FG plans to raise 11,54trn from highway tolls – ICRC

Following the approval of the Federal Executive Council (FEC) for the construction of 1,374 roads across nine corridors in the country,  the Federal government expects to generate N11.54 trillion from Tolls gates in 25 years concession period of the projects.

The FEC on Wednesday, approved the construction and maintenance of nine road corridors under the Highway Development and Management Initiative (HDMI) to be regulated by the Infrastructure Concession Regulatory Commission (ICRC).

The approved road corridors are, Onitsha-Owerri-Aba; Abuja-Keffi-Akwanga; Lagos-Badagry-Seme Border highways among others.

In a statement by ICRC Acting Head of Media and Publicity, Manji Yarling in Abuja on Thursday, the projects :which will utilise the Public Private Partnership Model will generate over N11.54 trillion (N11,543,821,736,086) in the 25 years concession period for the projects”.

According to the statement, the highway development project which was initiated by the Federal Ministry of Works and Housing, originally targets 12 road corridors within which there are 13 routes, adding however that three corridors and one route had yet to reach the FEC approval stage.

“The projects aim to ensure the management and development of the Nigerian Federal Road Network with the ultimate aim of achieving adequate highway services across the entire network through construction, rehabilitation and management of the road pavement in line with the Federal Government economic reform agenda and global best practices.

“The aim of the partnership is to develop and manage the federal road network, thereby supplementing the federal government’s budgetary allocation for infrastructural development”, the statement explained.

It also added that some key objectives of the projects include, leveraging private sector investment to improve facilities and operations on the selected routes, infrastructural development using a commercial approach that bridges funding gaps, maximise the revenue-generating potential of the routes and achieve equity in road charges as overloaded and heavy vehicles which cause more wear and tear on roads can be charged a higher fare.

The statement noted that the routes that were approved include: Benin-Asaba (Route 1), a 125 km road which has been granted concession for a 25 year period and is expected to generate N1,588,774,183,303 (1.58trn) within the period. The concessionaire is Africa Plus Consortium.

Similarly, Route 2 is the 195km Abuja- Lokoja road which also has a 25-year concession period and is expected to generate N1,762,597,600,000 (N1.76trn). The concessionaire is Avia Infrastructure Services Limited (AISL).

Giving a breakdown, the statement pointed out that the 161.2km Onitsha-Owerri-Aba route, which is the 4th route, will generate N706,129,383,000 (N706bn) in the 25-year concession with the private sector investor being Eyimba Economic City Consortium.

Route 5 is the Shagamu – Benin 258km road which also has a concession period of 25 years, with AFC/Mota Engil Consortium as the concessionaire, is expected to generate N2,049,036,914,300 (N2trn).

The Abuja-Keffi-Akwanga 175.9km road is the Route 6 which has gotten approval for a 25 year concession and an expected revenue of N540,568,857,116 (N540bn) within the period. The concessionaire is China Harbour Engineering Company Ltd (CHEC).

The Kano-Shuari 100km road is the first of two routes on this road corridor and is tagged as Route 7A. The concession period for this route is however 27 Years and Dafac Consortium as the concessionaire while expected revenue within the period is N813,463,452,806 (N813bn). The second Route (7B) on this corridor is still undergoing the PPP process.

Route 9 is the Enugu – Port Harcourt 200km road which also has a 25 year concession term and expected revenue is put at N1,154,416,153,000 (N1.15trn) and the concessionaire is Eyimba Economic City Consortium.

Route 11 is the 80km Lagos-Ota-Abeokuta road which is expected to generate N1,575,841,857,561 (N1.57trn) in the 25-year concession period. The concessionaire is Africa Plus Consortium.

The 12th route which was approved by the Executive Council is Lagos-Badagry-Seme Border, a 79km route with a 25-year concession to AFC/Mota Engil Consortium and expected revenue of N1,352,993,335,000 (N1.35trn).

Negotiations on Route 3 which runs through Kano-Katsina and Route 7B: Kano-Maiduguri (Potiskum – Damaturu Axis) are still ongoing.

In the same vein, two other corridors: Route 8, Lokoja-Benin and Route 10, Illorin-Jebba will be re-advertised in the second phase of the HDMI Project procurement process.

“With the approvals, a total revenue generation of N11,543,821,736,086 is targeted. Some other benefits of the project include: job creation, bringing order on the routes, accountability and profitable entrepreneurship to the operations and overall better management and maintenance of federal highways.

“This is consistent with the provisions of the ICRC Establishment Act 2005; National Policy on Public-Private Partnership (“N4P”); Federal Roads and Bridges Tolling Policy of August, 2021 and Federal Highways Act CAP. 135, 1971, which grants the Honourable Minister of Works the power to administer tolls on federal highways.

“The emergent Concessionaires will recoup their investment through the use of road tolls as well as other land value capture infrastructure, inclusive of, but not limited to rest areas, advertisement infrastructure and vehicle towing services”, the statement added.

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