FY plans to collect tolls on 12 highways

… N1.34 trillion of investments and 250,000 jobs are expected to be created
… gets a nod from the ICRC to continue the project

Written by Sony Daniel

In an effort to ensure regular maintenance of its road network across Nigeria, the Federal Ministry of Labor and Housing plans to cede at least 12 federal highways to private entities for management.

The arrangement would allow private companies to introduce toll ramps on 12 highways and collect revenue that would use and regularly maintain such roads.

That information is contained in a document Vanguard received yesterday from the Federal Ministry of Labor and Housing in Abuja.

The twelve motorways to be concessioned under the Highway Management Development Initiative, HMDI, are: Benin-Asaba, Abuja-Lokoja, Kano-Katsina, Onitsha-Owerri, Shagamu-Benin and Abuja-Keffi-Akwanga.

The others are: Kano-Shuari, Potiskum-Damaturu, Lokoja-Benin, Enugu-Port Harcourt, Ilorin-Jebba, Lagos-Ota-Abeokuta and Lagos-Badagry-Seme border.

By the way, the ministry falls under the HDMI pilot phase, which will be managed by selected private sector investors under its value-added concession arrangement (VAC).

The 12 highways, according to a document reviewed by Vanguard, represent only 5.6 percent, or 1,963 kilometers, of the state’s 35,000-kilometer state highway network.

The document estimates that at least N1.34 trillion of private sector investment would flow into highways, while the concession of highways would create no less than 50,000 direct and 200,000 indirect jobs for private operators.

“It’s not really about revenue; it is about the expected injection into the economy. The estimated private sector investment required to develop and maintain the 12 routes is N1.34 trillion and the impact that such investment will have on the economy cannot be overestimated.

“Expected private sector investment will stimulate thousands of jobs for Nigerians as the highway economy revives with federal highways.

It is planned to create at least 50,000 direct jobs and over 200,000 indirect jobs, including construction works, installations, steelmaking, safety, catering, vehicle repairs, waste management and administrative jobs while activating the value chain along the highway. The combined effect of this mini-economy will be a significant boost to our national GDP as productivity and wages increase, ”the ministry boasted.

In addition to the value-added concession, the VAC arrangement, FMWH also plans to use another vehicle known as the Separate Assets Approval Initiative, UAAI, to maximize the use of its assets on highways.

Under this category, the ministry plans to issue permits / permits to individuals to use property on the priority road based on construction, operation and maintenance.

According to the ministry, both VAC and UAAI aim to provide adequate services on the highway through the development of revenue-generating assets along the highway.

“This is key to maintaining the functionality of the highway, as well as to including and creating wealth for indigenous SMEs,” it says.

The ministry explained that it has already received approval from the Infrastructure Concession and Regulatory Commission (ICRC) to continue implementing the HMDI, which includes a highway concession and the right of way for private sector operators.

Explaining the goals of HMDI, the ministry said: “The goal is to develop an ecosystem along the federal highway network by bringing multidimensional resources of skills, manpower, finance, technology and efficiency into national highway management.

“Finally, this domestic initiative will be a lasting solution for the development and management of federal highways by introducing order, responsibility and profitable entrepreneurship into the operation, management and maintenance of Nigerian federal highways of 35,000 km.

“It is expected that the Initiative will be anchored in the engagement of the private sector by granting concessions on economically viable routes to technically and financially capable private companies, through the management and development of priority rights.” The main obstacle to the development and management of highways was the lack of the necessary resources to service the extensive and ever-growing road network. To negate this handicap, FMWH proposes engaging a concessionaire who will manage and develop the advantage of the road, while maximizing its commercial potential.

“The main goal of the Initiative is to attract expertise and sustainable investment / financing in the development of road infrastructure and to maximize the use of property along the Road Route and to develop other furniture for highways,” the ministry pointed out.

According to the document, the government will soon invite bidders in a transparent process to be conducted in co-operation with the ICRC.

It said: “The Federal Ministry of Labor and Housing, in cooperation with the ICRC, will soon announce the bidding process for the Qualification Request (RFQ) for the available categories according to the HDMI scheme.

“The process will be transparent to allow the most efficient bidders to compete vigorously in a process that provides service and dividends to Nigerians. (technically and financially capable companies / consortia).

“We are determined to ensure that our property is entrusted to capable hands. Therefore, stakeholders, companies and groups are consulted

Form consortia of construction / road maintenance companies, financiers, toll operators, rest area operators, advertisers, lane marking experts, waste managers and other partners. “

Some of the revenue-generating and highway-generating assets targeted by the ministry are: Pay stations, wagons, advertising assets, targeted advertising structures and space, street lighting with advertising space and open spaces, including but not limited to truck parks and rest areas . , waste management, towing services, highway supervision and emergency services.

The ministry has made it clear that it is implementing the new initiative because it has a legal framework under the Federal Highway Act, which gives the Minister of Labor and Housing authority over the federal highway network and authorizes him to charge tolls on federal highways.

In addition, the ministry said the Infrastructure Concession Regulatory Commission (ICRC) was prescribed by law under regulatory oversight of ministries, departments and agencies in developing eligible PPP projects, noting that the ICRC worked closely with it on the concept’s initiative.

“The ICRC has just issued a certificate of compliance with the Ministry of Labor and Housing, which means that the Ministry has met all the conditions necessary to continue the next phase of procurement of the HDMI scheme.

“So, we will soon start the pilot phase of the HDMI scheme. In the first phase, the government is proposing a concession for 12 selected federal highways for private sector investors, in line with the value-added concession, the VAC arrangement. ”

Vanguard News Nigeria