Distinguished Ladies and Gentlemen,
Our Permanent Secretary has already welcomed you all to this event, the official ministerial notice of the commencement of the Highway Development Management Initiative (HDMI).
What remains for me to do is to get on with the business of issuing the notice for the HDMI to commence the procurement process; after a few preliminary remarks.
As you all know, one of the early initiatives of the Buhari administration was to improve the ease of doing business, and it is no secret that infrastructure was going to be an important driver of this initiative.
Since 2015, the administration has made no pretence about its commitment to improve the stock of infrastructure both in qualitative and quantitative terms in many sectors from roads and bridges, to rail, airports and seaports to mention a few.
Currently the government is executing over 700 different contracts which aggregates to the rehabilitation and reconstruction of over 13,000 km of roads and bridges across all the 36 states including the Federal Capital Territory.
As a result of the size of the undertaking, there is an increasing and unsatisfied demand for funding to finance these projects to completion and to maintain them.
There is also the need to finance other complementary services like weigh bridges, rest houses, towing vehicles and road furniture which seem better suited for the commercial initiative of the private sector.
In the interim, government is constrained to borrow, offer tax credit, increase her revenue mobilization capacities in order to sustain this massive infrastructure renaissance.
This is the background to the HDMI which is another effort to mobilize private capacity, resources, and entrepreneurship into the Nigerian highway sector; and hopefully convert roads from just social assets into assets of commercial opportunities and enterprise.
The HDMI is made up of 2 categories namely the Value-added Concessions (VAC) and the Unbundled Assets Approvals (UAA).
The UAA provides opportunity for small businesses to take advantage of the commercial opportunities that are available along the ROW while under the VAC the road pavement and entire right of way is concessioned for development and management by the concessionaire .
The VAC will be rolled out in phases, and this First Phase involves 12 roads namely:
1. BENIN – ASABA (125KM);
2. ABUJA – LOKOJA (193KM);
3. KANO – KATSINA (150KM);
4. ONITSHA – OWERRI – ABA (161KM);
5. SHAGAMU – BENIN (258KM);
6. ABUJA – KEFFI – AKWANGA (122KM);
7. KANO – MAIDUGURI (lot 1 Kano-Shuari 100KM ;
lot 2 Potiskum-Damaturu 96.24KM )
8. LOKOJA – BENIN (270KM);
9. ENUGU – PORT HARCOURT (200KM);
10. ILORIN – JEBBA (129KM);
11. LAGOS – OTA – ABEOKUTA (80KM);
12. LAGOS – BADAGRY (79KM)
These 12 roads were carefully chosen to ensure that each of the 6 (SIX) geo political zones are covered.
They aggregate in total to 1963.24 km which is 5.6% of the 35,000 km Federal road network.
The initial capital investments that we foresee is something in the order of NGN 1,134,690,048,000.76 and the employment potentials are an estimated 50,000+ direct jobs and 200,000+ indirect jobs.
The process started on the 17th June 2020 with legislative consultation to get parliamentary support and endorsement which I believe was successful and we are assured that if there is need for legislative support, the response will be reasonably swift.
It was followed by a Stakeholder consultation (webinar) which held on the 25th June, 2020 with Over 1,173 participants including critical stakeholders such as legislative representatives, representatives from the executive, prospective concessionaires, road users, media and industry experts; a market sounding session was also held on the 31st August, 2020 with 162 participants.
In the course of this journey, we have struck strategic partnerships with some high-profile brands who have offered their services in various aspects of the project development such as KPMG, UK NIAF, Lagos Business School etc.
We look forward to further exploring and strengthening these partnerships and the clear terms of the relationships will be notified to the public in due course as they are important to the success that we expect.
As published, not only has the right of way of the 12 roads been fully gazetted, the Infrastructure Concession Regulatory Commission (ICRC) , as a regulatory body for concessions of this nature, has issued the Certificate of Compliance for the Outline Business Case that is necessary to commence the process.
On the 3rd of March 2021, the Federal Executive Council (FEC), the highest executive decision-making organ of the Nigerian Federal Government was notified about the commencement of the procurement process.
In order to ensure competitiveness and to guarantee transparency, a procurement portal has been developed to serve as the interface with the public and manage the HDMI from Procurement to Implementation.
The portal will provide:
a. An interface that will provide the public all the information they need to know about the Initiative. It will give access to relevant documents, news updates, videos and so on;
b. E-procurement – The management of the PPP procurement process of the VAC and the process of approvals and permits under the UAA;
c. Vendor Market Place – This has specifically been included to promote local businesses and vendor partnerships with prospective concessionaires.
Therefore, let me say to all those who have been writing letters of inquiry, making offers of interest on the HDMI, offering to provide services like tolling, weigh bridge, rest houses and so on; we are sorry we cannot respond to those letters in order to maintain the integrity of this process and to keep the playing field level.
The Federal Government said it has voted N1,134,690,048,000.76 as the initial capital for the construction of 12 roads.
Minister of Works and Housing, Mr. Babatunde Fashola, who made this known, said the roads were chosen to ensure that the six geopolitical zones in the country benefited from it.
He added that the Federal Government is already executing over 700 contracts, which aggregate to the rehabilitation and reconstruction of over 13,000km roads and bridges across the 36 states of the federation and the Federal Capital Territory (FCT).
Fashola disclosed this during the Highway Development Management Initiative Ministerial Notice briefing, noting that as a result of the size of the undertaking, there was a demand for funding to finance the projects to completion and maintain them.
There was also the need to finance other complementary services like weigh bridges, rest houses towing vehicles and road furniture which seem better suited for the commercial initiative of the private sector, the minister said.
The ancilliary services and provision of furniture on major roads across the country is what the HDMI initiative is designed for according to the minister.
To all of you and to those who have not written or called, the day is now upon us, the venue is fixed and I have the pleasure to announce that the HDMI portal https://hdmi.worksandhousing.gov.ng/) will open on Monday the 29th March, 2021.
The portal will be open for all HDMI related functions as earlier stated and most importantly the RFQ application for the VAC which will be officially advertised on the same day.
Please visit the portal and I wish you all a very interactive and rewarding experience.
Let me repeat that all our transactions will be done through this portal and we will not entertain any personal inquiries to me or to any of our staff who have correspondingly been mandated not to entertain such requests.
Let me conclude by saying that we expect a vibrant process and a successful one that unleashes the commercial opportunities on Nigerian highways from paved roads, to clean and well-maintained highways, proper signage and route assurance signs, rest houses and commuter support for emergencies like vehicle towing and repairs.
We expect a splendid and safer commuting experience for all users of these roads as a result of the HDMI.
I thank all members of the Ministry and the ICRC and our partners especially KPMG and UKNIAF who worked tirelessly to bring us so far and urge them to prepare for more hard work in weeks and months ahead in order to bring this initiative to conclusion. More grease to their very hardworking elbows.