Amidst recommendations that toll gates be returned to bridge funding gaps for road repairs, Babatunde Fashola, Minister of Works and Housing, has said the Federal Government was seriously considering to grant the wish.
He, however, noted that re-introduction of toll channels may not necessarily guarantee money to fix deplorable road networks across the country.
According to the minister, the Federal Government was not averse to returning toll gates but that the irregular toll traffic and possibility of eliminating fraud may serve as hitches in the long run.
The Peoples Democratic Party (PDP) on Wednesday kicked against the reintroduction of toll gates.
Former President Olusegun Obasanjo scrapped toll gates on highways nation-wide with effect from January 1, 2004, because, according to him, they had outlived their usefulness.
He had said that the N63 million which the toll gates generated daily at the time was nothing to write home about even as he said that the gates constituted inconvenience to motorists and encouraged corruption.
Fashola opined that even if the concept is done through public private partnership (PPP), it will still not be a money spinner to fix the roads.
Fashola, who briefed State House correspondents on the resolutions of the Federal Executive Council (FEC) meeting, presided over by President Muhammadu Buhari, shortly before he departed for South Africa, on Wednesday, said government was being constrained to review a lot of road contracts awarded by the administration of former President Goodluck Jonathan.
He said besides Lagos-Ibadan, Abuja-Kano and Abuja-Lokoja roads, other routes within the country may find it difficult to generate funds to cover expenses for fixing those roads.
The minister alleged that the immediate past government in 2014 budgeted the sum of N18 billion to cater for the entire federal roads in the country.
He said in most instances, roads were awarded to contractors without mobilisation funds, a development he noted resulted in several abandoned projects in the country.
“Let me just clarify this impression about toll gates. There is no reason why we cannot toll, there is no reason. There was a policy of government to abolish tolls or as it were, dismantle toll plazas but there is no law that prohibits tolling in Nigeria today.
“We expect to return toll plazas, we have concluded their designs of what they will look like, what material they will be rebuilt with, what new considerations must go into them. What we are looking out now and trying to conclude is how the bank end runs. And that is important because we want to limit significantly if not totally eliminate cash at the plazas while ensuring that electronic devices that are being used do not impede rapid movement.
“We are also now faced with the need to acquire more land to establish the width of the toll plazas because I believe we are looking at 10-lane plazas so that there can be more outlets. So we need to acquire more land; that is the work that is currently being done now.
“But let me also say that the expectation that collection of tolls will then produce the replacement cost of the road is perhaps not accurate because the traffic toll count that we have done on major highways does not suggest that there is enough vehicular traffic across all roads.
“The two or three heavy routes are the Lagos-Ibadan, Abuja-Kano, Abuja-Lokoja. Now, Lagos-Ibadan the heaviest traffic you will find is between Lagos and Shagamu, it is about 40 thousand vehicles. After Sagamu, heading to Ibadan drops to about 20 thousand. So most of it has gone eastward going towards Ondo and Ore and by the time you get Benin, the number significantly drops.
“It goes up again at the confluence where they are heading towards Niger. So, you can see that it is not a static 50 thousand all the way. Same thing with Abuja, Kano, Zaria. After Kaduna, the traffic significantly drops. It is about 40 thousand there too but after Kaduna it begins to drop by the time you get to Zaria. If you have driven to that road before, by the time you are driving between Zaria and Kaduna you see how thin the recurring number of vehicles you meet is and as you begin to head closer between Kaduna and Abuja, the number of vehicles begin to increase.
“So I think it is important to have that at the back of your mind, not all roads have those traffic counts.
“I also want to let you know that what we are doing is not accidental, we are being deliberate and methodical. So collecting information to know what to do with which place and what.
“On the PPP, I dare say that in the context of people arrogate PPPs to the right to toll, no, government can also toll. That is the point and that will happen without taking private sector fund.
“Let me refer you back to the Executive Order Seven that the president signed on tax credit for infrastructure. Essentially, that is another PPP initiative where companies are supposed to invest their money in infrastructure and then recover it back from their tax payments.
“What people may not understand is first of all the company has to make profit before it can be taxed. So when you have to build a N50 billion highway, how many Nigerian companies are even doing turnover of N50 billion in the private sector? How many are declaring profits of N50 billion and the tax that you apply on N50 billion profit is 30 percent. So if you do that, it will be about N15 billion.
“Look at it that way, so how many companies are in that? A few banks maybe and perhaps Aliko Dangote and it is surprise therefore that the Dangote Group are the ones who are building the Apapa Oworonshoki Expressway using tax credit”.
Meanwhile, FEC approved a total sum of N46 billion as cost of variation for some road project in the country.
The variation was necessitated by inflationary costs, including changes in prices of building materials, noting that most of the contractors abandoned the project for lack of funds.
“The first one is Ibadan-Ilesha bypass, 22 kilometres. Contract was awarded in 2010, no budgetary provision so the rates have become obsolete. Contractor wants new rate so that has necessitated a revision of the rates by N3.165 billion, that means the old contract price of N6.7 billion has moved now to N9.8 billion.
“The same is true of the Suleja-Minna-Lambata road. The entire road is 101 kilometres, was awarded in two phases. The first phase was awarded in 2010, 40 kilometres. The second phase covering kilometres 40 to 101 was awarded in March 2015 but they used the 2010 rates.
“Contractor is now at a point where he says those rates are not sustainable, he can’t continue and we have recommended that the revised rates be considered and council approved them. It’s a revision by addition of N12.6 billion, so the contract price moves from N23.6 blion to N36.2billion”, Fashola explained.
PDP Rejects Move By Buhari To Return Toll Gates
Reacting, the Peoples Democratic Party (PDP) has rejected plans by President Muhammadu Buhari to return toll gates on highways in the country.
The party lamented that such insensitive idea, in the midst of excruciating economic hardship and high costs of living occasioned by the incompetence and harsh policies of the Buhari administration, is completely ill-conceived and anti-people.
PDP insisted that at best, such idea amounts to executive bullying which cannot be justified under any guise as it will lead to more increase in costs of goods and services across the country.
“Only recently, President Buhari approved the increase of Value Added Tax (VAT) from 5% to 7.2% despite outcry by Nigerians, who are also being made to pay exorbitant tariffs for electricity and other essential services.
“Since President Buhari came into office in 2015, his administration had continued to increase prices and impose all manner of levies on Nigerians which proceeds are being frittered by the cabal in the presidency leading to a bleeding economy and despondency among the citizenry.”