FG needs N3trn to fix roads ahead of concession

Council for the Regulation of Engineering in Nigeria (COREN) on Monday disclosed that the sum of N3 trillion is required to address the huge road infrastructural deficit to bring them up to date.

Kasim Ali, COREN President disclosed this in the position paper submitted at the public hearing on the repeal of the Federal Roads Maintenance Agency Act N7 LFN 2002 and to establish the Federal Roads Authority bill, 2016 and National Roads Fund Establishment bill, held at the instance of House Committee on Works, chaired by Toby Okechukwu.

Ali, who expressed support for proposed bills noted that the current institutional framework for the management and funding of roads in Nigeria is outdated and inappropriate and needs to be reformed.

While stressing the need for sustainable funding mechanism of road projects in the country, called for improved autonomy in road management, noted that the “establishment of the National Roads Fund which will be repository for revenues accruing from road-user related charges for financing, development, rehabilitation, maintenance and other activities related to the provision of national roads will promote an effective road management system in Nigeria.”

While speaking, Babatunde Fashola, Minister of Works, Lands and Housing, who applauded the initiative, called for consolidation of the five legislative framework regulating the road sectors into one stressing that multiple of laws and regulatory agencies will discourage investors.

He argued that the proposed legislation should help in improving the ease of doing business in Nigeria by eliminating various bottlenecks that could hamper private sector investment.

Fashola also stressed the need for upward review of the sanctions that will serve as deterrent to violators adding that such sanction should be cheaper to comply rather than cheaper to violate.

The Minister who emphasised the need for National consensus on policies and programmes, warned Politicians to desist from making political statements that could scare investors by revoking concession agreements if their political parties are voted into power.

In his submission, Jonathan Juma, acting Director General of National Institute for Policy and Strategic Studies (NIPSS) disclosed that the sum of $2 billion is required by Federal Government to kick-start a massive rehabilitation of federal roads across the country, as a prelude to the introduction of user charges including toll gates.

To ensure adequate funding of the road sector infrastructure, Juma called for injection of funds either through capital market, pension fund or international sources for road sector development, since a viable means of repayment has been identified.

He explained introduction of the user charges will generate 250,000 workers annually in the construction and allied sector, provide 10,000 jobs in e-ticketing and IT support infrastructure.

In his remarks, Kabiru Gaya, chairman Senate Committee on Works chided Petroleum Product Pricing Regulatory Agency (PPPRA) for failing to remit the five percent pump price levy worth N771 billion accrued since 2007 to government coffer as provided by the FERMA Act which was amended in 2007.

According to him, the sum of N536 billion accrued from Premium Motor Spirit (PMS); N174 billion from AGO were to be shared on the basis of 60% to Federal Road Agency and 40 percent to State Governments for road maintenance.

While reiterating the commitment of the National Assembly towards fast-tracking the passage of the bills, the lawmaker pledged that the Senate and House have resolved to concur with the recommendations of the public hearing when concluded.

Gaya who expressed support for the passage of the bills, disclosed that the Lagos-Ibadan expressway needs N150 billion to be completed while Abuja Kano expressway required N130 billion to be completed, hence the need for private sector funding.

The fund which is expected to be sourced capital market, injected sum of N300 billion is expected to be generated yearly from user charges through commuter contributions and other charges for road maintenance.

In its position paper, Council for the Regulation of Engineering in Nigeria (COREN), noted that the sum of N3 trillion is required to address the huge road infrastructural deficit to bring them up to date.

With the dwindling resources at all levels of government, it is gratifying that the two bills are proposing to establish an alternative way of funding.

On his part, Kyari Bukar, chairman Board of Nigerian Economic Summit Group (NESG) who put the value of Nigerian road assets at N4.57 trillion, lamented that estimated sum of N500 billion is spent yearly on operating cost, 10 hours manhour loss estimated at N1.02 trillion yearly due to the poor conditions of Nigerian roads.

He expressed displeasure over the huge infrastructure deficit, stressed the need for urgent reform of legislations related to infrastructure sector if we must tackle this deficit.

According to him, “the current legislations support a defunct model of delivering infrastructure which restricts its management and investments to the public sector. Clearly, Government has proved to be poor managers and public finances are thinning down.”