The Return of Highway Tolls

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The federal government plans to re-introduce tolls on the country’s highways in order to raise funds for road repairs and rehabilitation, reports Chineme Okafor

Tolls on roads, according to research, are as old as road usage by humanity, but their application has evolved overtime with human development.

With regards to history, road tolls have been levied on travelers on foot, wagon, or horseback. It however gained prominence with the rise of the automobile usage, and Nigeria once had it on its federal highways.

As a practice, they are charges for use of a public or private road, and often considered a form of road pricing usually to help recover expenditure for road construction, repairs and maintenance. Tolls are equally another means of raising revenue for road infrastructure.

Nigeria previously had tolls on her highways, mostly those owned by the federal government until 2003 when former president, Chief Olusegun Obasanjo, shut them down.

Obasanjo, in his justification of the decision to abolishing the  tolls, said the roads should be maintained through revenue from the increase in fuel pump price, which meant petrol tax.

He also said the tolls generated only N63 million daily and claimed the revenue was insignificant in terms of the opportunity cost of operating them. Additionally, the then president noted they were cesspool of corruption because the government found it difficult to track their earnings.

But tollgates are officially coming back, 18 years after Obasanjo scrapped them, the Minister of Works and Housing, Mr. Babatunde Fashola, announced last Wednesday.

Road Tolls Returns

Speaking to journalists at the State House after a meeting of the Federal Executive Council (FEC), Fashola informed that the country was returning to tolling its highways.

He said there was no law that prohibited Nigeria from tolling its highways, adding that new designs for the toll plazas had been concluded and materials to be used for the construction factored into the designs as well as every necessary consideration about the plan.

Fashola explained the government was examining the method of banking transactions to be adopted at the tolls which would largely operate electronically to minimise cash transactions.

He equally noted that the government wanted the electronic transactions done without impeding vehicular movement, in addition to acquiring more land to accommodate the 10-lane plaza plan. This, he however, said was a challenge.

“Let me just clarify this impression about tollgates. There is no reason why we cannot toll; there is no reason. There was a policy of government to abolish tolls or as it were, dismantle toll plazas, but there is no law that prohibits tolling in Nigeria today,” said Fashola.

He further stated: “We expect to return toll plazas. We have concluded the designs of what they will look like; what material they will be rebuilt with; what new considerations must go into them. What we are looking at now and trying to conclude is how the bank end runs.

“And that is important because we want to limit significantly, if not totally eliminate cash at the plazas while ensuring that electronic devices that are being used do not impede rapid movement.”

 “We are also now faced with the need to acquire more land to establish the width of the toll plazas because I believe we are looking at 10-lane plazas so that there can be more outlets. So, we need to acquire more land. That is the work that is currently being done now,” he noted.

Measured Potentials

Fashola, however, said the government was not expecting that money spent on road construction could be recovered through tolling of the roads. He explained that a survey conducted on major highways in the country showed that charges on vehicles transiting on the roads were not enough to recover the cost of road construction.

He illustrated this with the Lagos-Ibadan Expressway, Abuja-Kano Expressway and Abuja-Lokoja road, which he noted were the busiest roads in the country.

 “The two or three heavy routes are the Lagos-Ibadan, Abuja-Kano, Abuja-Lokoja. Now, on Lagos-Ibadan Expressway, the heaviest traffic you will find is between Lagos and Shagamu.

“It is about 40,000 vehicles. After Shagamu, heading to Ibadan, it drops to about 20,000. So, most of it has gone eastward, going towards Ondo and Ore and by the time you get to Benin, the number significantly drops,” said the minister.

Speaking further, he added,“It goes up again at the confluence where they are heading towards the Niger. So, you can see that it is not a static 50,000 all the way. Same thing with Abuja-Kano-Zaria. After Kaduna, the traffic significantly drops.

“It is about 40,000 there too but after Kaduna, it begins to drop; by the time you get to Zaria, if you have driven to that road before, by the time you are driving between Zaria and Kaduna, you see how thin the recurring number of vehicles you meet is and as you begin to head closer between Kaduna and Abuja, the number of vehicles begins to increase.

“So, I think it is important to have that at the back of your mind; not all roads have those traffic counts. I also want to let you know that what we are doing is not accidental. We are being deliberate and methodical – collecting information to know what to do with which place and what”.

Fashola also said the Executive Order Seven, which was signed by President Muhammadu Buhari on private public partnership (PPP) arrangements for road construction, offered private companies the opportunity to partner the government on road construction and enjoy 30 per cent tax relief.

He, however, stated that only a few companies can embrace the initiative because the cost of building roads is relatively high when compared to the profit accruable to most companies.

Groundswell of Opposition

Notwithstanding the explanations of the government on the planned return of tolls on roads, a good number of reactions have trailed the decision, and chiefly from the leading opposition party – the Peoples’ Democratic Party (PDP), which rejected the plan as it was announced.

The PDP in its reaction described the idea as insensitive, ill-conceived and anti-people. Its National Publicity Secretary, Mr. Kola Ologbondiyan, said in statement that the idea was an executive bullying, adding that it would result to more increase in cost of goods and services in the country.

He said,“Only recently, President Buhari approved the increase of value added tax (VAT) from five per cent to 7.2 per cent despite outcry by Nigerians, who are also being made to pay exorbitant tariffs for electricity and other essential services.

“Since President Buhari came into office in 2015, his administration had continued to increase prices and impose all manner of levies on Nigerians, which proceeds are being frittered by the cabal in the presidency leading to a bleeding economy and despondency among the citizenry.”

