Federal Government Ponders Public-Private Partnership Structure as Nigerian National Petroleum Company Limited Abandons N3 Trillion Tax-Credit Highway Developments
In a recent media briefing held in Abuja, Works Minister David Umahi announced that President Bola Ahmed Tinubu has directed the ministry to explore alternative funding models for a series of road projects that have been affected by the Nigeria National Petroleum Company Limited's (NNPCL) decision to halt funding.
The tax credit scheme, which allowed NNPCL to fund critical road infrastructure across Nigeria in exchange for tax offsets, has come under threat due to the company's recent pullback. As a result, a list of affected road projects is being compiled and will be evaluated under the Public-Private Partnership (PPP) model.
One of the affected projects is the 43.6-kilometre Maraba-Keffi dual carriageway, which is being redesigned with concrete pavement. Due to the NNPCL's withdrawal of further funding from August 1, 2025, aligning with its new commercial mandate under the Petroleum Industry Act, proposals for PPPs to finance road projects worth about N3 trillion will be submitted to private sector investors and operators willing to invest in such projects.
The Minister has emphasised the need for contractors with strong financial and technical capacity to be given preference. He also addressed concerns about regional bias in project distribution, explaining that factors such as terrain, groundwater conditions, and access to materials affect road construction costs across regions, making direct kilometre-based comparisons inaccurate.
The Federal Government requires N3 trillion to complete road projects awarded under the NNPCL tax credit scheme. In light of this, the government encourages collaboration with industry players and private companies for co-investment and development commitments.
The Permanent Secretary, Mr. Olufunsho Adebiyi, addressed these concerns during the same briefing, stating that only the first carriageway and two kilometres of the second will be completed with the N76 billion still available from NNPCL, while the remaining sections will be maintained for now.
This announcement comes following the NNPCL's decision to halt funding. The Minister has compiled a list of all affected road projects and will present them to the President for consideration under the PPP model where applicable. The ministry will also evaluate these affected projects under the PPP model.
The news of the President's directive and the subsequent exploration of alternative funding models for affected road projects is a significant step towards ensuring the completion of these crucial infrastructure projects. The government's encouragement of private sector involvement and collaboration is expected to accelerate the pace of development and contribute to the country's economic growth.
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