FEC Okays N309.9bn Road Contract For Dangote As Tax Credit
The Federal Executive Council, FEC, Wednesday, approved the award of a contract to Dangote Industries for the construction of five roads totaling 274.9 kilometres at the local cost of N309,917,717,251.35.
The contract sum will be advanced by the company as tax credit.
Minister of Works and Housing, Babatunde Fashola, disclosed this while briefing State House correspondents at the end of the council meeting presided over by President Muhammadu Buhari at the First Lady’s Conference Room, presidential villa, Abuja.
The Minister said the road contract, which was the second approved for the ministry at the meeting, will be executed on concrete and will be the larger of such project in the country.
According to him, “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, which is one of our strategic partnerships with the private sector.
“Those five roads totaling 274.9 kilometres will cost N309,917,717,251.35 to be advanced by the Dangote Industries as tax credit.
“ The roads, specifically, are Bama to Banki in Borno State for N51.016 billion with a 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.“
Fashola said the award of the contract to Dangote Group was consistent with funding options, adding that some other companies had also benefitted from such tax credit.
Explaining the circumstances surrounding the award of the contract, he said: “First of all, the award is consistent with our multiple funding options, which includes engagement with the private sector.
“Secondly, the tax credit initiative was in existence in the last administration before this government but 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 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.”
He said the other memo approved for the works ministry was to revise the total cost of the contract for the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.
Fashola said Council considered and approved the request to revise the cost of the construction of part of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara state by N204,411,926.13, adding that the original contract sum was revised from N1.691 billion to N1.896 billion and the completion period is now 12 months.
The Minister of Health, Dr. Osagie Ehanire announced that the Council approved procurement contracts for his ministry worth about N8.6 billion. He explained: “The Ministry of Health presented three memos, which were all approved. One of them was 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.
“The other two were memos from NAFDAC, one of them was a memo that was meant to buy equipment for six laboratories in the country, and the memo was also passed without any question. It’s to update and upgrade the laboratories of NAFDAC.
“The third one is a new vaccine laboratory that will help us when we start manufacturing vaccines. As you know NAFDAC is a regulatory organ and its job is to test the vaccines that are produced, whether they are fit or not. In order to do that, they must have a laboratory, they must have the WHO approval of what we call the Maturity Level 3.
“So, they are working on getting Maturity Level 3 by having laboratories, including animal house and the remodeling of the existing facilities. So, those are the three memos that came to Council.
“For the vaccine laboratory, it’s N3,064,582,050.01. For the laboratory equipment, it’s N1,262,269,939. For the kits, they are N4,347,500,000.”
On his part, the Minister of Power, Engr. Mamman Sale said his ministry presented three memos which were all approved.
He said: “One is for the construction of 45 km Afara-Umuahia Transmission Line in Abia State, in the sum of $170,465 plus N814.1 million.
“The second one is the construction of 150 33 132 33 1by 60 sub-station 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 substation at Ikom with 2 by 132 line base transmissions 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 N9.5b.”
