FGN targets N1trn from PPP as bid opens for concession of 12 highways
Story from Abah ADAH, Abuja
The Federal Government of Nigeria (FGN) has stated that its current approach to funding road infrastructure through Public-Private-Partnership under its Highway Management Development Initiative (HMDI) which is taking off with concession of 12 Highways across the country would “unlock capital in excess of a trillion naira” (N1trn) if the programme succeeds.
Minister of Works and Housing, Babatunde Fashola, disclosed this during a brief Request for Proposal (RFP) Public Bid-Opening Ceremony held at the ministry’s headquarters on Wednesday in Abuja in continuation of the ongoing Value-Added Concession (VAC) Procurement process under the HDMI.
“For me, Nigeria is treading in the right direction, because we are at this point now where we are seeking to unlock capital in excess of possibly a trillion naira if this process succeeds courtesy of our road transport infrastructure assets.
“And that is a good place to be, considering that when we started in 2015, all that was available for road infrastructure in this country was that year’s budget of N18 billion. But we have moved away from there; we have raised SUKUKs from 2017; a 100 billion, we progressed that to now, the fourth SUKUK that was issued was about N210 billion to spend on 66 roads.
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“We have innovated and initiated tax credit scheme, which has brought Dangote, NLNG, NNPC, Bua Group, etc., to put their feet into the water in the quest to construct our road infrastructure,” Fashola said.
It was revealed at the event that 18 out of a total of 75 companies that showed interest and completed the Request for Qualification (RFQ) application made it to the point of applying to take over the 12 roads to be concessioned under HDMI, and eventually, 16 were shortlisted, 11 of which had already completed the RFP.
The 11 firms will be in contention for consideration as the Preferred and Reserve bidders upon further Evaluation by the Evaluation Committee.
The ministry had in 2020 announced the HDMI which contains value-added concessions (VAC) and the unbundled asset approvals (UAA) of the roads, signalling a return of toll gates to Nigeria’s highway as private companies would be responsible for their maintenance and management.
Fashola also noted that the concession is a good way to source funds to maintain the nation’s highways as the federal government continues to face a paucity of funds.
Witnessing the event with the Minister were Minister of State for Works & Housing, Mu’azu Sambo; the Acting DG of the ICRC, Michael Ohiani; the DG of the BPE, Alex Okoh; a representative of the ICPC, members of the HDMI Project Delivery Team.
In a goodwill speech he delivered earlier, the Ag DG of ICRC, Ohiani expressed the commitment of the agency to the success of the process saying: “As a government agency responsible for regulating public-private-partnership, we will continue providing guidance for the success of this project to ensure sustainability so that credible concessionaires emerge at the end of this exercise.
The BPE DG, Mr Okoh, who also expressed his office’s unalloyed support for the initiative, commended the ministry under Fashola for its determination to seek alternative models for providing infrastructure development in Nigeria, congratulating the entire team of the ministry on the achievement of what, according to him, was a major milestone.
The concessionaires will assume the responsibilities to develop and manage their respective highways for an agreed period of time, including the economic rights overall revenue-generating commercial activities from the Highway Economy along the Right of Way.
The close of the RFQ bidding was back in June 2021, and this public bid opening for the RFP is another milestone that can be seen as a sign of the Ministry of Works and Housing’s commitment to ensuring a robust, diligent, and transparent procurement process.
The HDMI Procurement process started on Monday 29th March 2021 with the opening of an e-portal.
