The federal executive council (FEC) has approved the award of a
contract to Dangote Industries to construct five roads totalling
274.9 kilometres at N309,917,717,251.35 to be advanced by the
company as a tax credit.
![image](/2020/10/lawreport.jpg")
![image](/2021/07/lawp.jpg")
A tax credit is an incentive given to taxpayers, usually
subtracted directly from taxes owed or expected to be paid to the
government.
![image](/2021/07/escrow-service1.jpg")
Babatunde Fashola, minister of works and housing, stated this on
Wednesday while briefing state house correspondents at the end of
the FEC meeting presided over by President Muhammadu Buhari.
Fashola explained that the road contract, which was the second
approved for ministry by the council, will be executed on concrete
and will be the larger of such project in the country.
“The second memorandum presented by the ministry was for the
construction or the reconstruction, as the case may be, of five
road projects in favour of Dangote Industries Limited, totaling
274.9 kilometres of federal roads, under the Federal Government
Roads Infrastructure Tax Credit policy,” he said.
“Those five roads totaling 274.9 kilometres will cost
N309,917,717,251.35 to be advanced by the Dangote Industries as tax
credit.
“The roads, specifically, are Bama to Banki in Borno State for
N51.016 billion with 49.153 kilometres; Dikwa to Gamboru-Ngala,
49.577 kilometres in Borno State for N55.504 billion; the Nnamdi
Azikiwe Road, popularly known as a Western Bypass in Kaduna. 21.477
kilometres, from Command Junction to Kawu, in the sum of N37.560
billion.
“Others are deep seaport access road sections 1 and 3 in Lagos
State, through Epe to Shagamu Expressway, 54.24 kilometres, that
links Lagos and Ogun states, in the sum of N85.838 billion and the
Obele/Ilaro/Papalanto to Shagamu Road, 100 kilometres in Ogun
State, in the sum of N79.996 billion.
“Council considered and approved this memorandum to facilitate
the construction of 274 kilometres 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 explained that the award of the contract to Dangote
Group was consistent with funding options.
“First of all, the award is consistent with our multiple funding
options, which includes engagement with the private sector,” he
explained.
“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.”
“The Obajana-Kabba Road, still the Dangote Group. The Bodo-Bonny
bridges and road, which Council approved last week, through the
NLNG.
“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 tax credit policy, don’t let’s
mix them together.
“The policy says that anybody who wants to invest his personal
resources, and it includes individuals, in any infrastructure that
the public will have access to, can do so under certain conditions,
which includes applying to the Ministry of Works.
“The ministry evaluates, and the Minister of Finance chairs a
tax credit committee because they keep an eye on how much tax
giveaway in one year, so that it doesn’t affect government’s
revenue performance, once we take on the investment.
“So, it’s the committee that then approves and says go ahead,
this is good, this is how much tax we’ll allow per year, and if the
company is satisfied, then we go to BPP and then come to FEC.”
The other approval obtained by the works ministry was to revise
the total cost of the contract for the construction of Michael
Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.
Fashola said the government also considered and approved the
request to revise the cost of the construction of part of Michael
Imoudu/Ganmo/Afon Junction road in Ilorin, Kwara state by
N204,411,926.13, adding that the original contract sum was revised
from N1.691 billion to N1.896 billion and the completion period is
now 12 months.
The federal executive council (FEC) has approved the award of a
contract to Dangote Industries to construct five roads totalling
274.9 kilometres at N309,917,717,251.35 to be advanced by the
company as a tax credit.
A tax credit is an incentive given to taxpayers, usually
subtracted directly from taxes owed or expected to be paid to the
government.
Babatunde Fashola, minister of works and housing, stated this on
Wednesday while briefing state house correspondents at the end of
the FEC meeting presided over by President Muhammadu Buhari.
Fashola explained that the road contract, which was the second
approved for ministry by the council, will be executed on concrete
and will be the larger of such project in the country.
“The second memorandum presented by the ministry was for the
construction or the reconstruction, as the case may be, of five
road projects in favour of Dangote Industries Limited, totaling
274.9 kilometres of federal roads, under the Federal Government
Roads Infrastructure Tax Credit policy,” he said.
“Those five roads totaling 274.9 kilometres will cost
N309,917,717,251.35 to be advanced by the Dangote Industries as tax
credit.
“The roads, specifically, are Bama to Banki in Borno State for
N51.016 billion with 49.153 kilometres; Dikwa to Gamboru-Ngala,
49.577 kilometres in Borno State for N55.504 billion; the Nnamdi
Azikiwe Road, popularly known as a Western Bypass in Kaduna. 21.477
kilometres, from Command Junction to Kawu, in the sum of N37.560
billion.
“Others are deep seaport access road sections 1 and 3 in Lagos
State, through Epe to Shagamu Expressway, 54.24 kilometres, that
links Lagos and Ogun states, in the sum of N85.838 billion and the
Obele/Ilaro/Papalanto to Shagamu Road, 100 kilometres in Ogun
State, in the sum of N79.996 billion.
“Council considered and approved this memorandum to facilitate
the construction of 274 kilometres 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 explained that the award of the contract to Dangote
Group was consistent with funding options.
“First of all, the award is consistent with our multiple funding
options, which includes engagement with the private sector,” he
explained.
“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.”
“The Obajana-Kabba Road, still the Dangote Group. The Bodo-Bonny
bridges and road, which Council approved last week, through the
NLNG.
“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 tax credit policy, don’t let’s
mix them together.
“The policy says that anybody who wants to invest his personal
resources, and it includes individuals, in any infrastructure that
the public will have access to, can do so under certain conditions,
which includes applying to the Ministry of Works.
“The ministry evaluates, and the Minister of Finance chairs a
tax credit committee because they keep an eye on how much tax
giveaway in one year, so that it doesn’t affect government’s
revenue performance, once we take on the investment.
“So, it’s the committee that then approves and says go ahead,
this is good, this is how much tax we’ll allow per year, and if the
company is satisfied, then we go to BPP and then come to FEC.”
The other approval obtained by the works ministry was to revise
the total cost of the contract for the construction of Michael
Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.
Fashola said the government also considered and approved the
request to revise the cost of the construction of part of Michael
Imoudu/Ganmo/Afon Junction road in Ilorin, Kwara state by
N204,411,926.13, adding that the original contract sum was revised
from N1.691 billion to N1.896 billion and the completion period is
now 12 months.