FEC Okays N202.8bn MTN Takeover Of Enugu-Onitsha Road Construction

*N13bn Fire truck maintenance centre for Katsina

The Federal Executive Council (FEC) has approved the takeover of the construction of the Enugu-Onitsha Expressway by MTN at the cost of over N202.8 billion under the road Infrastructure Tax Credit Scheme.

This followed a memorandum presented by the Ministry of Works and Housing to the council presided over by President Muhammadu Buhari at the Presidential Villa, Abuja on Wednesday.

The Minster, Babatunde Fashola, who briefed correspondents after the meeting, explained that it is in line with Executive Order 7 signed by the President in January 2019.

He said the telecommunication giant will complete the dualization of the 110-kilometre road.

In the same way, he said the council approved the Umuchi-Ususu-Umueme GZ Industries Road in Abia for construction by GZ Industries also under the Tax Credit Scheme at the cost of about N4.2 billion.

Fashola explained: “So we, the Ministry of Works and Housing presented two memoranda and they are largely PPP-based memoranda and I will explain how.

“In 2019 January 25 specifically, you might recall that President Buhari approved Executive Order 7, which was the road infrastructure tax credit scheme, to allow the private sector to invest tax liabilities in advance in infrastructure, and that policy has helped us to finance roads like or by Obajana to Kaba, Apapa-Oshodi, Oshoki-Ojota Expressway, the Bodo-Bonni expressway in Port Harcourt, about a 1000 kilometres covering 21 roads under the NNPC investment. So, there is increase optic for that policy. So, today we have two more.

“So, the first that was approved today was the one by MTN Nigeria PLC, the telecommunication company to take over and complete the ongoing Enugu-Onitsha Expressway. That road is 110 kilometres, which is being dualised. So, you have 110 kilometres times two.

“The outstanding works aggregate to about 91 point something kilometres on both sides, if you accumulate it for those who use the road.

“You will see that the Enugu bound section has been largely completed but there’s a lot of work to be done on the Onitsha section.

“So, this policy is going to allow a steady and sustained stream of funding to completion by MTN and the amount approved is N202,887,436,672,11 billion to complete the outstanding works of an aggregate of 91.9 kilometres on both sides.

“The second memo also was under the Tax Credit Scheme and while the first one was related to the road linking Anambra and Enugu states, this one is with respect to a road in Abuja state.

“Now, the road is called Umuchi -Ususu Umueme GZ Industries Road in Abia. The private sector beneficiary of the approval is a company called GZ Industries. GZ Industries manufactures aluminium cans for bottling drinks. They have a factory in Agbara in Ogun state and they have another one in Abia in this area. So, it’s a link road to their factory.

“The approval was for N4,205,454,855,26 billion. The road is a 3.7-kilometre road. So it’s an access road to their Industry Council, approved both memoranda.”

The FEC also approved the establishment of a fire truck maintenance and refurbishment centre to be sited in Katsina at the cost of N13,020,022,803.

It was part of the three memoranda presented to the council by the Ministry of Aviation, whose minister, Hadi Sirika, told correspondents that the project is important to the country.

He said: “So, the second memoranda is approval for the award of contracts for the establishment of Fire Truck Maintenance and Refurbishment Center in Katsina. And this is a very critical procurement for us. It is to attend to all the issues we’re having with fire tenders all over the country.

“In the past, past governments used to ship this firefighting equipment back to Europe where they’re manufactured to get them refurbished and bring back at a cost; and of course, it takes time to do so, and export our labour on our foreign exchange.

“So, the Buhari government decided that we should establish one and that centre will cater for aviation firefighting equipment, including all other firefighting equipment around the country.

“In fact, it’s not going to be limited to only firefighting. It will be for heavy-duty vehicles that could be maintained and the intended purpose, as they gain experience, we go into the assembly of those trucks here in Nigeria, similar to what Volkswagen and Peugeot are doing, and eventually, they start to manufacture our own.

“So, the setup will be with the aim to achieve that but the first initial contract is to set it up in such a way that we’ll be doing maintenance on those equipment, and the contract sum was N7,913,949,964.

