Fashola sees opportunities as ICRC certifies federal highway initiative

Babatunde Fashola, minister of Works and Housing, says that beyond infrastructure and assets development, there are also opportunities and economic benefits in the federal government’s Highway Development and Management Initiative (HDMI).

Fashola’s ministry was recently issued Certificate of Compliance by the Infrastructure Concession Regulatory Commission’s (ICRC) to proceed with the implementation of the highway initiative.

As an indigenous Land Value Capture scheme conceived by the ministry to develop Nigeria’s network of federal highway corridors and boost economic development along the Right of Way, HDMI is expected to create thousands of jobs for Nigerians.

“The initiative will open up the highway economy with opportunities in various economic activities, including fabrication of gantries and directional signages with advertising opportunities, towing van operations and auto repair stations, operation of rest areas and emergency services, among others,” Fashola explained.

He added that “when fully operational, road users will enjoy first-class facilities on federal highways with directional signages, well-equipped rest areas, round-the-clock security patrol, and ambulance services for emergencies.”

The minister assured that, with the receipt of the Certificate of Compliance, government would commence officially the procurement process for the highway concessions under the HDMI.

According to him, HDMI would facilitate further development of Nigeria’s federal highway network by bringing in investment to improve efficiency, accountability, and profitable entrepreneurship to the operation, management, and maintenance of all assets within the Right of Way on the highways.

“This initiative has further affirmed federal government’s commitment to infrastructure development funding which has been driven by the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order of 2018, the Presidential Infrastructure Development Fund (PIDF) being managed by the Nigeria Sovereign Investment Authority (NSIA) and the SUKUK Fund,” he disclosed.

He noted that, through such initiatives, the federal government has been leveraging private sector funding and participation in the development of critical infrastructure across the country, pointing out that HDMI was another innovation developed to attract the private sector.

The minister assured that HDMI would deliver a safer and enjoyable travel experience for Nigerian road users as travel time would be shortened, cost reduced and commercial activities stimulated.

“This is an indigenous Land Value Capture scheme conceived by the Ministry to develop Nigeria’s network of federal highway corridors and boost economic development along the Right of Way; it will be executed in two parts—Value Added Concession (VAC) and Unbundled Assets Approval (UAA), the minister disclosed.

Babangida Hussaini, Permanent Secretary at the ministry, explained that the development, expansion, and maintenance of federal highways had increasingly become a herculean task to the government due to dwindling revenues and other compelling public service obligations.

“It is to mitigate this challenge that the ministry has adopted the option of exploring the Public-Private Partnership (PPP) arrangement, which seeks to employ the private sector’s technical competencies, managerial capabilities, and financial resources to salvage the federal roads networks.”

According to him, the PPP arrangement in the management of our highways will bring order, efficiency, accountability, and profitable entrepreneurship to the operation, management, maintenance of all assets within the nation’s right of way.

Earlier, ICRC’s Director-General, represented by Joel Ohtani, who presented the certificate to the minister, said the initiative would enable private sector participation in the management and maintenance of road assets through PPP arrangements.

ICRC is charged with the responsibility of developing guidelines for monitoring contract compliance during construction, operation, and contract termination and supporting MDAs like the Ministry of Works and Housing in achieving such compliance.

Over time, ICRC had collaborated with the Ministry of Works and Housing to implement a cohesive national legal, policy, and regulatory environment that was conducive to private sector investment in Nigeria’s roads and housing projects.

He commended the novel initiative and said that it would create jobs, boost government’s revenue, and speed up Nigeria’s economic recovery, citing the popular Chinese proverb that says, “If you want to grow rich, build a good road first.”