By Harry Awurumibe, Editor, Abuja Bureau
In an unprecedented way of awards of contract to a single contractor in Nigeria, the Federal Executive Council (FEC) presided over by President Muhammadu Buhari at the Presidential Villa, Abuja, on Wednesday awarded roads construction contracts worth over N300b to Messrs. Dangote Industries Limited.
The award of the contracts to Dangote Group was disclosed by Minister of Works and Housing, Babatunde Raji Fashola who explained that the roads totaling 274.9 kilometres of federal roads was considered under the Federal Government Roads Infrastructure Tax Credit policy.
Fasola who spoke to State House Correspondents shortly after the FEC meeting also revealed that the approval for the award of the contracts was given after the two memoranda he presented were endorsed.
The Minister’s chat went thus: “The Ministry of Works and Housing presented two memoranda. The first was to seek approval to revise the total cost of the contract for the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.
“So, Council considered and approved that request to revise the cost of the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State the module Gomorrah for junction route in a lot of kwara state by N204,411,926.13. So, the original contract sum has been revised from N1.691 billion to N1.896 billion and the completion period is now 12 months.
“The second memorandum presented by the Ministry of Works and Housing was for the construction or the reconstruction, as the case may be, of five road projects in favour of Messrs. Dangote Industries Limited, totaling 274.9 kilometres of federal roads, under the Federal Government Roads Infrastructure Tax Credit policy, which is one of our strategic partnerships with the private sector.
“Those five roads totaling 274.9 kilometres will cost N309,917,717,251.35 to be advanced by the Dangote Industries as tax credit. The roads, specifically, are Bama to Banki in Borno State for N51.016 billion with a 49.153 kilometres; Dikwa to Gamboru-Ngala, 49.577 kilometres in Borno State for N55.504 billion; the Nnamdi Azikiwe Road, popularly known as a Western Bypass in Kaduna, 21.477 kilometres, from Command Junction to Kawu, in the sum of N37.560 billion and the deep seaport access road sections 1 and 3 in Lagos State, through Epe to Shagamu Expressway, 54.24 kilometres, that links Lagos and Ogun states, in the sum of N85.838 billion; the Obele/Ilaro/Papalanto to Shagamu Road, 100 kilometres in Ogun State, in the sum of N79.996 billion.
“Council considered and approved this memorandum, to facilitate the construction of 274 kilometres of concrete roads. So, this will be the largest single award of concrete roads ever undertaken by the government of Nigeria in one award”, Fashola explained.
Asked to explain the circumstances surrounding the award of road construction contracts to Dangote, the former Governor of Lagos state said:
“First of all, the award is consistent with our multiple funding options, which includes engagement with the private sector. Secondly, the tax credit initiative was in existence in the last administration before this government, but was not utilised.
“So, this administration has revised it, expanded it, and has used it to construct roads like the Apapa Wharf Road, the Oworonsoki to Apapa, through Oshodi Road, by the same Dangote Group.
“The Obajana-Kabba Road, still the Dangote Group. The Bodo-Bonny bridges and road, which Council approved last week, through the NLNG. There was also interest by many other companies that are being reviewed so it’s not unique to Dangote. So, he’s the one who has applied and we’ve been in this process. So, this is the next batch of roads that they are taking up.
“They invest their money and then instead of when their taxes come due for payment, they net it off. That’s the circumstance. This is not concessioning, this is tax credit policy, don’t let’s mix them together. The policy says that anybody who wants to invest his personal resources, and it includes individuals, in any infrastructure that the public will have access to, can do so under certain conditions, which includes applying to the Ministry of Works, the ministry evaluates and there’s a tax credit committee chaired by the Minister of Finance because they keep an eye on how much tax giveaway in one year, so that it doesn’t affect government’s revenue performance, once we take on the investment.
“So it’s the committee that then approves and says go ahead, this is good, this is how much tax we’ll allow per year and if the company is satisfied, then we go to BPP and then come to FEC.
“I made this report today to Council and if I can just check my notes just to update you. So, there were three sets of roads initially. The Apapa Wharf Road, which was four kilometres then I think in 2018, four kilometres has been completed 100%. The Obajana-Kabba Road, which was 42.8 kilometres, 40 kilometres of it has been completed so that should finish this year. Then the Apapa-Oworonsoki Expressway, which is 35 kilometres, we finished 29 kilometres and work is going on now on the road towards the Oworonsoki end of the Lagos-Ibadan toll gate. So it’s made substantial impact in providing relief.
“I think I briefed you about Bodo-Bonny last week, because since 1970 something we tried to construct that road, nothing has happened. So about two sets of bridges have been completed, a network of roads are being completed and progress is being made”.