Vice President Yemi Osinbajo has in the course of presiding over the Federal Executive Council (FEC) meeting, directed the Nigerian National Petroleum Corporation (NNPC) to take over the reconstruction of 21 federal roads across the six geopolitical zones of the country.
He hinged the decision on the Executive Order No. 007 of 2019 cited as the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019 (‘EO7 of 2019’ or ‘the Scheme’), signed by President Muhammadu Buhari.
In the previous approval, Dangote Group was the first to take advantage of the EO7 of 2019, which saw his firm fixing Obajana-Kabba road from its income tax.
The National Union of Petroleum and Natural Gas Workers (NUPENG) had suspended its earlier planned nationwide strike that was to hold on October 11 to give negotiation a chance, after the NNPC warned that the strike could disrupt fuel supplies.
NUPENG had called the strike to protest the poor state of roads in the country, saying the situation end angers the lives of drivers.
Briefing State House correspondents at the end of the council meeting, the Minister of Works and Housing, Babatunde Fashola, said the selected 21 roads are 1,804.6 kilometers.
The minister said it was a strategic intervention under the Federal Government Road Infrastructure and Refurbishment Tax Credit Scheme.
Fashola further explained that under Executive Order 7, it allows the private sector to deploy in advance the taxes they would pay for infrastructure development.
He said nine of the selected projects are in North-Central, three in North-East, two in North-West, two in South-East, three in South-South, and two in South-West.
Fashola speaking more on council’s approval, said he presented three memoranda to the council that were approved, explaining that two of the memoranda were on road contracts.
He said the first memorandum had to do with a section of Calabar-Ikom-Ogoja road especially the section to Apet Central where he said had a problem with steel reinforced drain that was discovered there.
“Those drains were put there, about 42 years ago and 86 of them have failed and we need to replace them now with concrete rain drains to allow water pass through otherwise the retention of water will badly impact the road.
“As a result of that, we have to revise the scope of work from rehabilitation to construction in order to remove all the old steel drains that are corroded and replaced them with concrete drains.
“It is over 75 kilometers road and that will require an augmentation contract by an additional sum of N12 billion. So that memo was approved.
“The second memorandum relates to the road infrastructure tax credit scheme. You recall the Executive Order 7 signed by Mr. President allowing private sector operators to identify infrastructure such as roads for which you deploy your taxes in advance with tax and pay.
“So you recall that I had briefed you here about the use of that policy like the Dangote Group from Obajana to Kabba, Apapa to Oworoshoki.
“Earlier this year, there were five other roads, the Kaduna Western bypass, the Lekki Port road, the road from Shagamu through Papalanto and a couple of others and there is one road in Maiduguri. That was approved, about N320 billion.
“So today, we have another player. We have all the interested players who are still showing interest but we haven’t concluded. We have an other player who has shown interest and committed to deploy taxes.
“It’s the government corporation known as NNPC. So NNPC has identified 21 roads that it wants to deploy. So now the instructive thing about this is that this initiative helps government to achieve many things, including Ministerial Mandates Three and Four, which we discussed at the last retreat if you recall was energy sufficiency, electric power and petroleum energy distribution across the country.
“Of course, petroleum energy distribution is being impacted positively and negatively, as the case may be the transport infrastructure, which is the Ministerial Mandate Four.
“So, NNPC has sought and council has approved today that NNPC deploy tax resources to 21 roads covering the total distance of 1,804.6 kilometers across the six geopolitical zones.
“Out of those 21 roads, nine areinNorth-Central, particularly Niger State. And the reason is that Niger State is a major storage center for NNPC. So the reason NNPC is doing this is to facilitate the total distribution across the country.
“We have seen and have heard every year Niger State gridlock, the governor complaining that his roads are being damaged by trucks, by those who overload the trucks after damaging the roads themselves now protest the damage that they sometimes have induced. Anyway, this is the final solution to that problem.
“So there are nine like that in North-Central, there are three in the North-East. Two in the North-West, two in the South- East; three roads, the entire Odupani-Itu-Ikot Ekpene road in LOT 1, 2 and 3 now fully covered.
“Then in the South-West, you have the Lagos-Badagry Expressway, the entire junction and you also have the Ibadan to Ilorin in Oyo-Ogbomosho section. So that’s it.
“In the South-East you have Aba-Ikot Ekpene in Abia and Akwa Ibom States. So that’s a major link, then you have Umuahia to Ikwuano to Ikot Ekpene road and so on and so forth. In the North-West, it is Gada-Zaima-Zuru-Gamji road, and also Zaria-Funtau-Gusau- Sokoto road.
“In the North-East, it is Cham-, Bali Serti and Gombe- Biu road. The roads impacted in North-Central include Ilorin- Jebba-Mokwa-Bokani sections I and II, Suleja-Minna sections I and II, Bida-Lambatta, and then Agaie-Katcha-Baro road. Then Mokwa-Makera-Tegina-Kaduna all in Niger State.
“So, as I said, it is a total of a result of this is that there will be no financing problems with regarding the execution of these roads anymore. So, some of these roads that I have men21 roads. What will happen as tioned, let me tell you, what has changed. For example, Aba-Ikot Ekpene road has an estimate of about N30.33 billion to complete it. The provision in the budget this year is only N200 million. If you look at Suleja-Minna road section II, it has N25.763 billion to complete it. The provision in the budget this year is just N100 million. So, with this intervention, all those roads now will be fully funded, we won’t have budgetary challenges and financing challenges. So, council approved this as a strategic funding of these roads.”
Fashola said, “The whole package is N621,237,143,897.75. Let’s be clear, it will be spread over periodic tax for about three years.” On timeframe of completion, the completion time already exist. They have scheduled completion times. What has hobbled and hampered them is that the annual budgetary provisions have not been enough. So, what it does now is that government can save, like the Lagos-Ibadan, 2nd Niger bridge arrangement and all of those types of roads.”
Also briefing, the Minister of Power, Aliyu Abubakar, said he presented three memos which sought approval for the award of contract for design, manufacture, supply, construction of 55 kilometers Agu Akwa Umuchu 132 KVA double circuit transmission line and substation having two transformers, 2 x 60 MVA at Umuchu with 2 x 132 KV line bay extension at Agu Akwa for Transmission Company of Nigeria (TCN).
This, according to the minister, is between Anambra and Enugu states.
He said council approved the contract in favour of Messrs. Cartlark International Limited and has dollar and naira components to finance the project.
“The naira component is N4,044,309,380.69 inclusive of 7.5% VAT and 7.5% contingency payable to the Central Bank of Nigeria at the prevailing exchange rate with the completion period of 34 months. This is part of the expansion and modernisation of the TCN transmission grid and council has approved that.
“The second one was approval for award of contract for a procurement and supply of two ‘Fail Safe’ 60 MVA, 132 /33KV transformers for Transmission Company of Nigeria. They are protecting themselves against fire outbreak.
“They are made in a way that once there is any fire outbreak it will not affect the transformers. So, these are modern equipment that are being procured to replace the old one, this is also part of the modernisation of the equipment on the transmission lines.
“So, the total control sum is N1,018,432,930.68 made up of €1,904,237.50 (offshore component) plus N155,875,000 (onshore component) inclusive of 7.5% VAT, with delivery period of nine months. This was also approved by council.”