The Nigerian National Petroleum Corporation (NNPC), Tuesday handed over a symbolic cheque of N621.24 Billion for the rehabilitation of 21 critical roads across the country through the Tax Credit Scheme under the Executive Order 7 signed by President Muhammadu Buhari in 2019.
In his remarks before the brief presentation ceremony at the Conference Room of the Ministry of Works and House Headquarters, Mabushi, the Minister, Mr. Babatunde Fashola, SAN, explained that the Tax Credit Scheme, which, according to him, was inherited from the previous administration, was meant as a strategic partnership with the Private Sector.
The Minister, who said the present administration was currently using it for the construction and rehabilitation of Kabba-Obajana Road in Kogi State and the Apapa-Oworonsoki Road in Lagos, pointed out that contrary to the belief in some quarters that the Scheme was meant for only big companies like the Dangote Group, the scheme was open to all the members of the Private Sector.
Giving the presentation of the cheque as sign of the participation of the NNPC in the Scheme, Fashola pointed out that in order to ensure the inclusion of all segments of the Sector; the Federal Government has further opened a window of participation for smaller companies by asking them to form conglomerates to enable them mobilize enough funding capacity.
“The Tax Credit Scheme is a policy that we inherited from the previous administration. It was there but it was never used”, Fashola said adding that 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”.
The Minister explained further, “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.
According to him, another recommendation was that other companies that have smaller turnover could come together to form conglomerates. He added, “All of these were then factored into the recommendations that were passed to the President which was signed as the Executive Order 7”.
Describing the signing of the cheque as “a big show of confidence by the NNPC”, Fashola expressed delight that contrary to the earlier impression created in some quarters, the scheme was now attracting other sectors of the economy including the manufacturing and telecommunications firms.
The Minister, who said some of the roads had subsisting contracts that were over ten years old, pointed out that the NNPC was not taking over but funding the roads to ensure completion, adding, “One of the things we have done is to ask the contractors that they should not ask for the review of the contracts throughout the duration of the projects”.
“So we are putting in a governance process and that governance process requires us to do certification of their certificates promptly within five days”, the Minister said adding that as soon as the certificates were certified they would be escalated to the NNPC which would be required to pay within 30 days. Also, he said, the staff of the Ministry has certain number of days within which to act to certify the certificates.
The Minister gave assurance that all the unpaid certificates that were in existence before the scheme was approved and all the certificates that budget provisions were inadequate to pay, would be paid as from signing of the contract with the NNPC adding that what it meant was that there would be money to pay the contractors who would in turn pay their suppliers of construction materials in the chain of distribution of wealth across the divide.
He explained that some of the roads like Apapa-Oworonasoki and Obajana-Kabba had no previous contracts in which case those on tax credit scheme were allowed to choose their own contractors while the Ministry still acts as supervisors adding that the difference between them was that the 21 roads which affect the NNPC distribution operations were already under contract.
“So NNPC is not taking over our roads, NNPC is not constructing roads, NNPC is only putting forwards its tax liabilities to fund the roads”, Fashola said reiterating that the roads would have been completed some years back but for insufficiency of funds.
Urging the contractors to go out there and do the best they could to meet the expectations of Nigerians, the Minister said even as the construction companies were shutting down as a result of the yuletide season, the contractors were expected to do more work now when the weather was good for construction.
The Minister called on Nigerians to maintain the speed limit of 100 kilometres as specified by the nation’s traffic laws noting that the season of celebrations would involve a lot of movement of goods and persons across the country.
He added, “As the number of roads we complete are increasing, we are also seeing increasing accidents and the accidents break our hearts. So I am going to appeal to the Media who are here to please help us to carry this message through this Yuletide season that the maximum speed on our highways is 100kilometres, not more”.
According to him, “What it does, if you maintain that speed, is that if there is trouble you will be better able to avoid it”.
Earlier in his remarks before the presentation the representative of the Group Managing Director of the NNPC and Chief Finance Officer of the organization, Mr. Umar Ajiya, 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.
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 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.
The Executive Chairman of the Federal Inland Revenue Service, Mr. Muhammad Nami, in his remarks, 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.
Explaining the process involved in the scheme, the Executive Chairman said the scheme was meant also to support “the fact that there is a social contract between the taxpayers and the government” adding, “What government is using the Executive Order 007 to do is to give value to taxpayers’ money.
“This is unprecedented and very necessary for us to fix the roads in Nigeria”, he said adding that it has become expedient because the annual budgetary allocation for the roads were not only minimal but absolutely insufficient. He said it was most importantly meant to bridge the critical infrastructure gap that the country faces.
The 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-Birnin Kebbi.
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.
The symbolic cheque presentation ceremony was followed by a signing of Funding Intervention Agreement by the NNPC, FIRS, the Ministry of Works and Housing and the Contractors.
Also present at the ceremony were the Permanent Secretary, Mr. Babangida Hussaini, Directors and Special Advisers as well as top officials of the NNPC and the Federal Inland Revenue Service and contractors handling the aforementioned roads.
