12 highways to be privatized
The Federal Government has said it will officially open a bid for value-added concession under the Highway Development and Management Initiative (HDMI) on 12 highways tomorrow.
The affected roads for privatization Benin-Asaba (125km), Abuja-Lokoja (193km), Kano-Katsina (150km), Onitsha-Owerri-Aba (161km), Shagamu-Benin (258km), Abuja-Keffi-Akwanga (122km), Kano-Shuari (100km), Potiskum-Damaturu (96.24km)
The rest are Lokoja-Benin (270km), Enugu-Port Harcourt (200km), Ilorin-Jebba (129km), Lagos-Otta-Abeokuta (80km), and Lagos-Badagry-Seme (79km).
A statement by the Director, Press and Public Relations in the Federal Ministry of Works and Housing, Boade Akinola, indicated that the exercise would be witnessed by the Infrastructure Concession Regulatory Commission (ICRC) and relevant partners and stakeholders.
Earlier in the year, the minister for works, Babatunde Fashola said the concession arrangement tagged Highway Development and Management Initiative HDMI’, being promoted by the Federal Ministry of Works and Housing would attract investments to the tune of over N1.134 trillion.
He said the process would be executed in two parts comprising Value Added Concession (VAC) and Unbundled Assets Approval (UAA).
How will the new owners will make money?
Since the highways will not be tolled, some have been asking how the concessionaires will recoup their investment.
Well, according to the model being proposed by the authorities, to recoup their investment and remain profitable, the concessionaires are expected to develop infrastructure along the highways such as eateries, motor parks, petrol stations, motels, etc. Existing operators of such facilities on existing highways will have to start paying taxes and fees to the concessionaires.
More so, the concessionaires are expected to monetize the right of way. This means that all facilities such as fiber-optic cables, electricity lines, and even rail lines or any other public utility pipelines that will pass through the private highways must henceforth pay for the right of way permits to the concessionaires instead of the federal government.