FG, Highway Concessionaires to Review Parameters for HDMI Projects Nationwide

Discussions to centre on inflation, FX crisis, reduction in road traffic

In view of the current economic realities, the federal government and concessionaires under the Highway Development and Management Initiative (HDMI), have agreed to review the parameters for the projects nationwide.

The Minister of Works, David Umahi, gave the indication in Abuja during a meeting with the Public Private Partnership (PPP) unit of the ministry and Messrs Africa Plus Partners Nigeria Ltd (APPNL), the concessionaires for the Benin-Asaba and Lagos-Abeokuta road corridors.

The 12 roads initially planned for concession under the first phase of the initiative were: Benin– Asaba; Abuja–Lokoja; Kano–Katsina; Onitsha–Owerri–Aba; Shagamu– Benin; Abuja-Keffi–Akwanga; Kano–Maiduguri; Lokoja–Benin; Enugu-Port Harcourt; Ilorin-Jebba; Lagos-Abeokuta; and Lagos-Badagry. However, only nine of the roads attained commercial close as of 2023.

The main objective of the HDMI, which seeks to facilitate the development of parts of Nigeria’s 35,000km of federal highway network, is to attract expertise and investment in the development of road infrastructure as well as maximise the use of assets along the Right of Way (RoW).

But Umahi said the newly introduced parameters will strengthen the quality delivery and management of road infrastructure under the PPP model of road infrastructure development and ensure efficient utilisation of the completed projects by road users.

The meeting had in attendance the team from the PPP office headed by Ugwu-Chima Nnennaya and the one from APPNL, led by Mr.

Dipo Lawore and Mr. K. V. Rao, according to a statement by Umahi’s spokesman, Uchenna Orji.

Specifically, the meeting which dwelt on the review of the project parameters for the Benin-Asaba and Lagos-Abeokuta road corridors as negotiated in 2022, was necessitated by the heightened inflationary pressures, exchange rate concerns as well as reduced vehicular traffic on the highways occasioned by the increase in fuel pump price of petrol.

The minister said the parameters would be fine-tuned, agreed upon and adopted in all contractual relations between the federal government and concessionaires, going forward.

He highlighted that the parameters will include that the design of the project should be in line with the specification of the ministry and investors can only improve upon the design, as well as that a reasonable construction period must be agreed upon.

In addition , he said that 100 per cent of one carriage way must be completed before tolling by concessionaires.

The business plan, he said, must be in line with the socio-economic dynamics while terms of tolling of road projects must be in accordance with the laws of the federation. He also stated that standard contract conditions must be followed.

“Contingency and variation on Price (VoP) shall be utilised only by the express and written permission of the client. Bill of quantities shall be verified and adopted in line with the prevailing market prices.

“Road count on traffic shall be carried out by the investor and where such data has been provided by the client, it is the duty of the investor to accept or verify and where the investor accepts, it shall be binding on all,” the minister said.

According to him, it shall be the duty of the investor to sensitise the public on the toll programme in every project.

Also, he explained that the client shall have the right to terminate the job of the investor for failure to comply with the time of road project completion while every road construction for highways must be in accordance with the highway standard prescribed by the law.

In their separate responses, the team leader of the APPNL and the head of the PPP unit of the ministry assured Umahi of their commitment to the innovative initiatives of the ministry.

They agreed that there was a need to review not only the cost of the concession projects, but also the scope of the project to meet the standard of road construction.

They expressed their commitment towards a robust negotiation on the project review that would lead to a financial close, so that work could commence without further delay.