The Nigerian Government on Wednesday disclosed plans to reintroduce toll plazas on its roads across the country.
According to Works and Housing Minister Babatunde Fashola, cash transactions will be minimised at the toll plazas, which will be built on at least 10 lanes, He said more land will be acquired for the larger tolls gates.
Speaking at the end of the Federal Executive Council (FEC) meeting, Fashola said no law prohibits tolling in Nigeria, adding that the new toll plazas will be built on Public-Private Partnership (PPP) arrangements.
FEC also approved additional N15.765 billion for Suleja-Minna-Lambata road and Ibadan-Lagere-Ilesa bypass.
The former Lagos State Governor said the Council approved the upward review of the road contracts from the initial rates.
On the 101-kilometre Suleja-Minna-Lambata road, the minister said FEC approved additional N12.6 billion; it granted additional N3.165 billion for the Ibadan-Lagere-Ilesa bypass.
He said: “The first one is the Ibadan-Ilesa bypass 22-kilometre road. The contract was awarded in 2010, but there was no budgetary provision. The rates have become obsolete and the contractor wants a new rate.
“So, that has necessitated a revision of the rates by N3.165 billion. That means the old contract price of N6.7 billion has now moved to N9.8 billion.
“The same is true of the Suleja/Minna/Lambata Road. The entire road is 101 kilometres and it was awarded in two phases.
“The first phase was awarded in 2010 for 40 kilometres. The second phase, covering Kilometre 40 to 101, was awarded in March 2015, but they used the 2010 rates.
“The contractor is at a point where he says those rates are not sustainable. He can’t continue and we have recommended that the revised rates are considered and the Council approved them. It’s a revision by addition of N12.6 billion. So, the contract price moves from N23.6 billion N36.2 billion.
“It is important to emphasise that all of these are in keeping first with the desire and determination to focus on projects that can be completed rather than just starting new projects.
“Also, it is consistent with the realities of economic rates, market price indices for road inputs like cement, iron rods, diesel, petrol, lubricant and the changes that have taken place in the national economic stage between 2010 and now.”
Stressing that no law opposes toll plazas in the country, Fashola said the Federal Government was working on modalities for reintroducing of cashless toll plazas.
He said: “Let me just clarify this impression about toll gates. There is no reason why we cannot toll motorists; there is no reason. There was a policy of the government to abolish tolls, or as it were, dismantle toll plazas. But no law prohibits tolling in Nigeria today.
“We expect to return toll plazas. We have concluded the designs of what they will look like, what materials they will be rebuilt with and what new considerations must go into them.
“What we are looking out for now and trying to conclude is how the backend runs. And that is important because we want to limit significantly, if not eliminate, cash at the plazas while ensuring that electronic devices that are being used do not impede rapid movement.”
Speaking on other logistics, Fashola said: “We are also now faced with the need to acquire more land to establish the width of the toll plazas because I believe we are looking at 10-lane plazas so that there can be more outlets.
“So, we need to acquire more land. That is the work that is currently being done.
“But let me also say that the expectation that the collection of tolls will then produce the replacement cost of the road is perhaps not accurate. This is because the traffic toll count that we have done on major highways does not suggest that there is enough vehicular traffic across all roads.
“The two or three heavy routes are Lagos-Ibadan, Abuja-Kano and Abuja-Lokoja. Now, on the Lagos–Ibadan route, the heaviest traffic you will find is between Lagos and Sagamu in Ogun State. It is about 40,000 vehicles. After Sagamu, heading to Ibadan drops to about 20,000.
“So, most of it has gone eastwards, going towards Ondo and Ore. By the time you get to Benin, the number significantly drops.
“It goes up again at the confluence where they are heading towards the Niger. So, you can see that it is not a static 50,000 all the way; the same thing with Abuja, Kano and Zaria. After Kaduna, the traffic significantly drops.
“It is about 40,000 there too but after Kaduna, it begins to drop by the time you get to Zaria.
“If you have driven to that road before, by the time you are driving between Zaria and Kaduna, you see how thin the recurring number of vehicles you meet is and as you begin to head closer between Kaduna and Abuja, the number of vehicles begins to increase.
“So, I think it is important to have that at the back of your mind, not all roads have those traffic counts,” he stated
He noted that what the government was doing was not accidental but a deliberate and methodical action.
On Public-Private Partnership (PPP), Fashola said: “Let me refer you to the Executive Order 7 that the President signed on a tax credit for infrastructure.
“Essentially, that is another PPP initiative where companies are supposed to invest their money in infrastructure and then recover it from their tax payments.
“What people may not understand is, first of all, the company has to make a profit before it can be taxed.
“So, when you have to build N50 billion highway, how many Nigerian companies are even doing a turnover of N50 billion in the private sector? How many are declaring profits of N50 billion? The tax that you apply on N50 billion profit is 30 per cent. So if you do that, it will be about N15 billion.
“Look at it that way. So, how many companies are in that? A few banks maybe and perhaps Aliko (Dangote, Chairman of Dangote Group) and it is no surprise therefore that the Dangote Group is the one building the Apapa/Oworonsoki Expressway using the tax credit.”