FG to commence procurement process for concession of highways

January 29, 2021

The Federal Government (FG) has unfolded plans to commence procurement process for the highway concessions under the Highway Development and Management Initiative (HDMI).

It said the HDMI would facilitate further development of Nigeria’s federal highway network by bringing in investment to improve efficiency, accountability, and profitable entrepreneurship to the operation, management, and maintenance of all assets within the Right of Way on the highways.

The Minister of Works and Housing, Mr Babatunde Fashola, stated this at the official handover of the Certificate of Compliance by ICRC, on Friday, in Abuja.

He said with the Certificate of Compliance, the FG can now officially kick start the process noting that the initiative has further affirmed the current administration’s commitment to infrastructure development funding.

The Minister added that this would be executed in two parts comprising Value Added Concession (VAC) and Unbundled Assets Approval (UAA).

According to him, these developments are driven by initiatives such as the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order of 2018, the Presidential Infrastructure Development Fund (PIDF) being managed by the Nigeria Sovereign Investment Authority (NSIA) and the SUKUK Fund.

He said through such initiatives the FG has leveraged on private sector funding and participation in the development of critical infrastructure across the country adding that the  HDMI is another innovation developed to attract private investors.

In his explanations, Fashola said the  HDMI was a fully home-grown idea that would deliver a safer and enjoyable travel experience for Nigerian road users as travel time would be shortened, cost reduced, and commercial activities stimulated.

“The HDMI is an indigenous Land Value Capture scheme conceived by the Ministry to develop Nigeria’s network of federal highway corridors and boost economic development along the Right of Way,” he said.

On the economic benefits, Mr Fashola said: “Apart from infrastructure and assets development, thousands of jobs will be created for Nigerians as the initiative will open up the highway economy with opportunities in various economic activities including fabrication of gantries and directional signages with advertising opportunities, towing van operations and auto repair stations, operation of rest areas and emergency services, among others.

“ When fully operational road users will now enjoy first-class facilities on federal highways with directional signages, well-equipped rest areas, round-the-clock security patrol, and ambulance services for emergencies.”

In his welcome address the Permanent Secretary, Ministry of Works and Housing, Babangida Hussaini, said the development, expansion and maintenance of federal highways have increasingly become a herculean task to the government due to dwindling revenues and other compelling public service obligations.

He said: ‘’It is to mitigate this challenge that the Ministry has adopted the option of exploring the Public-Private Partnership (PPP) arrangement, which seeks to employ the private sector’s technical competencies, managerial capabilities and financial resources to salvage the federal roads networks.”

According to him, the PPP arrangement in the management of the country’s highways will bring order, efficiency, accountability and profitable entrepreneurship to the operation, management, maintenance of all assets within the nation’s right of way.

Earlier, the Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Engineer Chidi Izuwah, represented by Barr. Joel Micheal Ohiani, who presented the certificate to said that the initiative would enable private sector participation in the management and maintenance of road assets through Public-Private Partnership (PPP) arrangements.


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