The federal government has given the Nigerian National Petroleum Company (NNPC) the green light to take over the repairs and reconstruction of 21 critical highways spread across the nation’s six geo-political zones.
This is just as the NNPC has said deregulation of petroleum sector would enable the country save the N12 trillion being spent on subsidy payment in the next four years.
According to the federal government, the 1, 804.6 kilometres-long stretch of roads which would be fixed with a total sum of N621.2 billion over a reviewable three-year period would be executed under the tax relief scheme of the present administration.
The Minister of Works and Housing, Babatunde Fashola, who made these known to journalists yesterday, at the State House, Abuja, after the weekly virtual meeting of the Federal Executive Council (FEC) presided over by the Vice President, Prof. Yemi Osinbajo, declared that six out of the 21 roads were located in Niger State which is known to have one of the worst road networks in the country.
According to him, the intervention by the NNPC was a strategic move under the federal government’s Road Infrastructure and Refreshment Tax Credit Scheme.
He said nine of the benefitting road projects are in north-central, three in north-east, two in the north-west, two in the south-east, three in south-south, and two in south-west.
The minister disclosed that his ministry presented three memoranda to the Council that were approved, explaining that two of the documents 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 works 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,” he added.
Fashola further explained that the second memorandum had to do with the road infrastructure tax credit scheme.
“You recall the 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.
“Also recall that I had briefed you here about the use of that policy like the Dangote Group from Obajana to Kabba, Apapa to Oworoshoki roads
“Earlier this year, there were five other roads, the Kaduna Western bypass, the Lekki Port road, the road from Shagamu through Papalanto and 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 another 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,” he said.
According to him, the “NNPC sought and council has approved today that NNPC deployed 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 are in North 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 complaning 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 southwest, 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 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.”
NNPC: Deregulation to Deliver N12trn Savings to Nigeria in Four Years
Meanwhile, the NNPC has said the deregulation of petrol marketing business in the country would enable the country save N12 trillion subsidy payment in the next four years.
The corporation said the money could be used to carry out some critical social infrastructure projects in strategic sectors of the economy, including roads, hospitals, power generation, amongst others.
Managing Director of the Petroleum Products Marketing Company (PPMC), an arm of the NNPC, Mr. Isiyaku Abdulahi, stated this yesterday in Lagos during his presentation at the ongoing 15th Oil Trading and Logistics (OTC) Africa Downstream Week.
He spoke on the topic, “Nigeria Fuel Congress.”
Isiyaku projected that petrol under-recovery, otherwise known as subsidy, could be N138 per litre when calculated using $80 per barrel oil price, 60 million litres daily consumption and the current official exchange rate of N411 per dollar.
He added that daily petrol under-recovery could be N8.3 billion while annual petrol under-recovery could escalate to N3 trillion.
Noting that the deregulation of the downstream petroleum sector as contained in the Petroleum Industry Act (PIA) would lead to increase investments in the sector and enhanced value to the country, Abdulahi listed some critical social infrastructure projects that could be funded with the subsidy savings.
The projects cut across roads, health, education, housing, and power.
According to him, 7, 500 kilometres (km) of roads could be constructed every year at a cost of 400 billion per km.
He said the money could also help the country to build well equipped 120 bed tertiary health centres across the country, with 37 to be constructed every year at the cost of N82 billion per hospital.
Other projects, which can be carried out with the projected subsidy savings, according to him included building and equipping 2,400 units of 1,000 bed hospitals across the 774 local government areas of the country.
He listed others to include building of 500,000 new houses for families through mortgage at N20 million per house; additional 27,000 megawatts (MW) of solar-powered electricity to the national grid; and educating and skilling up of Nigerians with global standard quality of education and sought-after skills.
Also speaking at the conference, the Group Managing Director of Swift Oil Limited, Mr. Stilian Mitakev, and the immediate past Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, knocked the federal government over its insistence to continue controlling the pricing of petrol despite the deregulation of the downstream sector by the PIA.
Mitakev expressed doubts about the Nigeria petroleum sector witnessing positive changes even with the creation of new agencies to replace the former ones, arguing that the same staff of the scrapped agencies were the same people to man the new ones.
He said, “On the new Act, it is true that DPR, PPPRA and PEF have already been scrapped but the Commission and the Authority will be manned with the staff from the scrapped agencies.
“So, they will be the same people in the new dispensation. Our only hope is that the CEOs of the two new agencies are seasoned professionals and I’m sure they will still try to achieve much better results in their respective fields.”
He said there was need for genuine deregulation and incentives to drive development of refining capacity in all parts of the country especially in the northern.
Mitakev said one of the serious impediments in the development of a truly deregulated market determined by demand and supply forces was scarcity of foreign exchange.