A business case for road infrastructure


IN view of the change mantra adopted by the current administration headed by President Muhammadu Buhari and the anticipated rapid development in Nigerian infrastructural facilities, it is pertinent to note that there is an urgent need for a paradigm shift from the traditional perception of road infrastructure as a ‘Cost Centre’ –an infrastructure ever demanding of public resources-to a self-sustaining model that could eventually contribute immensely to public coffers.

It is mandatory to critically examine every segment of the ‘road value chain,’ from project conceptualisation, road design, to road resource management and put in place, cost recovery and potential revenue generating features. Consequently, the following areas should be looked into, in relation to international best practice:

Road Design
New road designs should take into account potential revenue features and areas of private sector involvement including provision of truck/car stop-over with mini mart, fuel station, road museum, motel, police post , restaurant, health services, and so on. Apart from the revenue aspect, this is intended to make road transport to be fun, safe and adventurous. Well constructed federal roads should command beautiful scenery and also have historic and cultural values with leisure activities, street lights, close circuit cameras, control towers, road kilometre markers and security patrol. The above-listed could turn our highways into a 24-hour economy.

An example will suffice here. The 426 –Kilometre Gyeonbu Expressway from Seoul to Busan played a compelling role in the industrialisation and modernisation of South Korea. This is a major legacy of the President Park Chung-hee’s administration- the area connected by the freeway is home to 63 per cent of the nation’s population and generates 63 per cent of the nation’s Gross National Product (GNP) and 81 per cent of industrial output.
One of the new technologies adopted on the Gyeongbu Expressway is the Hi-Pass automatic paying system, which reduced physical toll gate to about 50 per cent.

The prevailing economic downturn with its dire consequence on public finance, calls for innovative funding options that view government fund as seed money, to be complemented by private sector investment. While tolling is inevitable, we should do away with physical toll gates and embrace modern highway technology. We should harness and put to use, the enormous biometric data available with the Police Central Motor Records (CMR), the Federal Road Safety Corps (FRSC) and the National Identity Management Commission. With collaboration and coordination, we should be able to trace every vehicle and owner, not only to enhance safety and security, but also minimise the ensnarling traffic often associated with physical toll administration.

Contributory Pension
A veritable option for funding of infrastructural development of roads, power and housing is the enormous resources already mobilised through the Contributory Pension, introduced in 2005. The total assets under the Contributory Pension Scheme are currently put at N5.14tn by the National Pensions Commission (PENCOM), with only N1.2bn representing 0.02 per cent, invested in Infrastructure Fund. The review of the Pensions Act in 2014 has opened a window of opportunities, and what is needed is the engagement of relevant stakeholders, to identify feasible projects, come up with acceptable business plans and package them for funding. PENCOM’s guidelines earmark as much as 20 per cent of Contributory Pension Assets, for Infrastructure development translating to more than N1trillion available, in addition to appropriated public fund and the largely untapped private sector investment.

Centripetal versus Centrifugal Forces in Road Management
Available statistics indicate that there are 36,000 kilometres of Federal Roads, 30,000 kilometres of State and 85,000 kilometres of Local Government Roads. This distribution, which shows that about 24 per cent of roads belong to the Federal Government of Nigeria, while 76 per cent reside with States and Local Governments, when compared to the statutory revenue distribution ratio of 54 to Federal and 46 to the sub-federating units, perhaps, explains the parlous state of our road infrastructure. Thus, it would be expedient to redress this obvious misalignment between responsibility and resource allocation. Stakeholders generally believe that setting up a Federal Roads Authority and the accompanying Road Fund is a veritable option in addressing issues of lopsided responsibilities, unpredictable and inadequate funding of road infrastructure. It is therefore worthwhile to push for the passage of the Bills on road reform which have been pending with the Legislative Arm since 2010.

Conflict Management Process
The experience of the Lekki-Epe Highway project shows how well-intentioned government projects can become mired in unnecessary controversies. This phenomenon termed, NIMBY (Not in My Neighbourhood) by development economists, is not limited to this clime, as people crave for rapid socioeconomic transformation but prefer that projects like Airport, Transmission Towers, Waste Disposal Facilities, Crematorium, Military Bases, Nuclear Plants, Dams, Tolled Roads, and so on, are not within their vicinity. This calls for a systematic approach to head-off conflicts by ensuring that ‘Conflict Impact Assessment’ is institutionalised, as part of the preliminaries of public projects; introduce or reform regulations or laws related to conflict management and train government officials in the field of conflict management .
Sodade is an author and a retired permanent secretary of Lagos State Ministry of Economic Planning and Budget.