that this is the way to go.
So, what exactly is Cable Car Transit System all about, and what are the benefits to Lagos?
We have been working on this project for a while. Depending on the nature of the project, a typical project development takes three to five years before you do the ‘ground-breaking’, as they say. We have been on this since September, 2010, and it was on Christmas Eve, December 24, 2012, that Governor Babatunde Raji Fashola signed the agreement between the Lagos State Government and Ropeways Transport Limited, which is the holding company, to allow us build the cable car system in Lagos. It is a fully privately-funded project.
That is on the legal framework side. On the development side towards construction, that is the stage we are in now. We are in the process of selecting a civil contractor who will build the stations. Dopplemayr will build the cable car components, because that is their field. The cabins are custom-made in terms of what you require. For instance, in Europe, they will have a heater inside. Here, we don’t need any heating. There, they will not use tinted glasses. Here, we have to introduce tinted glass because of the sunlight. The cabins may not have heat problem here because the journey time is so short, only about four minutes. Those are the considerations. And then, we have security on cabins – we have CCTV (close circuit television), we have video displays, we have passengers address system, all of these have to be built into the cabin, and because we are going to have about 300 cabins, it takes about nine months for them to be made because they are all new. That is the stage we are in now; we have reached an advanced stage.
How will an average Lagos resident take advantage of the system when it starts working?
Why a cable car? It is because it is unique; it is unique to this part of Africa, although we have it in Algeria. But it is unique to Lagos, at least. For the residents of Lagos, it shortens their journey time. For instance, from Apapa where we will have a station, to Adeniji-Adele, eight minutes…and from Adeniji-Adele to Victoria Island, the journey time will be 12 minutes. So, you can see that the cable car shortens people’s journey time from a typical one and a half-hour journey home to 20 minutes, assuming you are living on the mainland, Apapa or Ijora. It shortens your journey time considerably.
That will have huge impact on the health of the people. Remember that the cable car does not produce any pollution. There are no emissions of carbon dioxide and carbon monoxide. No fumes, this is because the cable car does not have power. The power is in the station. Another thing it does is that it creates employment because, at each station, what will happen is that bus operators will create bus-stops nearby, to carry passengers who arrive with the cable car. People are going to borrow money from the banks to buy those buses, on the strength of the cable car system. That creates employment and results in a turnaround in the economy from the financial point of view.
Also, communities within 60 metres radius of the station will see something very beautiful, which will, in turn, make them improve the neighborhood and keep it tidy. Moreover, you are recruiting people from the vicinity, to be security guards, to be the ones selling the tickets or operating one system or another. So, employment opportunities will be created, beyond the direct recruitment of the staff of the company. The cable car will certainly contribute towards the GDP…the employment opportunities are enormous for the economy.
You must have taken into consideration the expected growth of the population of Lagos to about 25 million by 2015.
The thing is that in transport economics, it is very difficult to factor in growth of the population, because the population of some countries of the world is growing by one percent or two percent per annum. Lagos is growing at six percent per annum, which means an additional 1.2 million people every year in Lagos. So, even as you are bringing in more BRT buses, more trains, the population is growing faster than you can actually manage. And as the population grows, vehicular traffic also increases and more vehicles come on the road. So, whatever can be done (is welcome) in this regard, I commend Gov Fashola, because he is not restricting himself to cable car. Anybody who comes with a good idea that can help alleviate the transport problem in Lagos, is welcome to that idea.
There is no doubt that this is a huge project. Where is the funding coming from?
The money is coming from the African Development Bank (ADB). The African Development Bank is the mandated lead-arranger of this project. So, they are mandated to source funding for the project. A lot of it will come from them, but they will also syndicate to other banks internationally and locally.
So, it is a repayable loan?
Yes. It is a repayable loan. And it is the cable car system that will generate the revenue to service the loan?
Yes, the revenue from the ticket sales. And, of course, before you get to the point where the ADB will even finance you, you have to show them the financial module that shows the revenue stream from your ticket sales, How about the cost of the interest on the principal for the duration of the loan period?
So, how difficult was it to convince the bank that the project can repay the loan?
It was not difficult at all. One reason for this was that the DFI for Africa and their mandate is to encourage the growth and development of African countries. And the only way an African country can grow is through infrastructure. When you build roads, bridges and ports, the economy thrives. And so, any project that they see can contribute towards infrastructural development, they are very interested in it. Of course, with road traffic, it is very risky. For example, when you construct a road, you have to toll it if it is privately funded. If it is government, it is different. But, if it is privately-funded, you have to toll it to recover the money you borrowed from the bank. The same thing with this project. We are borrowing money from the bank. So, we have to use our ticket revenue to pay off the loan. They have to be comfortable that this revenue stream will cover the cost. That is why they will have an independent study. So, even if you give them a module that shows you can cover the cost, they will do an independent study by themselves.
Is Capt Olumide acting alone on this project or are there others backing you, but behind the scene?
Capt Olumide is not acting alone; not at all. The main financial from equity side of the project is Dopplemayr. Dopplemayr as a company, is the one who is footing a great portion of the project cost on the equity side. There are also Dr. Yemi Ogunbiyi (former Managing Director of the Daily Times); Prof. Yemi Osibajo (former Attorney-General and Commissioner for Justice, Lagos state) and other directors.
How big a risk is Ropeways taking by embarking on this project?
