NNPC Hands Over N621bn Infrastructure Tax Credit to Works Ministry

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By Chibisi Ohakah, Abuja

Nigerian National Petroleum Corporation (NNPC) has handed over to the ministry of works and housing the sum of N621 billion representing the recent tax credit, road infrastructure funding arrangement approved by Nigeria’s federal executive council (FEC).

The road infrastructure funding arrangement comes under Executive Order 7, which existed during the administration of former President Ebele Jonathan, was never deployed. The credit intervention is essentially the private sector company putting forward what should have been its tax compensation for liabilities to government.

At the ‘cheque’ presentation event last Tuesday, minister of works and housing, Mr. Babatunde Fashola said that the instrument was first activated on the Obajana-Kabba road as well as to address the Apapa-Oworonsoki expressway in Lagos.

He dispelled insinuations that the NNPC was taking over the job of the ministry, pointing out that when the government started the use of Executive Order, it was met with a lot of criticism that it was specifically made for Aliko Dangote, but added that even smaller companies can now come together to do smaller roads.

“So, this is not an order for one person, it is an order for all businesses and we are now seeing that a conglomerate like Dangote Group and now the oil industry has come in to cover 21 roads of about 1,800 kilometres. That is massive and it’s a show of confidence by the NNPC,” he noted.

Then minister hinted that Nigeria’s telecom sector sector had also begun to show interest in the arrangement as a strategic expansion of the private sector to the development of the Nigeria’s infrastructure.

He said there will be no review in the future. “We have agreed that nobody will be asking for a variation. We have put in a governance process which allows us to do certification within a certain number of days. The NNPC will have no more than 30 days to pay,” he said.

Fashola stated that this new redefinition of project funding in the sector will enable contractors order more materials and machines and roll out work, adding that by the end of the dry season, people will begin to see the intervention of the NNPC.

He clarified that the NNPC was not taking over the construction of Nigerian roads, saying that it’s only putting in its tax liabilities to the Federal Inland Revenue Service (FIRS) which is being devoted to the roads.

“NNPC is not taking over roads, NNPC is not constructing roads, NNPC is just putting forward its tax liabilities to the authority which is supposed to collect, which is the FIRS, and they are dedicating it to build roads that have been awarded and would have been completed but for insufficient budgetary provisions.

Also speaking, group managing director of the NNPC, Mallam Mele Kyari, described the initiative as remarkable because of the difference the funding will make in the country’s roads.

The NNPC boss who was represented by the group’s chief financial officer, Mr. Umar Ajiya, explained that due to the incessant vandalism of the NNPC’s pipelines, the national oil company had resorted to hauling products by road.

“This is a very remarkable event simply because the condition of the road network in the country is affecting our business in our quest to participate in the energy security of Nigeria.

“We are charged with the responsibility of wetting the country with petroleum products but most of our pipelines have been vandalized over the years which has resulted in the haulage of these products to trucks along some of these national road networks.

“These roads have also suffered some failure over the years and sometimes we find it difficult to pass the road. It is on that note, that we found it necessary and very important to step in to support the federal ministry of works in funding these number of these roads,” he explained.

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