BusinessDay

FG bets on tolling, private sector for motorable roads

As Nigeria’s Federal Government bets on the private sector to contribute in fixing the country’s road infrastructure challenge, the concept of tolling, through private sector concessions, is also emerging as a top option.

In a published call for expression of interest by the Federal Ministry of Works and Housing (FMW&H), on behalf of the Federal Government, interested companies or consortia were invited to participate in the qualification process for the selection of concessionaires through an international competitive bidding procedure.

“Following approval of the Draft White Paper on Federal Roads and Bridges Tolling Policy, the Federal Government of Nigeria through the FMW&H is desirous of inviting interested firms or consortiums to participate in the combined Request for Qualification and Request for Proposal exercise for the selection of concessionaire to Design, Build Operate and Transfer a central clearing house for toll operations on federal highways, through an international competitive bidding,” the publication read.

The focus of projects to be executed under the public-private scheme includes the expansion, re-alignment, rehabilitation, and maintenance of the existing road pavements and bridges; construction of interchanges and pedestrian crossings; construction and operations of tolling facilities; installation of weighbridges and operations; installation of and operation of intelligent traffic systems for highway remote monitoring; physical patrol of the highway, provision of towing services, ambulance service and refuse management.

“Tolling is a way to generate government finance because toll fees have a way of making revenue flow into the government purse. The first objective will be around revenue creation,” said Olaolu Boboye, head of the macroeconomic and fixed income strategy team at CardinalStone Partners.

The Federal Government plans to grant concessions on 12 pilot federal highways, including those between Benin and Asaba (12km), Abuja and Lokoja (193km), Kano and Kastina (150km), Onitsha and Owerri and Aba (161km), Shagamu and Benin (258km), Kano and Shari (100km), Potiskum and Damaturu (96km), Lokoja and Benin (270km), Enugu and Port Harcourt (200km), Ilorin-Jebba (129km), Lagos-Ota-Abeokuta (80km), and Lagos-Badagry-Seme (99km).

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Babatunde Fashola, minister of works and housing, while briefing journalists following a Federal Executive Council meeting in August 2021, had said: “Tolls will not start until the roads are motorable; there will be agreements that have to be in place; negotiated with the government through the Ministry of Works and Infrastructure Concession Regulatory Commission.”

Fashola presented some of the highlights that would be adopted in the tolling policy. He said an open tolling policy would be adopted as opposed to a closed tolling policy.

A closed toll system means that you pay tolls over the distance you travel and the size of your vehicle. “The difference is that on the open tolling policy which is what we are used to before, you pay toll at a barrier over a fixed or pre-determined distance,” Fashola said.

The plan for the return of tollgates is coming 18 years after former President Olusegun Obasanjo scrapped them in 2004, on the grounds that the process was rife with corruption and generated poor returns.

“It will undoubtedly have an impact on consumer wallets, but the interesting thing is that the government is all out for infrastructure, and people always say that the best time to make policy is when a government is leaving because one can’t hold anyone accountable. But if we keep waiting for the best timing, I don’t think there will ever be one,” Boboye said.

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