Nigeria set to concession major highways

The Minister of Works and Housing, Babatunde Fashola, has said that with the receipt of the Certificate of Compliance, the federal government is to officially commence the procurement process for the highway concessions under the Highway Development and Management Initiative (HDMI).

According to the minister, the HDMI would facilitate further development of Nigeria’s federal highway network by bringing in investment to improve efficiency, accountability, and profitable entrepreneurship to the operation, management, and maintenance of all assets within the Right of Way on the highways.

Mr Fashola said that the initiative has further affirmed the President Muhammadu Buhari administration’s commitment to infrastructure development funding which has been driven by the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order of 2018, the Presidential Infrastructure Development Fund (PIDF) being managed by the Nigeria Sovereign Investment Authority (NSIA) and the SUKUK Fund.

He noted that through such initiatives the federal government has been leveraging private sector funding and participation in the development of critical infrastructure across the country and the HDMI is another innovation developed to attract the private sector.

The minister, who spoke at the official handover of the Certificate of Compliance by ICRC, explained that the HDMI was a fully home-grown idea that would deliver a safer and enjoyable travel experience for Nigerian road users as travel time would be shortened, cost reduced, and commercial activities stimulated.

Explaining further, he said the HDMI is an indigenous Land Value Capture scheme conceived by the ministry to develop Nigeria’s network of federal highway corridors and boost economic development along the Right of Way. He added that it would be executed in two parts comprising Value Added Concession (VAC) and Unbundled Assets Approval (UAA).

On the economic benefits, Mr Fashola said: “Apart from infrastructure and assets development, thousands of jobs will be created for Nigerians as the initiative will open up the highway economy with opportunities in various economic activities including fabrication of gantries and directional signages with advertising opportunities, towing van operations and auto repair stations, operation of rest areas and emergency services, among others.”

Continuing, he said: “When fully operational road users will now enjoy first-class facilities on federal highways with directional signages, well-equipped rest areas, round-the-clock security patrol, and ambulance services for emergencies.”

Mr Fashola appreciated and commended the Infrastructure Concession Regulatory Commission’s (ICRC) diligent appraisal of the initiative and for issuing Certificate of Compliance to the Federal Ministry of Works and Housing to proceed with the Highway Development and Management Initiative (HDMI).

In his welcome address, the Permanent Secretary, Federal Ministry of Works and Housing, Babangida Hussaini, said that the development, expansion, and maintenance of federal highways have increasingly become a herculean task to the government due to dwindling revenues and other compelling public service obligations.

He said: ”It is to mitigate this challenge that the Ministry has adopted the option of exploring the Public-Private Partnership (PPP) arrangement, which seeks to employ the private sector’s technical competencies, managerial capabilities, and financial resources to salvage the federal roads networks.”

According to him, the PPP arrangement in the management of our highways will bring order, efficiency, accountability, and profitable entrepreneurship to the operation, management, maintenance of all assets within the nation’s right of way.

Earlier, the Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah, represented by Joel Ohtani, who presented the certificate to the Minister in Abuja on Friday, January 29, 2021, said that the initiative would enable private sector participation in the management and maintenance of road assets through Public-Private Partnership (PPP) arrangements.

The Infrastructure Concession Regulatory Commission (ICRC) is charged with the responsibility of developing guidelines for monitoring contract compliance during construction, operation, and contract termination and supporting MDAs like the Ministry of Works and Housing in achieving such compliance.
Over time, ICRC had collaborated with the Ministry of Works and Housing, to implement a cohesive national legal, policy, and regulatory environment that was conducive to private sector investment in Nigeria’s roads and housing projects.

He commended the novel initiative and said that it would create jobs, boost the government’s revenue, and speed up Nigeria’s economic recovery, citing the popular Chinese proverb that says, “If you want to grow rich, build a good road first.”

Boade Akinola
Director (Press and Public Relations)
January, 29, 2021