Why government mulls tax relief order for private investors on road construction —Fashola

Explaining what he termed the economics of road construction, Minister of Power, Works and Housing, Mr Babatunde Fashola, while speaking at the inaugural lecture organised by BusinessDay Newspaper, recently, stated that infrastructure spending drives the real economy, stimulates production and industrial activity which employs people.

Speaking on the overall benefits of tax relief, Fashola stated that the five-year limit on tax order to a 10-year period to sustain private investment in road infrastructure was a boost, because it is a long-term asset.
Besides, the minister noted that an order for amending individual investment to include groups of individuals was informed by the fact that not all potential investors can individually muster the resources alone but can do so as a group, and recover their pro-rated share. “For example, the order by prescribing fast track processes for MDA approvals to prevent a repeat of the five year’s delay that characterised the Dangote application before this administration finally approved it, has just concluded an agreement using the tax incentive order,” he stated.

According to him, during the implementation of the 2016 budget, about 103 construction companies executing 192 projects were paid, and as a result, employed 17,749 people directly and 52,000 people indirectly in works.

“What this means is that the Economic Recovery and Growth Plan is working. This much the president of the Manufacturers Association attested to when he asserted that this was a plan that had their members’ input.
“It also means that this government can think through, design and implement a programme to change things for the better,” Fashola concluded.

However, he was quick to admit that not everybody had benefited, but that the growth and exit from recession means that hope has been restored, and if Nigerians persevere and persist, the number of people who recovered lost jobs and those who will find new jobs, will gradually increase.

The minister also assured that the process to continue this has commenced with the provision of funding under the 2017 budget in the sum of N90 billion, out of which N47.169Billion has been paid to 62 contractors working on 149 projects to continue works on roads and bridges and keep people at work and sustain production in works.

“Similar payments are being made to supervising consultants and to contractors in Housing and Power Sectors of the Ministry.

On the innovative side of road construction and economics, which he said government is doing, doing, he hinted that government inherited a tax incentive policy for individuals to benefit from tax remission, to recover investment made in public infrastructure like roads, which other members of the public can utilize.

“Apart from the fact that pending applications from Dangote group were not approved by the previous managers of the economy, which the present administration has now approved and work has commenced on 42.9 km of the Obajana – Kabba road, this government has thought it fit to review hand over the Apapa area comprising Creek Road, Liverpool Road, Marine Beach to Mile 2, Oshodi, Oworonshoki to the Lagos end of the Toll Gate on the Ibadan Expressway to Dangote Group for construction using concrete on Tuesday, 12th September 2017.

“We have also just concluded and signed an agreement with NLNG to construct the Bodo – Bonny Bridge at the cost of N120.6 Billion with NLNG and Federal Government sharing the cost 50-50. The contracts were signed on Wednesday, 13th September 2017”, he said, noting that as for the agreement with Dangote, the ministry is now awaiting the design of the 35 kilometre stretch excluding the portion that has been completed, which is about seven kilometres by the previous administration around Mile 2 area.
However, to make the work faster, it was said that from the design, government will determine the cost and the scope of works which is expected to be executed quickly.

“As this government promised, we will solve the Apapa and Port congestion problem. I can only tell you that the solution is now on the way.
“Certainly, no well-meaning and right thinking person can argue that these are not innovative, or that they will not help road construction”..
In addition, Fashola said the Ministry had identified 28 toll plazas out of the numerous ones, on roads where construction work is currently going on, at which there is proposal to restore the toll plazas.

“We have also concluded traffic surveys on 51 major highways and now have current traffic data on these roads and we can project vehicular traffic movement for tolling and concession purposes.
“Besides, we have concluded preliminary designs for the plazas, and we are now looking at how to incorporate technology such as using contact cards, installing fibre optic, using GSM to enable people pay with minimum use of cash”, he said,
In addition to these, he said roads need traffic signs and road furniture like lane marking which they are currently working on.
“Most of the preparatory work and designs have been done in the Ministry by our staff, working in collaboration with the Federal Road Safety Commission (FRSC), to standardize the signs, the sizes, the lettering, the colour and the dimensions of the poles and the procedure for installation”, the Minister said.