FG opens bid for concession of 12 critical federal highways, shortlists 11 companies

The Federal Government has opened the bidding process for the concession of some of the federal highways under its Highway Development Management Initiative (HDMI) with 11 companies out of the earlier shortlisted 18 companies coming out successful in the Value-Added Concession (VAC).

The government through the HDMI, which sought to facilitate the development of parts of Nigeria’s 35,000 kilometres of federal highway network by bringing order, efficiency, accountability and profitable entrepreneurship to the operation, management, and maintenance of all assets within the Right of Way, had earmarked 12 strategic routes for concession

According to NAN, the Minister of Works and Housing, Babatunde Fashola, who opened the bidding process at a ceremony in Abuja, on Wednesday, said government was seeking to unlock capital into the nation’s road transport infrastructure assets.

What the Minister of Works and Housing is saying

Fashola, while speaking at the occasion said that the administration of President Muhammadu Buhari, had only N18 billion available to fund road infrastructure across the country when it took over government in 2015.

He said, “The government had raised SUKUK from 2017 to 2021 to spend on 76 roads. We initiated taxes projects scheme which has brought NNPC, Dangote and others to contribute to constructing our roads infrastructure.

‘’We have also innovated and recovered some of our common wealth taken in this country overseas. President Buhari has recovered some of these money and put into presidential infrastructural development fund and that has also expanded the access to roads infrastructure.

“We are now at a very important type of PPP highways access concession where 12 roads I believe are under construction and 17 or 18 are shortlisted entities.’’

He said the scope of the project included the expansion, realignment, rehabilitation and maintenance of existing road pavements, bridges and construction of interchanges and pedestrian crossings.

Construction and operations of tolling facilities; installation of weigh bridges, traffic systems, physical patrol, provision of towing services, among other services.

The minister also called on the procurement unit to ensure that due diligence was observed to enable all companies to be properly certified so that there would not be any hitch in the process.

What the Acting Director-General of ICRC is saying

Speaking at the event, the Acting Director-General, Infrastructure Concession Regulatory Commission (ICRC), Mr Mike Ihiemi, said the agency would continue to provide regulatory guidance for the success of the project to ensure sustainability.

He said, “So that a credible Concessionaires emerge at the end of the exercise. It is worthy to note that the commission reviewed business activities  on the Highway Management Development Initiative (HDMI) which started last year.

“Confirming that the roads are good economically and financially viable and for the project to move to the procurement phase.

“The infrastructural regulatory commission at the end of the procurement phase will review and certify the Full Business Case (FBC) documents to enable the minister secure the approval of the Federal Executive Council.”

What you should know

Recall that on January 29, 2021, the Federal Government said it would receive the Outline Business Case Certificate of Compliance for 12 pilot federal highways billed for concession.
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 had in February 2021, revealed that it is expecting over N1 trillion investments from the private sector for the development and maintenance of the various highways earmarked for concession under the HDMI.
This is as the expected funds from the private investors would reduce the financial burden of maintaining and rehabilitating the concessioned highway roads and free up funds for the Federal Government to meet other obligations.
The HDMI was conceptualised and developed by the Federal Ministry of Works and Housing in collaboration with the Infrastructure Concession Regulatory Commission.
The HDMI is in two phases, the Value Added Concession (VAC) which bid is now open, seeks to concession 12 economically viable road corridors to technically and financially capable private sector forms.

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