“The second contract under that is the building itself. The building of the maintenance centre, which is Messrs Ingenious Nigeria Limited at the sum of 3,985,432,685.

“And the other one is the civil works around it, which went to Messrs Glovesly Pro-Project, the cost of 1,120,640,154. 63. This is within our own threshold as a ministry. So, it didn’t come to Council but the two came and they passed on the completion period with this procurement is 12 months.”

Sirika disclosed that FEC also approved the full business case for the establishment of Maintenance, Repair and Overhaul (MRO) facility for the Ministry of Aviation despite the availability of the facility under some private operators in the country.

He explained that the new one is necessary because the existing facilities are limited in capacity.

The Minster stated: “The second memoranda is the approval of the business case, full business case. Now, this is a roadmap item for the Ministry of Aviation. We seek to establish a maintenance, repair and overhaul facility where aircrafts will be maintained here in the country, and will be a departure from the former where aircrafts are flown to Europe, to America or to the far East for maintenance. In this particular case, we will be doing the maintenance here when it’s established.

“There’s a lot of debates. People have said, we have Messrs Aero Contractors, we have Ariks have others that are having the MROs. Well, those MROs, Yes, but they are not to the size and to the level that we envisaged. Those are doing small single-aisle airplanes, but this one is going to go the whole hog; it’s going to be a full centre for full ABC and D Checks on wide body multiple aisle, high-capacity airplanes within the country.

“This will stop us from exporting our labour, our foreign exchange and will transfer technology and then of course, begin the future to put together a manufactured certain parts of aircrafts and of course, aircraft itself.

“So, this business case is for 30 years and the company or the group that won the contract is Messrs AGW and they came in a consortium with NAYAK Aircraft Services and Messrs Glovesly Pro-Project Limited and they will be paying a fixed fee of the sum of $30,000 in the first year, with annual escalation rate of 3 per cent payable annually in advance and other fees that are variable. 0 to five years- 1 per cent; 6-10 years 1.5 per cent; 11-15 years, two and a half per cent; 16-20 years, 5% and 21-30 year, 12 and half per cent.

“The total amount of money they will pay the federal government is $185,750,000. This is a fixed fee of about $1.4 million, variable fees of $51.1 million; land rent $6.82 million and corporate taxes $136 million.”

FEC also approved the award of contract for the Nigeria Police Trust Fund for the supply of vehicles and insurance cover for other vehicles at a total cost of N4,541,829,704.17.

The Minister of Police Affairs, Mohammed Dingyadi, who briefed the media on this, gave the specification of the contract as Toyota Landcruisers, Toyota Prado 2021 model and Toyota Camry.

He said they are to be used for tactical operations to achieve “the vision and strategic deployment in a bid to strategise for better security networking, as well as aid strategic deployment of technical squads to tackle insecurity across the country.”

He said the insurance is intended to cover all the 450 vehicles purchased by the Police Trust Fund between 2020 and 2022.

The council similarly approved a total sum of N592, 271, 792.48 for the procurement of Magnetic Resonance Imaging (MRI) equipment for the Obafemi Awolowo University Teaching Hospital (OAUTH), Ile-Ife,

Minister of State, Health, Ekumankama Joseph, who spoke on this, noted that the procurement became necessary because of poor services to patients suffering from ailments requiring thorough diagnosis.

The Minister explained that the teaching hospital has only one 0.2 Tesla MRI equipment, which is now obsolete, saying: “So, we have been having challenges of giving the very best of health services to people, patients who come to the hospital for diagnostic services and treatment.

“So, today FEC in its wisdom approved for procurement and supply of one unit A 1.5 Tesla Magnetic Resonance Imaging machine, and other accessories for the Obafemi Awolowo University Teaching Hospital, Ile-Ife in favour of Messrs CG Gasta Company Limited in the sum of N592,271,792.48. This is inclusive of 7.5 per cent VAT with a delivery period of six months.

“With the procurement of this equipment, it is strongly believed that most patients that usually travel to Lagos or other surrounding environments close to Ile-Ife, to seek for better medical services, will now be able to have the comfort and leisure of staying back in Ife to get the medical services they need in terms of diagnosis and treatment at the Obafemi Awolowo University Teaching Hospital.”