The Federal Ministry of Works and Housing has commenced plans for the concession of no fewer than 12 federal highways to private entities to manage.
This move would allow for regular and adequate maintenance of the road network across the federation as well as create 250,000 jobs and N1.34 trillion revenue in investments.
The concession would enable private-owned companies to introduce toll gates on the 12 highways and collect revenue which they would use and regularly maintain such roads.
The 12 highways to be concessioned under the Ministry’s “Highway Management Development Initiative”, HMDI, are Benin-Asaba, Abuja-Lokoja, Kano-Katsina, Onitsha-Owerri, Shagamu-Benin and Abuja-Keffi-Akwanga.
Others are Kano-Shuari, Potiskum-Damaturu, Lokoja-Benin, Enugu-Port Harcourt, Ilorin-Jebba, Lagos-Ota-Abeokuta and Lagos-Badagry-Seme Border.
According to the ministry, the roads would come under the pilot phase of the HDMI to be managed by selected private sector investors under its Value-Added Concession, VAC, arrangement.
The 12 highways concession would represent 5.6 percent or 1,963 kilometres of the country’s 35,000 km federal highway network which if successfully done, N1.34 trillion of private sector investment would flow into the highways while no fewer than 50,000 direct jobs and 200,000 indirect jobs would be created.
Beyond the Value-Added Concession, VAC arrangement, the FMWH is also planning to use another vehicle known as the Unbundled Assets Approvals initiative, UAAI, to maximize the use of its assets on the highways. Under this category, the ministry plans to issue approvals/permits to individuals to use assets on the right of way on a Build, Operate and or maintainance basis.
According to the ministry, both the VAC and the UAAI aim to provide adequate highway services through the development of revenue-generating assets along the highway.
“This is key to maintaining the functionality of the highway as well as engaging and generating wealth for indigenous small and medium enterprises,” it says.
The ministry explained that it had already obtained the approval of the Infrastructure Concession and Regulatory Commission, ICRC, to go ahead with the implementation of the HMDI which incorporates the concession of the highways and the right of way to private sector operators.
Explaining the objectives of the HMDI, the ministry said: “The objective is to develop an eco-system along with the federal highway network by bringing multi-dimensional resources of skills, manpower, finance, technology, and efficiency into the National Highway governance.
“Ultimately, this home-grown initiative will be the lasting solution to the development and management of federal highways by introducing order, accountability and profitable entrepreneurship to the operation, management, and maintenance of Nigeria’s 35,000 km federal highways.
“The Initiative is expected to be anchored on private sector engagement via concessioning of economically viable routes to technically and financially capable private companies, through the management and development of the right-of-way. A major hindrance to highway development and management has been a paucity of required funds to service the vast and ever-expanding road network. To negate this handicap, the FMWH proposes the engagement of concessionaires who will manage and develop the right of way, whilst maximizing its commercial potential.
“The main objective of the Initiative is to attract expertise and sustainable investment/funding in the development of road infrastructure and to maximize the use of assets along the Right of Way and develop other highway furniture,” the ministry pointed out.
The government would also call for bidders in a transparent process that would be conducted in collaboration with the ICRC. It said: “The Federal Ministry of Works and Housing, in collaboration with the ICRC, will soon advertise the Request for Qualification (RFQ) bidding process for the available categories under the HDMI scheme.
“The process will be transparent to allow the most effective bids to compete vigorously in a process that delivers service and dividend to Nigerians. (technically and financially capable firms/consortiums).
“We are determined to ensure our assets are entrusted into capable hands. Therefore, interested persons, companies and groups are advised to Form consortiums of construction/road maintenance companies, financiers, toll operators, rest house operators, advertising companies, lane marking experts, refuse managers and other partners.”
Some of the revenue-generating assets and highway services being targeted by the ministry are: Toll plazas, weighbridges, advertising assets, directional signage structures and space, street lighting with advertising space and open spaces, including but not limited to truck parks and rest areas, refuse management, towing services, highway monitoring and emergency services.