Nigeria’s adoption of concrete technology in the construction of Federal roads will create new opportunities for the country to expand its cement supply value chain to meet the demand.
It will also create an opportunity for the nation’s manufacturing sector to invest in the local production of equipment needed to adopt and build concrete roads in line with the Federal Government’s new policy that suspends the use of asphalt for the construction of federal roads.
Temitope Runsewe, managing director of Dutum Company Limited, a construction and engineering firm, told our correspondent on the phone that there is an opportunity to increase the supply of cement in the Nigerian market because the country’s current supply capacity will not be sufficient to meet the demand that would come with the implementation of the policy.
He said it would create a gap in Nigeria’s cement supply market, which can be closed if Nigeria can further liberalise the cement industry to increase capacity and have more local production capacity.
He called for the expansion of Nigeria’s cement production capacity to ensure the effective implementation of concrete road construction policy does not end up affecting cement prices.
To tap the opportunities for local industries, Runsewe said the Minister of Works needs to work in partnership with the Minister of Science and Technology to create a policy around the local manufacturing of the equipment needed to drive the new policy and to discourage sole importation of all the equipment, thereby ensuring that the effect of the new policy can spread to more sectors and more entrepreneurs.
He said the initiative of the Minister of Works is very good because concrete roads last longer than asphalt roads even though he agreed that the implementation of the new policy directive will present some challenges for existing road contracts.
According to him, construction companies handling ongoing road contracts for the Federal Government will need to re-scope and redesign the contract to meet the current realities.
Runsewe predicted that the cost implications of changing existing road contracts from asphalts to concrete technology may compel the Ministry of Works to end up concentrating on the major roads while non-major roads may be pushed to a later date because handling all the roads that are currently ongoing might become a daunting task.
“For new roads, the concrete technology can be implemented immediately. The designs and the economies of adopting it are factual and will definitely suggest that concrete roads are more expensive to execute. However, if it lasts longer, Nigeria will discover that it is a lot cheaper to build concrete roads than asphalts over a longer period of time. The capital expenditure for executing a concrete road is more than that of an asphalt road,” Runsewe said.
Runsewe believed that sudden change would come with challenges and opportunities because while the requirement for asphalt would reduce, there would be an increase in demand for cement.
He said Nigeria may not have the technology at the moment but will get it by either importing some of the equipment or spurring local production of some of the equipment.
Recently, David Umahi, the new Minister of Works, directed all contractors handling federal highways to immediately stop using asphalt and adopt concrete technology.
Umahi further directed the contractors to meet with engineers of the ministry to redesign all the ongoing federal road projects in line with the requirements of concrete technology.
BusinessDay understands that some of the ongoing federal road projects that may be suspended as a result of the directive include Benin-Warri dual carriageway and Benin-Sapele sections 1-3 in Delta State, Maraba-Keffi road expansion in Nasarawa State, and Minna-Zungeru-Tegina-Kontagora Road in Niger State.
Others include the Zaria-Funtua-Sokoto-Shema Road in Kaduna State and some parts in Gusau in Zamfara State, Mubi-Maiduguri and Bama-Konduga-Maiduguri Road in Adamawa and Borno states.
Some of the construction companies working on the roads include China Harbour Engineering Company, Gilmour Engineering Nigeria Limited, CBC Global Civil & Building Construction, Setraco Nigeria Limited, Decency Associates Limited, and Zephrygold International Limited.
Others include Levant Construction Company Limited, Geld Construction Company Limited, Triata Nigeria Limited, SKECC Nigeria Limited and Mothercat Nigeria Limited.
Meanwhile, a source close to one of the construction companies, who does not want to be named for lack of authorisation, said that concrete technology is common in countries like America.
He said the nation’s construction industry will adapt to the use of concrete technology because everybody moves in a particular direction when there is a change in policy direction that is backed with the required willpower.
He advised the government to implement the policy strategically and in phases by putting the necessary things in place to ensure it does not sink another part of the economy, particularly the cement industry.
“In Nigeria, cement is currently being used for building houses and by the time we add the demand for road construction, we doubt if people will still have enough cement to buy for the building of houses. Therefore, the government needs to have a robust discussion with the cement manufacturers to expand the industry by bringing more players,” the source suggested.