Six private companies to construct 19 federal roads under the Executive Order 7

The Executive Order 007 signed by President Muhammadu Buhari on Friday 25th January, 2019 has given authorisation to six (6) private companies to undertake the construction of nineteen (19) federal roads covering 794.4km across eleven (11) states across the six (6) geo-political zones in the country.

During the signing ceremony Executive Order #7 of 2019 titled, “Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme” at the Council Chamber of the State House Presidential Villa in Abuja, The Minister of Finance, Zainab Ahmed listed the federal roads to be constructed by the six (6) private companies in this first phase of the scheme.

Zainab Ahmed who was full of praises for the initiative behind the Executive Order 007 described the scheme as an outcome of thinking outside-the-box in putting an end to poor road infrastructures in the country by the applications of new techniques to solve the age-long problem of poor road infrastructure in the country.

She stated that this initiative will help in relieving the government of the burden of excessive funding of notable federal roads in the country as the scheme will help to improve on the level of private sector investment in the country’s roads.

She clarified that the Participating investors will use tax credits to reduce corporate taxes payable to government until they recoup the value of their investments in roads and bridges.  She further clarifies the process of operation by the scheme by stating that “Essentially, this scheme will utilise tax expenditures, refundable by way of tax credits, to finance the construction of critical roads infrastructure through a Public Private Partnership mechanism.”

The executive order which was signed by the president according to Zainab Ahmed is in agreement with Sections 5 and 315 of the 1999 Constitution which empowers the president to alter, repeal or otherwise modify existing laws. This is also buttressed by the Companies Income Tax Act which also empowers the president to authorise the exemption from corporate taxation, for certain companies or groups of companies, by way of the issuance of tax credits. This forms the basis of the Executive Order 007 signed by President Muhammadu Buhari of Friday 25, 2019.

According to Zainab Ahmed, the new scheme is borne out the ever-increasing demand for road projects by companies and other corporate sponsors who are willing to deploy their own working capital and financial resources to fund road projects located in the major economic corridors of the country where they have significant businesses and operations.

The six (6) private companies chosen in the pilot phase of the scheme are as follows:

  • China Road and Bridge Corporation Nigeria Limited;
  • Nigeria LNG Limited;
  • Flour Mills of Nigeria Plc;
  • Unilever Nigeria Plc;
  • Lafarge Africa Plc; and
  • Dangote Industries Limited

The nineteen (11) federal roads totalling 794.4km which the six (6) private companies listed above will be investing in across eleven (11) states in the six (6) geo-political zones in the country are as follows:

  • Rehabilitation of Benin City – Asaba Road in Edo State;
  • Construction of Bodo-Bonny Road & Bridges across Opobo Channel in Rivers State;
  • Reconstruction of Apapa-Oshodi-Oworonshoki-Ojota Road in Lagos State;
  • Reconstruction of Sokoto Road in Ogun State;
  • Rehabilitation of Obele-Ilaro-Papalanto-Shagamu Road in Ogun State;
  • Ofeme Community Road Network and Bridges in Abia State;
  • Rehabilitation of Lokoja-Ganaja Road in Kogi State;
  • Construction of AdaviEba-Ikuehi-Obeiba-Obokore Road in Kogi State;
  • Reconstruction of Ekuku-Idoma-Obehira Road in Kogi State;
  • Reconstruction of Obajana-Kabba Road in Kogi State;
  • Reconstruction of Zone Roundabout-House of Assembly Road in Benue State;
  • Reconstruction of Makurdi-Yandev-Gboko Road in Benue State;
  • Reconstruction of Birnin Gwari – Dansadau Road in Kaduna State;
  • Reconstruction of Birnin Gwari Expressway – Road in Kaduna State;
  • Rehabilitation of Nnamdi Azikiwe Expressway / Bypass, in Kaduna State;
  • Rehabilitation of Sharada Road in Kano State;
  • Reconstruction of Bama-Banki Road in Borno State;
  • Reconstruction of Dikwa-GambaruNgala Road in Borno State; and
  • Construction of Ashaka-Bajoga Highway in Gombe State.

According to Zainab Ahmed, “The government is still soliciting for more serious proposals from interested Investors, state governments and others who may wish to take advantage of the scheme to partner with the federal government in investing in roads.” In addition she stated that the intention of the government is to have at least one significant eligible road project underway in every state of the federation within the first year of the operation of this scheme.

She highlighted the process and governance that prospective road projects are to be brought to the attention of the government through the scheme’s management committee which is chaired by the honourable Minister of Finance. Other stakeholders as highlighted by Zainab Ahmed include the Minister of Power, Works and Housing as its Deputy Chairman, and the Permanent Secretary of the Federal Ministry of Finance as its Secretary. Other members of the management committee are drawn from a number of relevant federal Ministries, Departments and Agencies (‘MDAs’). The MDAs which are represented by the committee include:

  • The Office of the Chief of Staff to the President;
  • The Nigeria Sovereign Investment Authority;
  • The National Bureau of Statistics;
  • The Budget Office of the Federation;
  • The Infrastructure Concession Regulatory Commission;
  • The Securities and Exchange Commission;
  • The Nigerian Investment Promotion Commission;
  • The Federal Inland Revenue Service;
  • The Bureau of Public Procurement;
  • The Federal Ministry of Justice;
  • The Federal Ministry of Industry, Trade and Investment;
  • The Federal Ministry of Power, Works and Housing; and
  • The Federal Ministry of Finance.

Zainab Ahmed explained the procedure of operation of the committee by saying that after carefully considering submissions by investors, the management committee will forward the proposals, through the chairman of the committee, to the president and the president based on the provisions of the Executive Order will select the roads eligible for which are them published on the official gazette for public consumption.

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