NNPC takes over 21 federal roads, to spend N621.2bn on reconstruction
The Federal Executive Council (FEC) has approved the takeover of 21 federal roads by the Nigerian National Petroleum Corporation (NNPC) for reconstruction.
The approval was given at the council meeting presided over by Vice President Yemi Osinbajo at the presidential villa, Abuja on Wednesday.
Minister of Works and Housing, Babatunde Fashola, who disclosed this while briefing correspondents at the end of the meeting, said the roads totalling 1804.6 kilometres, are spread across the six geopolitical zones of the country.
He explained that it was a strategic intervention under the Federal Government Road Infrastructure and Refreshment Tax Credit Scheme.
According to him, it came under Executive Order 7 that 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 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.
The minister explained: “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 to pass through otherwise the retention of water will badly impact the road.
“As a result of that, we have to revise the scope of works from rehabilitation to construction in order to remove all the old steel drains that are corroded and replace them with concrete drains.
“It is over 75 kilometres 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 Executive Order seven 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 something 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 another player who has shown interest and commitment 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 the 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, the 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 the council has approved today that NNPC deployed tax resources to 21 roads covering the total distance of 1,804.6 kilometres across the six geopolitical zones.
“Out of those 21 roads, nine are in North Central, particularly Niger state. And the reason is that Niger State is a major storage centre 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 northeast. Two in the northwest, two in the southeast, 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-Ogbumosho 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 northwest, 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 21 roads. What will happen as a result of this is that there will be no financing problems regarding the execution of these roads anymore.
“So, some of these roads that I have mentioned, let me tell you, what has changed. For example, Aba-Ikot Ekpene road has an estimate of about N30.33,399 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, the council approved this as strategic funding these roads.”
On the roads taken over by the NNPC, Fashola disclosed that it would cost the corporation about N621.2billion to reconstruct them.
In response to a question on it, he said: “The whole package is N621,237,143,897.75. But this is not a one-off payment. So, let’s be clear, it will be spread over periodic tax over about three years.
“On time frame of completion, the completion time already exists. They have scheduled completion times. What has hobbled them and hampered them, is that the annual budgetary provisions have not been enough. So what is it does now is that government can save, like the PIBF, Lagos-Ibadan, 2nd Niger bridge and all of those type roads.”
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NNPC takes over 21 federal roads, to spend N621.2bn on reconstruction