FEC approves N1.9trn to NNPCL to construct 44 roads under tax credit policy

The Federal Executive Council (FEC), presided over by Vice President Yemi Osinbajo, yesterday, approved the proposal for  the Nigerian National Petroleum Corporation Limited (NNPCL) to invest N1.9 trillion in the reconstruction of 44 federal roads under the tax credit policy.

 Of this amount, N215.3 billion would be spent on South South and South East roads.

Senior Special Assistant to the President on Media and Publicity Office of the Vice President, Laolu Akande,, who briefed journalists after the meeting said FEC approved the recommendation to invest in the reconstruction of selected federal roads under the Federal Government Road Infrastructure Development and Refurbishment Investment Tax Credit Policy Phase 2 by the NNPCL and its subsidiaries.

He said: “So, the council approved the proposal by the Ministry of Works and Housing for the reconstruction of 44 proposed federal roads with a total length of 4,554 kilometers in the total sum of N1.9trillion.”

The approval is coming 15 months after the NNPCL expressed interest in investing in the reconstruction of selected federal roads in order to sustain a smooth supply and distribution of petroleum products across the country.

President Buhari had on January 25, 2019, signed the Executive Order 007 which was the instrument that brought about the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, with the aim to unlocking funding from the private sector to critical road infrastructure in the country.

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The Executive Order 007 was designed to empower private companies to finance construction or refurbishment of federal roads designated as “Eligible Roads” under the scheme and recoup their investments through deduction of the approved total costs expended on the project from their annual Companies Income Tax.

The Road Infrastructure Scheme is a Public-Private Partnership intervention that enables the Federal Government to leverage private sector capital and efficiency for the construction and refurbishment of critical road infrastructure in key economic areas in Nigeria

Under the initiative, the private participants of the scheme provide the funds for the construction or refurbishment projects and in exchange, the participants are entitled to recoup the funds provided as a credit against the Companies Income Tax they are expected to repay. Under the initial programme, the NNPC is currently constructing a total of 1,804.6 kilometres of roads at a total cost of N621,237,143,897.35

A breakdown of the project funding showed that the North-Central geo-political zone, made up of Federal Capital Territory, Benue, Kogi, Kwara, Nasarawa, Niger, and Plateau States, got. the highest chunk of N244.87bn for the construction of 791.1 kilometres of road

The South-South geo-political zone, comprising Akwa-Ibom, Bayelsa, Cross-River, Delta, Edo, and Rivers state, emerged the second highest beneficiary of the NNPCL Road Infrastructure Development and Refurbishment project with N172.02bn for a total of 81.9 kilometres of road.

he South West, made up of Ekiti, Lagos, Osun, Ondo, Ogun, and Oyo States, followed with a total allocation of N81.87bn for the construction of 252.7 kilometres of roads.

The NNPCL allocated N56.12bn to the North-East, comprising Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe states,the construction of 273.35 kilometres of roads under the scheme.

The South East geo-political zone; the zone is made up of five states, comprising Abia, Anambra, Ebonyi, Enugu,and Imo.states, got N43.28bn allocation for the construction/rehabilitation of 122 kilometres of road.

The NNPC allocated N23.05 billion for the rehabilitation of 283.5 kilometres of road to North West geo-political zone, made up of Kaduna, Katsina, Kano, Kebbi, Sokoto, Jigawa, and Zamfara States. The road projects are being funded by NNPC and the equivalent amount is deducted by the Federal Inland Revenue Service from the National Oil Company’s tax obligations.

Minister of Environment, Mohammed Abdullahi said Council approved the procurement of 31 project vehicles for the hydrocarbon pollution remediation projects in Ogoni land. 

He recalled that in December 2022, FEC had approved some projects for Ogoni and remediation of some polluted site. 

“In view of the fact that we are going to inspect on a regular basis, experts from outside the country, there’s a need to provide project vehicles so that they can effectively inspect, supervise and monitor the remediation exercise. FEC today approved the sum of N1,354,016,250 in favor of Messers Mujav automobile Nigeria limited to provide 31 number of vehicles for the project. These include one 18-seater Toyota Hiece bus, one 30-seater Toyota coaster bus, they’re all supposed to be 2022 models. Then 11 Toyota Hilux double cabin four will drive also to 2022 model, diesel engine. Then 15 numbers Toyota Hilux double cabin four wheel  drives, diesel and petrol engine also 2022 models. Then one Toyota Landcruiser twin turbo 2022 model and lastly two unit of Land Cruiser V6 Prada for the projects. Only 31 vehicles were approved for the hydrocarbon pollution remediation project to ensure effective supervision of the project particularly delimitation sites.“

Sun