Nigeria: Govt Eyes 200,000 Jobs From Road Concession Arrangement

23 February 2021

The Federal Ministry of Works and Housing has said that although the main idea behind the new Highway Development and Management Initiative (HDMI) is not to generate revenue, it was expecting about N1.34 trillion in private investments when the full concession of the 12 roads earmarked for the pilot programme takes off.

It said that as part of its statutory requirements in road development, the launch of the scheme, would improve the right of way along the federal road network.

Shedding more light on the initiative, the ministry stated that the programme would be anchored on private sector engagement via concessioning of economically viable routes to technically and financially capable private companies.

In a document released by the ministry, explaining how the scheme would work, it noted that a major hindrance to highway development and management has been a paucity of required funds to service the vast and ever-expanding road network.

"It's not really about revenue, it's about the expected injection into the economy. The estimated private sector investment required for the development and maintenance of the 12 routes is N1.34 trillion and the impact such investment will have on the economy cannot be overstated.

"A minimum 50,000 direct jobs and over 200,000 indirect jobs are envisaged to be created spanning construction works, installations, steel fabrication, security, hospitality, vehicle repairs, waste management and administrative work as the value chain along the highway economy is activated," it said.

To negate the financing handicap, the FMWH said it was proposing the engagement of concessionaires who will manage and develop the right of way, whilst maximising its commercial potential.

"The main objective of the initiative is to attract expertise and sustainable investment/funding in the development of road infrastructure and to maximise the use of assets along the Right of Way and develop other highway infrastructure," it stated.

It added that the objective was to develop an eco-system along the federal highway network by bringing multi-dimensional resources of skills, manpower, finance, technology, and efficiency into the national highway governance.

The ministry, in the document released by the Director of Press and Publicity, at the ministry, Boade Akinola, posited that ultimately, the home-grown initiative would be the lasting solution to the development and management of federal highways by introducing order, accountability and profitable entrepreneurship to the operation, management, and maintenance of Nigeria's 35,000km federal highways.

On how the scheme would be executed, it stated that there are two categories under the HDMI, including the Value-Added Concession initiative (VAC), where the road pavement and entire right of way is concessioned for development and management by the concessionaire and the Unbundled Assets Approvals initiative, (UAA).

Under the UAA, it noted that approvals/permits would be issued for individual assets on the right of way on a build, operate and or maintain basis.

"Both approaches aim to provide adequate highway services through the development of revenue-generating assets along the Highway. This is key to maintaining the functionality of the highway as well as engaging and generating wealth for indigenous small and medium enterprises," it said.

Some of the revenue generating assets and highway service, according to the ministry will include toll-plazas, refuse management, weighbridges, towing services, directional signage structures with advertising space, emergency services, street-lighting with advertising space, among others.

It argued that the highway services would also serve as additional avenues for the promotion of Nigerian local content and the distribution of wealth as this approach breaks down the aspects of highway management, revenue-generating assets, and services.

"Therefore, issues of lack of funding or technical capacity that may otherwise hamper local content involvement are minimised," it stated.

On the legal framework backing the process, the ministry headed by Mr. Tunde Fashola noted that under the Federal Highway Act, the Federal Ministry of Works and Housing has statutory responsibility for federal highway network.

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