Tax credit: FEC awards N309.9bn road contracts to Dangote Stephen Angbulu

The Federal Executive Council on Wednesday approved the award of a contract to Dangote Industries for the construction of five roads totaling 274.9 km at the cost of N309.9bn to be advanced to the company as tax credit. Minister of Works and Housing, Babatunde Fashola, disclosed this while briefing State House correspondents after the Federal Executive Council meeting presided over by the President, Major General Muhammadu Buhari (retd.). Fashola explained that the road contract, which was the second approved for his ministry by the council, would be implemented on concrete and would be the largest of such projects in the country. He said, “The second memorandum presented by the Ministry of Works and Housing was for the construction or the reconstruction, as the case may be, of five road projects in favour of Messrs. Dangote Industries Limited, totalling 274.9 kilometres of federal roads, under the Federal Government Roads Infrastructure Tax Credit policy, which is one of our strategic partnerships with the private sector. “Those five roads totalling 274.9 km will cost N309,917,717,251.35 to be advanced by the Dangote Industries as tax credit.” He added that the roads include Bama to Banki in Borno State for N51.02bn running into 49.15km; Dikwa to Gamboru-Ngala, 49.58km, in Borno State for N55.5bn; and the Nnamdi Azikiwe Road, popularly known as Western Bypass in Kaduna, 21.48km, from Command Junction to Kawu, in the sum of N37.56bn. Others are the deep seaport access road sections 1 and 3 in Lagos State, through Epe to Shagamu Expressway, 54.24 km, that links Lagos and Ogun states, in the sum of N85.84bn; the Obele/Ilaro/Papalanto to Shagamu Road, 100km, in Ogun State, in the sum of N79.99bn. The minister said, “Council considered and approved this memorandum, to facilitate the construction of 274km of concrete roads. So, this will be the largest single award of concrete roads ever undertaken by the government of Nigeria in one award.” Fashola also explained that the award of the contract to Dangote Group was consistent with funding options. Speaking on the conditions surrounding the contract, he said, “First of all, the award is consistent with our multiple funding options, which includes engagement with the private sector. “Secondly, the tax credit initiative was in existence in the last administration before this government but was not utilised. So, this administration has revised it, expanded it, and has used it to construct roads like the Apapa Wharf Road, the Oworonsoki to Apapa, through Oshodi Road, by the same Dangote Group.” He said the list included the Obajana-Kabba Road (still the Dangote Group) and the Bodo-Bonny bridges and road, which council approved last week, through the NLNG. He added, “There was also interest by many other companies that are being reviewed. So, it’s not unique to Dangote. So, he’s the one who has applied and we’ve been in this process. So, this is the next batch of roads that they are taking up. “They invest their money and then instead of when their taxes come due for payment, they net it off. That’s the circumstance. This is not concessioning. This is a tax credit policy; don’t mix them.” PUNCH.