Minister of works and housing Babatunde Raji Fashola (SAN) has hinted that the Federal Executive Council (FEC) has approved the phase II of the Nigerian National Petroleum Corporation and Federal Inland Revenue Service (NNPC/FIRS) Road Infrastructure Tax Credit Scheme.
He said the introduction of the NNPC Tax Credit Scheme would ensure the sustainability of funding critical infrastructure in Nigeria.
Fashola stated this at a press briefing in Abuja where all the stakeholders, including the NNPC, FIRS and contractors were in attendance.
The minister said contrary to inadequate funding of infrastructure experienced under the past governments, the administration of President Muhammadu Buhari had identified alternative sources of funding that could guarantee sustainability from the beginning of the projects to its completion without hitches.
He said, “The tax credit scheme is a new model that encourages partnership with private companies where taxes are paid in advance to enable the government to invest in notable projects that would be beneficial to its citizens like what is going on in the road sectors of the economy.”
Fashola also mentioned that the federal government, which has focused on nine major axes of Nigeria, said the A1- A4 axis of the country covers the northern part while the A5-A9 axis covers the East-West zone of the country.
He said the successful completion of all the roads would lead to sustainable mobility for Nigerians.
The roads like Akure-Ado-Ekiti and East-West which people have been complaining about would be catered for with the approval of the second phase of the NNPC Tax Credit Scheme.
On the payment of compensation, Fashola said compensation would not be paid to anyone occupying the government’s right-of-way, saying that the federal government right-of-way was 5.75 metres on both sides and appealed to members of the communities occupying it to vacate. Earlier, in his remarks, the permanent secretary, represented by the director in charge of the Office of the Permanent Secretary, Engineer Folunsho Esan, recalled that in line with the Executive Order 7 (2019) approved phase 1 of NNPC/FIRS Road Infrastructure Tax Credit Scheme on the 27th of October 2021.
He stated that with the completion of phase 1, FEC had also approved phase II of the scheme to fund 44 critical road infrastructure to the tune of N1.96 trillion.
Esan said as it was done in phase I, phase II would be governed by a set of guidelines to be issued to each contractor, adding that there would be a funding intervention agreement to be implemented in addition to the standard condition of the contract governing the execution of the projects.
He said: “The availability of this new funding window will ensure steady cash flow and a timely completion of projects.”
He also stated that the NNPC intervention which began in October 2021 with phase I has occupied the top of the log with a portfolio well in excess of N2.6 trillion.
On the part of NNPC, the group managing director, who was represented by the chief financial officer of the corporation, Umar Aliya, said funding would not be an issue anymore as the corporation was committed to fully funding phase II.
He said, “We are committed to setting aside funds for phase II. Funding would not be a problem. What is important to us is that our consultants will need to validate the value for money and the quality of work. We will not compromise the quality and timely completion of work.“
On his part, the executive chairman of FIRS, Mohammed Nami, commended the NNPC for its intervention as well as the contractors for the quality of the job done in the phase I of the scheme and declared that the NNPC has the capacity to fund the scheme.
He explained that most of the roads captured by Executive Order 7 to be executed by NNPC were mostly road projects inherited by the administration of Muhammadu Buhari and they are being fixed by the present administration through the taxes paid by Nigerians
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