Nigeria Approves $755m Road Contract for Dangote as Tax Credit

Nigeria’s federal government on Wednesday gave the go-ahead for the award of a contract to Dangote Group for the construction of five roads totalling 274.9 kilometres at the estimated cost of N309,917,717,251.35 (about $755m) to be advanced by the company as a tax credit.

This is just as the government also formalised the Police Special Service in the interest of transparency and accountability while approving N8.6 billion to the Ministry of Health for the procurement of HIV/AIDS kits.

Briefing reporters at the end of the Federal Executive Council (FEC) meeting, presided over by President Muhammadu Buhari at the State House, Abuja, Minister of Works and Housing, Mr. Babatunde Fashola (SAN), said the road contract would be executed on concrete and will be the larger of such project in the country.

“The second memorandum presented by the Ministry of Works and Housing was for the construction or the reconstruction, as the case may be, of five road projects in favour of Messrs. Dangote Industries Limited, totaling 274.9 kilometres of federal roads, under the Federal Government Roads Infrastructure Tax Credit policy.

Those five roads, totalling 274.9 kilometres, will cost N309,917,717,251.35 to be advanced by the Dangote Industries as a tax credit, he stated.

Fashola said: “The roads, specifically, are Bama to Banki in Borno State for N51.016 billion with 49.153 kilometres; Dikwa to Gamboru-Ngala, 49.577 kilometres in Borno State for N55.504 billion; the Nnamdi Azikiwe Road, popularly known as a Western Bypass in Kaduna, 21.477 kilometres, from Command Junction to Kawu, in the sum of N37.560 billion and the deep seaport access road sections 1 and 3 in Lagos State, through Epe to Shagamu Expressway, 54.24 kilometres, that links Lagos and Ogun states, in the sum of N85.838 billion; the Obele/Ilaro/Papalanto to Shagamu Road, 100 kilometres in Ogun State, in the sum of N79.996 billion.

“Council considered and approved this memorandum, to facilitate the construction of 274 kilometres of concrete roads. So, this will be the largest single award of concrete roads ever undertaken by the government of Nigeria in one award.“

According to him, the award of the contract to Dangote Group was consistent with funding options, adding that the award is consistent with the government’s multiple funding options, which includes engagement with the private sector.

The minister added that the tax credit initiative was in existence in the last administration before the Buhari government was inaugurated, but it was not utilised.

“So, this administration has revised it, expanded it, and has used it to construct roads like the Apapa Wharf Road, the Oworonsoki to Apapa, through Oshodi Road, by the same Dangote Group. The Obajana-Kabba Road, still the Dangote Group. The Bodo-Bonny bridges and road, which Council approved last week, through the NLNG.

“There was also interest by many other companies that are being reviewed. So, it’s not unique to Dangote. So, he’s the one who has applied and we’ve been in this process. So, this is the next batch of roads that they are taking up. They invest their money and then instead of when their taxes come due for payment, they net it off. That’s the circumstance. This is not concessioning, this is tax credit policy, don’t let’s mix them together.

“The policy says that anybody who wants to invest his personal resources, and it includes individuals, in any infrastructure that the public will have access to, can do so under certain conditions, which includes applying to the Ministry of Works. The ministry evaluates and there’s a tax credit committee chaired by the Minister of Finance because they keep an eye on how much tax giveaway in one year so that it doesn’t affect the government’s revenue performance, once we take on the investment. So, it’s the committee that then approves and says go ahead, this is good, this is how much tax we’ll allow per year and if the company is satisfied, then we go to BPP and then come to FEC.”

The other approval obtained by the ministry was to revise the total cost of the contract for the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.

According to Fashola, FEC considered and approved the request to revise the cost of the construction of part of the road by N204,411,926.13. The original contract sum was revised from N1.691 billion to N1.896 billion and the completion period is now 12 months.

On his part, the presidential spokesman, Mallam Garba Shehu, spoke on the memo presentations made by some ministers and also approved by FEC, including the formalisation of the Police Special Service in the interest of transparency and accountability.

According to him, the Minister of Police Affairs, Mr. Maigari Dingyadi, had an important scheme which FEC approved.

He said: “It is the deployment of what they call Special Police Services. And this is about a new system that will formalise what has existed with us all the time. You know police provide escort and guard for big corporations, banks, and so on. Now, in the interest of transparency and accountability, the government is formalising this relationship. And there will be an introduction of tariffs and billing schemes. This will be using PPP (Public-Private Partnership arrangement).

“The police projected the use of consultant that will help them to manage this. Part of the revenue will go to the federal government. Part of it will go to the police. Part of it will go into police allowances. And part will go to consultants as their own fees.

“This is something that has been going on for many years. And it has happened virtually in all countries of the world. In our own case, it has remained largely, people will say, undocumented or non-formalised. Government is concerned about leakages in revenue and incomes which should be blocked.”

He added that FEC also approved contracts worth N754,048,161.25 for the Economic and Financial Crimes Commission (EFCC) for capital projects for the supply of communications at the command and control centre.

“This is to enable EFCC to comply with modern-day investigative techniques, improve its operational efficiency and support the administration of criminal justice system in the country. So, these are basically defensive and offensive cyber-security systems.”

Also speaking, Minister of Health, Dr Osagie Ehanire, said the council approved procurement contracts for his ministry worth about N8.6 billion.

He stated that the ministry presented three memos, which were all approved with one of them for the procurement of test kits for HIV/AIDS.

“As you all know, Nigeria has succeeded in driving down the HIV prevalence from 3% to 1.3%. The nationality indicator and the impact survey that was done recently, now we want to push it further down by being able to do more testing, particularly of mothers who may be carrying HIV and they don’t know it, and they can pass it on to their unborn children.

“That’s sort of called the prevention of mother to child transmission and also without routine tests that will be done on people who may have absolutely no symptom at all but are carrying HIV virus. So, these test kits we are procuring and we’re also including those test kits that can also detect syphilis. Syphilis, as you all know, is another sexually transmitted disease. So, this memo was presented today and passed by Council,” he added.

Minister of Power, Mamman Sale, on his part, said his ministry presented three memos which were all approved.

He said: “One is for the construction of 45 km Offafa-Umuahia Transmission Line in Abia State, in the sum of $170,465 plus N814.1m. The second one is the construction of 150 33 132 33 1by 60 substation at Obajana with line base extension at Lokoja in the sum of N259.9m.

“The last one is the construction, design, and supply of 2 by 50 MVA 132 33 substations at Ikom with 2 by 132 line base transmission at Calabar, Cross River State. It also includes the design and construction of 220 km Calabar-Ikom 132 Cable Double Circuit Transmission Line. The amount is $39.9m plus N9.5 billion.”

Deji Elumoye in Abuja

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