The Federal Executive Council (FEC) on Wednesday approved N169.7 billion for the reconstruction of four roads under the Tax Credit Scheme.
Minister of Works and Housing, Babatunde Fashola made this known after the FEC meeting presided by President Muhammadu Buhari, at the Presidential Villa, Abuja.
The tax credit scheme, a 10 year scheme initiated by federal government aims at encouraging public-private partnership interventions and enabling the federal government to leverage private sector funding for the construction or refurbishment of eligible road infrastructure projects in Nigeria.
President Muhammadu Buhari on January 25, 2019 signed the Executive order 007, which established the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme 2019. The scheme seeks to encourage public-private partnership interventions on road construction and maintenance.
Following the signing of the Executive Order 007, the Federal Government and the Nigeria National Petroleum Corporation (NNPC) Ltd signed a Memorandum of Understanding (MoU) of N621 billion to fund the construction of critical road infrastructure across the 36 states of the federation.
The Minister of Works said the approval is part of implementation of the tax credit scheme, initiated in 2019 by President Muhammadu Buhari through the signing of Executive Order 7.
He said, “The two main memoranda relate to the uptake by the private sector in response to the tax credit programme, which we initiated in 2019, by Mr President signing of Executive Order 7 to allow private sector finance public infrastructure in lieu of tax and then to offset it over time, using tax credits.
“So, the first road that was awarded today on that policy initiative is the road from Bali to Sheti through Gashaka to Gembu in Taraba state – 234 kilometres, reconstruction of the road at a cost of N95.232billion.
“The existing road, for those who are familiar with it, has no concrete stone base.
“So it’s just laterite on the asphalt so it doesn’t last and it’s breaking up and leading to potholes.
“So, we have awarded this now for reconstruction under the tax credit scheme; there’s a N20 billion provision under the NNPC tax credit scheme that will be used to kick-start this immediately.
“So, this is a road that should not suffer from sustained funding challenges. Now that council has approved it, and it’s very critical road leading to the Mambilla Plateau.’
Fashola added that the FEC approved Mainstream Energy Solutions, to invest over N74 billion in the reconstruction of three roads in Kebbi and Niger States.
“The second project, which is also on tax credit scheme approved by council, is actually three roads.
“The applicant, in this case, is Mainstream Energy Solutions, a major energy player in the country, is now seeking to also participate in this policy by investing about N74.4bn,” he said.