The Minister of Works and Housing, Babatunde Fashola, has received the Outline Business Case Certificate of Compliance for 12 federal road corridors for concession by the Infrastructure Concession Regulatory Agency.
Fashola received the document from Michael Ohiari, acting-Director-General, ICRC, at a formal handover ceremony on Friday in Abuja.
According to him, the concession option is another way of financing the construction and maintenance of federal roads, which is also key to the Buhari Administration.
He said: “You must have heard about the road infrastructure tax credit scheme.
“That is being used on the Apapa-Oshodi Road, the Bonny Bridge and a couple of other roads.
“Then we have the Sukuk funding.
“We started with 25 roads and we are now on 45 roads.
“So we are increasing the number of roads but the pool of funds is not growing as such as we would have wanted to use what we want.
“So, now we’re moving to another possible source, which is direct private sector investment, either in constructing, completing and in maintaining our highways, and that’s why we are here.
“So, that is what the Highway Development Management Initiative is really all about.
“How to get more resources, more funding, more capacity into Nigeria’s highway sector.”
The minister added that the government tried to address the issues of sensitivity in ensuring that no part of the country was marginalised, while selecting the 12 routes, taking one or two routes from each geopolitical zone.
Fashola said: “This is an Outline Business Case compliance to show that the business case in the outline is fine.
“So the next stage is that we will go to the Federal Executive Council as we are sharing this information with you, FEC can say go ahead.
“We say this because we need some assurances of support among other departments of the public and private sector, financing issues, and so on and so forth.
“What happens on this route will be a substantial learning code for how to progress to the next phase.
“This is important because it speaks to all of the elements of our economy.”
The Permanent Secretary, FMWH, Babangida Hussaini, in his remarks said the development, expansion and maintenance of federal highways had become increasingly difficult due to dwindling revenues hence the adoption of Public Private Partnership.
Hussaini said: “The PPP, which seeks to employ the private sector’s technical competence, managerial capabilities and financial resources to salvage the federal roads networks, debuting with 12 roads corridor as a pilot.
“This will bring order, efficiency, accountability and profitable entrepreneurship to the operation, management and maintenance of all assets within the nation’s Right of Way.
“The 12 routes for the pilot phase are Benin-Asaba (125km), Abuja-Lokoja (193km); Kano-Katsina (150km); Onitsha-Owerri (161km); Sagamu-Benin (258km) and Abuja-Keffi-Akwanga (122km).
“Others are Kano-Shuari (100km); Patiskum-Damaturu (96.24km); Lokoja-Benin (270km); Enugu-Port Harcourt (200km); Ilorin-Jebba (129km); Lagos-Ota-Abeokuta (80km); and Lagos-Badagry-Seme Border(79km).”
According to him, the 12 highways represent 1,963km and 5.6 per cent of Nigeria’s 35,000km federal highway network.
The estimated private sector investment required for the development and maintenance of these routes is N1.134 trillion.
Hussaini said the Highway Development Management Initiative had both immediate and long-term socio-economic and environmental benefits to the nation beside the generation of 50,000 direct and 200,000 indirect employments.
On his part, Ohiani said the primary objective of the HDMI pilot scheme is to leverage private sector investment to improve facilities and operations on the selected routes.
He said: “Improve Infrastructural development by applying a commercial approach that bridges funding gaps in annual capital budget expenditure appropriation.
“Maximise the revenue generating potential of the routes, achieve equity in road charges, establish government role as investment promoter through the provision of an enabling environment and reduce the dependence on budget allocation.”
Ohiani said in view of the above, the ministry prepared and transmitted the selected routes and after review of the project Outlined Business Cases ICRC found that the routes met the key requirements of ICRC Act hence the handover certificate.
The News Agency of Nigeria reports that the Federal Ministry of Works and Housing in line with the Federal Government Economic Reform Agenda and global best practices established a Public-Private Partnership framework.
This is to allow private partners to tap into the numerous commercial opportunities available along with the 35,000km federal road network.