The Phase II of the NNPCL/ Federal Inland Revenue Service Road Infrastructure Tax Credit Scheme has been approved by the Federal Executive Council in Nigeria.
Nigeria’s Minister of Works and Housing, Babatunde Raji Fashola, who disclosed this at a press briefing with all the stakeholders, including NNPC, FIRS and contractors in Abuja, the nation’s capital said that the intervention will ensure cash flow and steady projects completion in the country.
According to him, the introduction of the NNPC Tax Credit Scheme which was inherited from the previous administration, was meant as a strategic partnership with the Private Sector and to ensure the sustainability of funding critical infrastructure in Nigeria.
The Minister noted that the President Muhammadu Buhari led administration has identified alternative sources of funding that would guarantee sustainability from the beginning of the projects to its completion without hitches.
“The Tax Credit Scheme is a policy that we inherited from the previous administration. It was there but it was never used, it was in the life of the present administration that the scheme was given life and because it had an expiration date the Executive Order 7 had to be put in place to enable government use it to address the Kabba-Obajana and “the difficult Apapa-Oworonsoki Roads which is serving the Apapa Port”.
“Of course, the Tax Credit Scheme that we inherited had an expiry date and when we started using it, it was being said that it was made for one company alone. So we had to come out to explain that it was meant for all the companies that have tax credit”
“And when it expired, we looked at some of the limitations of the scheme and we made some recommendations to the President”, the Minister said, adding that one of the recommendations was that, perhaps, the roads should be made more diverse and to be spread out to include all the six geopolitical zones.
Fashola further explained that the tax credit scheme is a new model that encourages partnership with private companies where taxes are paid in advance to enable the government invest in notable projects that would be beneficial to its citizens like what is going on in the road sectors of the economy.
The Minister who also mentioned that the Federal Government which has focused on nine major axis of Nigeria, explained that the A1 – A4 axis of the country covers the Northern part of the country, while the A5 – A9 axis covers the East-West zone of the country.
“The successful completion of all the roads would lead to sustainable mobility for Nigerians.”
“The roads like Akure – Ado –Ekiti and East-West which people have been complaining about would be adequately catered for with the approval of the second phase of the NNPC Tax Credit Scheme,” he added.
Compensation
On payment of compensation, Fashola noted that compensation would not be paid to anyone occupying the government’s right-of-way, saying that the federal government right of way was 5.75 meters on both sides and appealed to members of the communities occupying it to vacate.
Earlier, the Permanent Secretary, represented by the Director Overseeing the Office of the Permanent Secretary, Engineer Folunsho Esan, recalled that in line with the Executive Order 7 in 2019, the phase 1 of NNPC/FIRS Road Infrastructure Tax Credit Scheme was approved on the 27th of October 2021.
He stated that with the completion of Phase 1, the Federal Executive Council (FEC) has also approved phase II of the scheme to fund 44 critical road infrastructures to the tune of N1.96 trillion naira.
Speaking further, Esan said that as it was done with phase I, phase II would be governed by a set of guidelines to be issued to each contractor, adding that there would be a funding intervention agreement to be implemented in addition to the standard condition of the contract governing the execution of the road projects.
“The availability of this new funding window will ensure steady cash flow and a timely completion of projects,” he said
The Director further stated that the NNPC intervention which began in October 2021 with phase I has now occupied the top of the log with a portfolio well in excess of N2.6 trillion naira.
On the part of NNPC, the Group Managing Director who was represented by the Chief Financial Officer of the Corporation, Mr. Umar Ayaji, said the Corporation was motivated by the challenged condition of some of the nation’s roads most of which were the arteries of the company’s operations adding that with the vandalization of the distribution pipelines the company had been forced to use the roads as its channel of distribution of petroleum products nationwide.
He stressed that funding would not be an issue anymore as the Corporation is committed to fully funding phase II.
Mr. Aliyu said “We are committed to setting aside funds for phase II. Funding would not be a problem. What is important to us is that our consultant will need to validate the value for money and the quality of work. We will not compromise the quality and timely completion of work.”
