The Federal Government has said that private individuals will be allowed to build, operate and maintain assets on some federal highways that are available for concession.
This follows the receipt of the Outline Business Case Certificate of Compliance by the Federal Ministry of Works and Housing, to commence the procurement process for the concession of 12 federal highways.
According to a report by Punch, this forms part of the Highway Development and Management Initiative (HDMI), which is proposed by the Federal Government.
What the HDMI document from the Federal Ministry of Works and Housing is saying
On how the HDMI partnership would be implemented, the document states that the Federal Ministry of Works and Housing said that there were 2 categories namely; Value Added Concession and Unbundled Assets Approvals.
In the Value-Added Concession initiative, the ministry stated that the road pavement and entire right-of-way would be on concession for development and management by the concessionaire.
The ministry stated, “For the Unbundled Assets Approvals initiative, approvals/permits are issued for individual assets on the right-of-way on a build, operate and or maintain basis.’’
This initiative means that individuals would now be granted permission to develop and maintain assets on the economically viable federal highways in order to boost the economic activities on the roads.
The Federal Ministry of Works and Housing stated that the objective of both approaches was to provide adequate highway services through the development of revenue-generating assets along the highways.
The ministry stated, “This is key to maintaining the functionality of the highway as well as engaging and generating wealth for indigenous small and medium enterprises.’’
It further explained that the idea of the HDMI is the involvement and collaboration with the private sector through the concession of economically viable routes to technically and financially capable private companies while adding that it would be through the management and development of the right-of-way.
On how individuals and groups could participate, the federal government advised interested persons, companies and groups to form consortiums of construction/road maintenance companies, financiers, toll operators, rest house operators, advertising companies, lane marking experts, refuse managers, among others.
The government expressed its determination to ensure that its assets were entrusted into capable hands.
What you should know
- It had been earlier reported that the Federal Ministry of Works and Housing had been certified to commence the concession process for 12 pilot federal highways.
- The Infrastructure Concession Regulatory Commission (ICRC) had handed over the certificate to the Minister of Works and Housing, Babatunde Fashola, at the ministry’s headquarters in Abuja.
- The concession of the roads may also signify the return of toll gates as concessionaires are expected to recoup their investments.
- The 12 Federal Highways that were slated for concession in the pilot phase include Benin-Asaba, Abuja-Lokoja, Kano-Katsina, Onitsha-Owerri, Shagamu-Benin and Abuja-Keffi-Akwanga.
- Others are Kano-Shuari and Potiskum-Damaturu, Lokoja-Benin, Enugu-Port Harcourt, Ilorin-Jebba, Lagos-Ota-Abeokuta, and Lagos-Badagry-Seme border.
- The Federal Government has also revealed that it is expecting over N1 trillion investments from the private sector for the development and maintenance of the various highways earmarked for concessioning under the HDMI, which would reduce the financial burden on the government.