Nigerian Minister of Works and Housing, Babatunde Raji Fashola on Tuesday, revealed that Federal Executive Council has approved Phase II of the NNPC/ FIRS Road Infrastructure Tax Credit Scheme.
Fashola who made this known at a Press briefing Works Ministry Headquarter, Abuja where all the stakeholders, including NNPC, FIRS and contractors were in attendance, said that introduction of the NNPC Tax Credit Scheme will ensure the sustainability of funding critical infrastructure in Nigeria
Recalled that President Muhammadu Buhari approved for the Nigerian National Petroleum Corporation Limited NNPC, to invest N1.9 trillion in reconstruction of 44 federal roads under the tax credit policy.
According to the statement released after the meeting on January 18, 2023, stated futher that the Council approved the proposal under the Ministry of Works and Housing for reconstruction of 44 proposed federal roads with a total length of 4,554 kilometres in the total sum of N1.9 trillion.
Works Minister in his remarks today, noted that contrary to inadequate funding of infrastructure experienced under past govts, the President Buhari’s adminstration, identified alternative sources of funding that could guarantee sustainability from the beginning of the projects to its completion without hitches.
Accordingly, he 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.
Fashola 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 Northern part of the country, while the A5 – A9 axis covers the East-West zone of the country.
He explained that 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”, the Minister said.
On payment of compensation, Fashola noted that compensation would not be paid to anyone occupying 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, in his introductory remarks, 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 (2019) approved phase 1 of NNPC/FIRS Road Infrastructure Tax Credit Scheme on the 27th of October 2021.
Esan 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.
He spoke further 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 projects.
He said: “The availability of this new funding window will ensure steady cash flow and a timely completion of projects.”
He also 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.
On the part of NNPC, the Group Managing Director who was represented by the Chief Financial Officer of the Corporation, Umar Aliya said that funding would not be an issue anymore as the Corporation is committed to fully funding phase II.
He 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.“
The NNPC MD further assured 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,”
On his part, Executive Chairman of the Federal Inland Revenue Services, Mohammed Nami, commended NNPC for the intervention as well as the contractors for the quality of the job done in phase I of the scheme and assured that the NNPC has the capacity to fund the phase II of the scheme.
He explained that most of the roads captured by Executive Order 7 to be executed by NNPC were mostly road projects inherited by the administration of Muhammadu Buhari and they are being fixed by the present administration through the taxes paid by Nigerians
“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.
He 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
Gerawa also commended the present government for raising the budget of the Works Ministry from N18bn in 2015 to over N200bn, pointing out that it was a clear commitment of the administrations desire to fix the nation’s road infrastructure for development.
