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Business

FG says private individuals can build, operate, maintain highways

The FG has given a nod to private individuals to build, operate and maintain assets on some federal highways available for concession.

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FG says private individuals can build, operate, maintain highways

The Federal Government has said that private individuals will be allowed to build, operate and maintain assets on some federal highways that are available for concession.

This follows the receipt of the Outline Business Case Certificate of Compliance by the Federal Ministry of Works and Housing, to commence the procurement process for the concession of 12 federal highways.

According to a report by Punch, this forms part of the Highway Development and Management Initiative (HDMI), which is proposed by the Federal Government.

What the HDMI document from the Federal Ministry of Works and Housing is saying

On how the HDMI partnership would be implemented, the document states that the Federal Ministry of Works and Housing said that there were 2 categories namely; Value Added Concession and Unbundled Assets Approvals.

In the Value-Added Concession initiative, the ministry stated that the road pavement and entire right-of-way would be on concession for development and management by the concessionaire.

The ministry stated, “For the Unbundled Assets Approvals initiative, approvals/permits are issued for individual assets on the right-of-way on a build, operate and or maintain basis.’

This initiative means that individuals would now be granted permission to develop and maintain assets on the economically viable federal highways in order to boost the economic activities on the roads.

The Federal Ministry of Works and Housing stated that the objective of both approaches was to provide adequate highway services through the development of revenue-generating assets along the highways.

The ministry stated, “This is key to maintaining the functionality of the highway as well as engaging and generating wealth for indigenous small and medium enterprises.’’

It further explained that the idea of the HDMI is the involvement and collaboration with the private sector through the concession of economically viable routes to technically and financially capable private companies while adding that it would be through the management and development of the right-of-way.

On how individuals and groups could participate, the federal government advised interested persons, companies and groups to form consortiums of construction/road maintenance companies, financiers, toll operators, rest house operators, advertising companies, lane marking experts, refuse managers, among others.

The government expressed its determination to ensure that its assets were entrusted into capable hands.

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What you should know

  • It had been earlier reported that the Federal Ministry of Works and Housing had been certified to commence the concession process for 12 pilot federal highways.
  • The Infrastructure Concession Regulatory Commission (ICRC) had handed over the certificate to the Minister of Works and Housing, Babatunde Fashola, at the ministry’s headquarters in Abuja.
  • The concession of the roads may also signify the return of toll gates as concessionaires are expected to recoup their investments.
  • 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 has also revealed that it is expecting over N1 trillion investments from the private sector for the development and maintenance of the various highways earmarked for concessioning under the HDMI, which would reduce the financial burden on the government.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. @charlesofafrica

    February 23, 2021 at 2:37 pm

    Good initiative, but sad to say that development projects for commercial interest on highways in overly populated states like Lagos state will significantly increase the traffic in the entire state if more over head bridges are not introduced to cushion the effect of such developments.

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Business

FG moves to appoint fund manager for $37 billion infrastructure company

The FG has arranged to engage an asset manager for its newly set up Infrastructure Company of Nigeria Ltd.

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The Federal Government has concluded plans to engage an asset manager for its newly set up Infrastructure Company of Nigeria Ltd. (Infra-Co), to raise about N15 trillion ($36.7 billion) for projects and accelerate growth in Africa’s biggest economy.

This is coming barely 2 weeks after President Muhammadu Buhari approved the government’s N1 trillion initial seed capital for the Infrastructure company, which will be set up under a Public-Private Partnership.

According to a report from Bloomberg, a source who wants to remain anonymous said that the Central Bank of Nigeria (CBN) and its funding partners, Africa Finance Corporation (AFC) and state-owned Nigeria Sovereign Investment Authority, are seeking proposals from companies to independently manage the infrastructure company’s fund-raising plan.

The sought after fund manager will be responsible for coordinating the total equity capital and associated debt raise required by the company with the asset managers seeking the role expected to have been active in infrastructure financing.

The CBN Governor, Godwin Emefiele, had earlier said that the government needs to be innovative in its approach to developing infrastructure in the country and believes that InfraCorp will be a major game-changer in this regard.

Some firms such as PricewaterhouseCoopers, Boston Consulting Group, McKinsey and KPMG have expressed interest in getting the role of transaction advisers on the deal with Ukiri Lijadu and Co. and Kenna Partners appointed legal advisers.

This is as the report says that the firms were either not available to confirm the development or could not make any comment yet.

What you should know

  • It can be recalled that President Muhammadu Buhari, had earlier approved the government’s seed capital of N1 trillion for InfraCo, an infrastructure company, which will be wholly focused on critical infrastructure investment in the country, under a Public-Private Partnership.
  • The President had said that InfraCo will be raising funds from the CBN, Nigeria Sovereign Investment Authority, Pension funds, and local and foreign private sector development financiers.
  • This will help boost infrastructure investments to stimulate economic growth after exiting its second recession in 4 years in the fourth quarter and bridge the infrastructural gap in the country, with Nigeria needing at least $3 trillion over 30 years to close its infrastructure deficit.

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Business

Afreximbank sets up a $500 million fund to support Africa’s creative industries

African Export-Import Bank has set up a $500 million fund to support Africa’s creative industries.

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AfDB, Chinelo Anohu

The African Export-Import Bank (Afrexim Bank) has set up a $500 million fund to support Africa’s creative industries as the continent faces a challenge to effectively monetize its creative output.

This disclosure was made by Afreximbank President, Benedict Oramah at a virtual “fireside chat” on Tuesday organized by the Africa Soft Power Project, entitled “The New Face of African Collaboration.”

According to Africa Investment Forum Senior Director, Chinelo Anohu,

“Digital platforms in Africa should scale up to take advantage of the continent’s surging demand for creative content, and the African Development Bank flagship entity is providing advisory services and investment support to creative players.

“The Africa Investment Forum was working to promote content deals as well as digital infrastructure projects to advance creative industries, including support to smaller players.

“At AIF 2019, we had a very interesting entrepreneur scheme which saw those that were not as big get the kind of funding they needed to get beyond getting a feasibility study done.

“Data is one of the African Development Bank’s strong points. They have a fantastic research division, and what we’re trying to do is mainstream that data culled from 55 countries and distill it in such a manner that the investors can easily access the information they need.

“Support for intellectual property rights and equipping investors with the data they need to tackle negative perceptions about investing in Africa are key priorities for Africa Investment Forum.

 What you should know

  • The event was held against the backdrop of the recent coming into force of the African Continental Free Trade Agreement (AfCFTA).
  • Discussion at the event primarily focused on the role of infrastructure and connectivity in advancing Africa’s creative industries, including film, textiles and design.
  • It is important to note that 2021 is also the African Union’s year of arts, culture and heritage.
  • In January 2020, Afreximbank set up a $500 million fund to support Africa’s creative industries.
  • It is strongly believed that AfCFTA would help address some of the key challenges to boosting Africa’s creative output.
  • The Africa Investment Forum, championed by the African Development Bank and its founding and institutional partners, works to accelerate the closure of the continent’s investment gaps. The Forum currently has a growing portfolio of 118 deals valued at $114 billion.

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