HDMI: FG Reviews Existing Concession Agreements in Bid for More Transparency
Emmanuel Addeh in Abuja
The Minister of Works, David Umahi, has held a meeting with stakeholders and concessionaires in an effort by the federal government to enhance transparency in Nigeria’s Highway Development Management Initiative (HDMI) signed under the previous administration.
In a statement by Umahi’s spokesman, Uchenna Orji, the minister noted that this will enhance funding and private sector participation in the road infrastructure development under the HDMI.
Besides, he said that it aims to have a more realistic, transparent and productive approach to financing in the construction and maintenance of road projects under Public-Private Partnerships (PPPs).
At the two-day meeting held in Abuja, the minister identified certain articles and clauses in the existing concession agreements executed on May 23, 2023 that needed to be reviewed both in the original concession agreement and the proposed addendum to ensure value for money.
Besides, he noted that this will strengthen long term collaboration, transparency and accountability as well as degravitate potential put-call option agreement and litigation.
He raised issues for discussion including the issue of PCOA, additional facilities, performance security, shifting of encumbrances on site, the role of the independent engineer, competing road/alternate road, change in project scope, revision of toll fees, force majeure and stakeholder consensus building.
Umahi recalled that contractors were already on some of the project sites before the signing of the concession agreement by concessionaires and that innovations had been introduced to add value to the works sector, hence the need for a review of the existing concession agreement and its addendum.
He listed some of the requirements for the concessionaires to activate the implementation of their projects, including their obligation to ensure mutual termination of existing contracts before taking over their respective sites as well as the need to show evidence of their capacity and readiness.
In addition, Umahi stressed that they must show proof of source of funds for the project, payment of all outstanding debts owed to the existing contractors, evidence of technical and financial competence, and availability of company or partner’s equipment.
He restated that the Federal Ministry of Works would not disengage any existing contractor from the site in any of the projects unless the conditions precedent are complied with by concessionaires.
Umahi presented the full details of the proposal of the Federal Ministry of Works on the matters of concern in the existing concession agreement inherited from the past administration and maintained that the essence of the review sought was to ensure that the concessionaires comply with the best practices.
Part of the new addendum, the statement said, was that the concessionaires shall construct compulsory facilities which shall include CCTV and solar streetlights, rest areas and any other additional facilities needed to improve travel safety and comfort of travellers on the entire project route.
The minister tasked the concessionaires on commitment to the extant laws and regulations necessary for them to achieve the objectives of the HDMI.
Meanwhile, the Minister of State for Works, Bello Goronyo, has undertaken an urgent inspection visit to the critical portion of the Kaduna-Abuja Expressway, which has been causing significant delays in the movement of people, goods, and services.
The vital corridor is a major link within the nation’s socio-economic zones and its failed condition has heightened the hardship of motorists and impacted economic activities, a statement by the Director, Press & Public Relations, Mohammed Ahmed, stated.
Speaking during the inspection, the minister emphasised the strategic importance of the road, reiterating Tinubu’s commitment to making Nigerian roads motorable and safe, despite existing funding constraints.
He noted that the president has made it a priority to ensure swift interventions, where necessary, to ease the suffering of Nigerians, explaining that the ministry has assessed the identified portion of the road and will commence immediate emergency repairs
