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Concession with tax holidays for bad roads

LATEST news on Nigeria’s troubled road infrastructure is the Federal Government’s concession of road projects to the private sector in exchange for tax holidays, and the request by state governments to take over federal roads in their domains.

Truck overturned due to bad roads all over

These options were borne out of total frustration with the Federal Government’s failure to fix its own roads. Due to the extent of this frustration across the country, most people would not bother with who fixes the roads.

It is obvious that the state governors’ proposal to take over the roads is based on their anticipation of being given more funds in a revised revenue sharing formula or a new devolution of powers arrangement. This is an option which can come after we achieve some consensus on the ongoing restructuring debate. Conversely, it is also an option that can propel restructuring of the country.

For the moment, we back the option of private sector concession of critical infrastructure management because we are sure it will produce good results for all. It is a workable option moving forward for now, until government rediscovers its capacity to deliver and prudently manage its own amenities.

The controversy over a tax holiday or the latitude of the holiday is understandable because of the fact that these tax giveaways have not taken the Governors who are stakeholders along. The tax incentive is also in line with the provisions of the new Road Trust Fund, RTF, policy, an initiative of the government to improve the country’s roads.

We advise government to expand the model to get more corporate bodies involved in taking up the provision of road infrastructure in exchange for tax rebates since the government has failed woefully in using tax money to provide and maintain the roads.

The Industrial Advisory Council in coming up with the RTF had recommended that companies that can provide roads will have the money spent on such projects deducted from their income tax.

There is evidence that with private companies given concessions to construct roads, the element of corruption could be cut down to the minimum. A good example is some critical roads within Apapa which government had said would cost N20 billion, but when they were given as concessions to Dangote, Flour Mills and the Ports Authority, the cost came down to N4.2 billion.

We advise, however, that giving away public amenities to concessionaires in exchange for tax must also be strictly followed with supervision to ensure that quality job commensurate with the amount in tax is done. It is the duty of government to protect the interests of the public and ensure that their money is prudently spent.

The issue of competitive bidding should never be compromised if we are to get the best deals.
Whatever needs to be done for our infrastructure to overcome its shameful deficits must be done, and quickly too.



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