Do not forget that I am coming from an aviation background. Thirty years in the aviation industry. So, my perception of risk is different from others’. But for me, this is not a risky project, and the best of that is that the bank is lending the money. You know, banks will never lend you money unless they are very sure that they will make something out of it. They are not doing it for charity. They are lending you money, and they want the money back. So this is about population. This is the third largest urban agglomeration of people in the world. Even if you don’t like to go with the cable car from your office to your house, a time will come when you will do it out of frustration, and also to give it a try. And do not forget that the system we are putting in place is not going to carry anybody in Lagos. It is just one for of transport among many other forms of transport. It will have its own niche market, just as BRT has its own, just like the light rail has its own, okada has its own, and danfo too. Everybody has its own niche market. We are not carrying everybody in Lagos.. That is why the bank has no problem with this project at all.
Another issue that is important is security. Have you factored that into the project?
Again, because of my background, I will say that in the airline industry, security is first, and passenger comfort is second. So, we have factored a huge portion of our cost into security equipment and training to ensure the repair and maintainability of these equipment. Also, the quality of the personnel we are going to manage is going to be of international standards. It is going to be an international company, but with local content and they are going to handle the transfer of technology over a five-year period.
So, security is going to be taken care of. For example, in the cabin, we will have CCTV. This means that in the control room and in the station, the operator can see what is going on in every cabin. We also have the control to stop the cabin. In case people are fighting, you can stop it and alert the station where the cabin is coming to and the Police will position themselves waiting for it to get there. It is even better than being on the ground, because you know that those people causing trouble in the cabin cannot be arrested at the other end. And beyond that, we infra-red (electromagnetic communication aided by light). We will be monitoring the towers, we will be monitoring the stations. The environment around the stations is going to be very, very secure.
What about safety? Is it true that you are about 20,000 times likely to have an accident on the road than in the cable car?
Statistically, the cable car is 20,000 times safer than being in a vehicle on the ground. And this is simply because it is above what is called the conflicting traffic modes. In other words, you have rail, road…, you know how you have the railway tracks, and cars are crossing the tracks, and the train hits the car or you have a bus crashing into a car, a car crashing into a motorcycle, or a pedestrian crossing the road and getting knocked down. Imaging enjoying a cable car: there is nothing there except you. From the safety point of view, that is why it is said that you are 20,000 times safer in a cable car.
Can an average civil servant in a place like Isolo, or Surulere, use it every day to his office in Ikoyi, or Victoria Island, and back, without feeling the pain in his pocket?
The pricing structure of the cable car is such that whoever, whatever the size of pocket, he will have a choice. He can say: “I can go on mode ‘A’, transport mode ‘B’ and transport mode ‘C’, for the same amount of money. Which one will I rather use?’ In other words, it is going to be the same fare with other modes of transport. You are not undercutting the market. There is no point doing that, because you can only carry so many people anyway. At the same, you don’t want to be more expensive so that very few can use it. It is just meant to be a typical urban transport system, just another one within this intermodal system in Lagos. Of all the forms of transport, it is just another for of transport.
It appears elitist because nobody has ever seen one here before. That is why it appears elitist, but it is not. It is like aviation. Some people can say even aviation is elitist. Yes, the tickets are expensive. I am not disputing that, but what I am saying is that aviation is available to everybody. You can buy a ticket on-line for less than N10,000, but for that amount you can go from Lagos to Abuja. The cable car is going to be affordable to all people. It has nothing to do with your class or your social background or anything.
Considering that at least, for now, power is still an issue in the country, how are you going to operate the cable cars without being hamstrung by power supply problem?
With any form of transport, the only sure sign of success is reliability. The last thing you want to do is you operate today and stop tomorrow, while operating today, electricity goes off and everyday is stuck there. Of course, we considered all that and everywhere in the word even in developed countries, even in Germany and so on, cable cars operates on generator, so that continuous operation is ensured. So, we will be operating on generators. There will be 1.5 mega watts generator at each station that requires power. We will have multiple generators – one will run in the morning, another one in the evening, to ensure that there is optimum efficiency. We won’t be operating from the grid. It will all be from gas-fired generators in places where you have gas, and diesel in places where you have no gas.
Do you have an idea of how many passengers you will be carrying a day, or in a week, or a month?
We are looking at 250, 000 a day when we start operating. When the system itself is fully operational and every cabin is full from morning till night, we can carry a million per day.
Do you foresee a situation where the patronage is so overwhelming that an expansion becomes necessary?
With the cable car system, you can’t expand. You can have other cable car networks, but you can’t add more cabins. You can adjoin, which is what we will do, because this is just a phase one pilot project. But in terms of being overwhelmed by patronage, the only thing left for you do to is, increase your fare, because if you don’t do that, you will have a situation where you will have queuing. And you don’t want a situation where you have queues, because when you have queues of people waiting to get on any form of transport, it leads to frustration, tempers rise and you can even have pick-pockets and all sorts of things. It could be a very uncomfortable situation to be in. You have been at work all day, and the last thing you want is to be queuing for one hour, for an eight-minute ride. It does not make sense.
So, the only option (you have) is to increase the fares, but I don’t see us getting to that point in the near future.
There is always a feeling among Nigerians that new ideas that have worked elsewhere don’t work here. How confident are you that the cable car system will be successful in Lagos and you won’t get disappointed, may be two years after?
I am confident, because Dopplemayr, the Austrian company that has the technology, is going to be here for 12 years. Don’t forget that they are investors in the project; they are shareholders in our company.
They are the ones bringing the technology and they are going maintain and run it themselves. Of course, they are going to train Nigerians. They are not going to bring a whole in mountain, of people here. But they will remain here supervising it for 12 years, and after the 12 years, we would have had Nigerians that are converted. They are going to go to Austria to be trained and be supervised – just like in the airline industry where I am coming from. We send everybody abroad for training, and when they are back, we have Nigerian engineers and Nigerian pilots. We will maintain it to global standards, because like I said, Dopplemayr will be running it themselves.
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