The PDP spokesperson noted that, “instead of putting more pressure on already impoverished Nigerians by introducing toll gates at this point in time,” Buhari should exert himself and seek ways of creating wealth out of the abundant resources at the disposal of his administration or resign.

According to him, the PDP administration dismantled tollgates to ensure the wellbeing and economic prosperity of citizen.

“It is therefore certain that if our nation were under a PDP administration, as desired by Nigerians, competent hands would have been on the deck to proffer ways to create wealth for governance instead of turning our citizens into vassals who are overburdened by heavy taxes,” he added.

Besides the PDP, Nigerians from their online reactions on the social media, twitter, were affirmative in questioning the decision of the government to recreate tollgates on the country’s roads.

For example, Nnamdi Anekwe-Chive who tweeted through the handle @nnamdianekwe, said: “We must not hand over toll gates to the politicians. We can have a concession with world class infrastructure firms or the top ten construction giants in Nigeria to take over the federal highways. Scrap the federal ministry of works and make it a regulatory agency only.”

Similary, Lorenzo twitting from the handle @Loreonzo_DCC stated: “Bringing back toll gates on federal highway; how does it help ordinary Nigerian? Will it assist in fixing the bad state of Nigerian economy?”, just as social critic, Deji Adeyanju, twitted from the handle @adeyanjudeji that: “This is the most heartless government in the history of Nigeria. They are planning on returning toll gates to federal roads in the WORLD POVERTY CAPITAL. The Govt loves anything that will make Nigerians suffer. Higher taxes, Higher VAT, etc.”

Industry Observation

Speaking from a perspective of an industry operator, the Chairman of the Nigerian Institution of Highway and Transportation Engineers (NIHTE), Mr. Oludayo Oluyemi, explained to THISDAY that the plan was more of the government shirking its responsibilities as well as embracing superior options to fix Nigeria’s roads.

Oluyemi, whose NIHTE is a specialised branch of the Nigerian Society of Engineers (NSE), dealing specifically with the engineering of road and transport infrastructure noted that there was no road in Nigeria that passed standard test of functionality to be tolled.

He said most of Nigeria’s federal highways were in decrepit condition which makes them unsuitable for tolling. He equally suggested that roads users would be reluctant to pay tolls on roads that are in bad condition.

“I speak to you as the national chairman of the Nigerian Institution of Highway and Transportation Engineers (NIHTE), which is a division of the Nigerian Society of Engineers (NSE). The tollgates are good, no doubt about that. Tollgates are used in other parts of the world to generate funds for the maintenance of roads, but our challenge is: are the roads the federal government wants to toll in good conditions?

“Majority of our roads are dilapidated and in very bad conditions, so I don’t see any road that the federal government can put tolls on now. Again, what portion of the cost of maintenance can the tolls bring? I don’t see the tolls that they going to generate bringing any reasonable amount of money which would be used to maintain the roads because the roads are in extremely bad situations,” said Oluyemi, in a telephone conversation with the paper.

Questioning the modalities for the planned re-introduction of tolls on the roads, Oluyemi also said: “What is the arrangement in place for the tolling, it would be good if they will introduce electronic tolling and who will be in charge of the tolling – civil servants or private entities, those are the questions that are bothering my mind.”

Road Reform Abandoned

Oluyemi, also explained that there were better ways the government could adopt to fix the country’s roads. According to him, the government has declined to sustain a road reform effort initiated and sustained by the National Assembly through bills they passed and sent to President Muhammadu Buhari to assent to, and open up the country’s road and transport sectors for reform and improvement.

According to him,  the reform bills – the National Roads Fund (NRF) and the Federal Road Authority (FRA) bills would transform the way Nigeria’s highways are managed. He added that their key elements included that the private sector would actively participate the highway sector to ensure that road users’ get maximum comfort from their use of roads in the country.

The government, he however noted, have overlooked the bills and their intentions to reform the highways.

“They are shying away from the reality. We have told them what to do. The NSE for about 50 years now, has been telling the federal government what to do for us to have good roads in Nigeria, but they haven’t considered that and don’t want to go that way, which is for us to have a road sector reforms.

“The last National Assembly did a lot of work on the bills that were meant to bring up this road sector reforms. We are talking about the Federal Highway Authority bill and Road Fund bill, the National Assembly towards its end sent the bills to the president for assent but he hasn’t assented to them. In those bills, there are several ways we can raise money for the maintenance of the roads, the problem with our roads are majorly maintenance because we build without maintaining for years,” Oluyemi stated.

The engineer believed,  “For us to have longevity of roads in this country, they need to be maintained, they are never maintained. It is very imperative for them to provide money to maintain the roads, for instance in this year’s budget, only N32 billion was appropriated to the FERMA for maintenance of the roads and that does not guarantee the FERMA will get all of that. We are not doing anything as per maintenance.”

“There nowhere in the world where it is only the government that funds road maintenance, most countries have devised alternatives and we have given them these alternatives. Another major challenges on our roads are issues of excessive axle roads on our roads with lots of the trucks you see out there carrying excess loads and spoiling the roads.”

Oluyemi also questioned the government’s application of the axle load regulation it signed into law to ensure roads in the country do not suffer overloading by heavy-duty trucks. “The axle load regulation is also not implemented, and the laxities are there, but the government came and wants to toll roads. Who will pay for roads that are bad? It does not make sense.”