He further assured Nigerians of the availability of fund , saying that “there is no need for excuses. As for us on our part, we are committed and we implore the contractors to do quality work and do it on time so that the road projects can be open for use to Nigerians,” he added.
Thanking the Minister of Works and Housing and other relevant agencies of government, the NNPC Chief Finance Officer said the symbolic presentation of the N621 billion naira was a way of contributing to the Federal Government efforts to give Nigerians befitting road network adding that it was an investment that was being done in compliance to the Executive Order 7 to use the company’s tax credit.
Critical Infrastructure
For his part, the Executive Chairman of the Federal Inland Revenue Services, Mohammed Nami, said the investment in roads was as a result of Executive Order 007, 2019 meant to encourage taxpayers to use company income tax payable by them to fix the nation’s critical infrastructure in exchange for tax credit.
“So, we are appealing to Nigerians to trust Executive order 007 so that government will continue to provide the physical infrastructure that our people need,” he said.
The representative of the indigenous contractors, Isa Muhammed Gerawa, who spoke in the Hausa language, commended the administration of President Mhammadu Buhari for giving equal opportunity to local contractors to execute such contracts.
Mr. Gerawa who described the Minister of Works and Housing , Babatunde Fashola as a hardworking and committed Nigerian under whom many dilapidated Nigerian roads have been fixed and a number of single carriageway now dualised, also commended the present government for raising the budget of the Works Ministry from N18 billion naira in 2015 to over N200 billion naira.
He pointed out that it was a clear commitment of the administrations desire to fix the nation’s road infrastructure for development.
44 Critical Roads
The 44 critical roads, which are major routes for the distribution of petroleum products across the country by the NNPC include, the roads in the North Central totaling 791kilometres which are the dualization of Ilorin-Jebba-Mokwa/Bokani Junction Road Section I: Ilorin-Jebba In Kwara State, dualization of Ilorin-Jebba-Mokwa/Bokani Junction Road Section II: Jebba-Mokwa-Bokani Junction In Kwara/Niger States and dualization of Suleja-Minna Road in Niger State.
Also in the zone are the dualization of Suleja-Minna Road in Niger State Phase II, Reconstruction of Bida-Lambata Road in Niger State, Agaie – Katcha – Baro Road, Emergency Repairs of failed section of Mokwa – Makera – Tegina – Kaduna State Border in Niger State, Minna – Zungeru – Tegina road and Bida – Minna Road.
In the South-South, three roads totaling 81.90 kilometres which are under the scheme include rehabilitation of Odukpani-Itu-Ikot Ekpene Road in Cross River State Section I: Odukpani-Itu Bridge Head in Cross River/Akwa Ibom States, dualization of outstanding portion of Odukpani-ltu-lkot Ekpene, and dualization of Oku-Iboku Power Plant Section of the Odukpani-Itu-Ikot-Ekpene Road in Cross River/Akwa Ibom States.
The roads chosen in the South East, aggregating to122 kilometres, include rehabilitation of Umuahia (Ikwuano)-Ikot Ekpene Road: Umuahia-Umudike in Abia State and the dualization of Aba-Ikot Ekpene Road in Abia/Akwa Ibom States.
In the North East, roads involved total 117 kilometres. They include rehabilitation of Cham-Numan Section of Gombe-Yola Road in Adamawa State, construction of Bali – Serti Road in Taraba State and rehabilitation of Gombe – Biu Road in Gombe/Borno State while in the North West the roads chosen, which aggregate to 283.5kilometres, include Rehabilitation of Outstanding Sections of Gada – Zaima – Zuru – Gamji Road Phase II in Kebbi State and Rehabilitation of Zaria-Funtua-Gusau-Sokoto-
In the South West, roads chosen are rehabilitation and expansion of Lagos-Badagry Expressway (Agbara Junction-Nigeria/Benin Border) in Lagos State and the dualization of Ibadan – Ilorin Road (Route A2) Section II in Oyo State (Oyo – Ogbomosho) which aggregate to 114.00 kilometres.
