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UPDATED: Mixed reactions trail NNPC’s road reconstruction decision

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Oredola Adeola

 

Experts have expressed varied opinions concerning the recent pronouncement by the Nigerian National Petroleum Company, (NNPC) to reconstruct and rehabilitate about twenty-one (21) Federal roads across the country.

Speaking with EnergyDay on the issue, a key stakeholder in the nation’s oil and gas industry, Engr. Alex Neyin, Chief Executive Officer, CEO, GACMORK Nigeria Limited, refers to the move as that of a misplaced priority.

Engr. Neyin, who is a former Director at Chevron Nigeria, insisted that NNPC as a public institution cannot independently carry out a good road project, adding that the Corporation was a prove of a failed political system.

He, therefore, urged the NNPC management to focus on addressing issues facing the petroleum industry, calling for the participation of professionals and transparent private institutions in driving the sector’s development.

“The planned actions of the NNPC is a true reflection of the failure of the Federal Government and the Federal Ministry of Work and Housing. It is an embarrassment to the government that has refused to fulfill its obligations to the Nigerian people.

“NNPC as it is presently constituted as a limited company is still wearing the toga of its old self. It has proven to be a poorly managed government institution. There is no guarantee that it will get better.

“Look at the board and the new Chief Executive Officer, as presently constituted, are these not the old set of people who have mismanaged the corporation? The members are regular politicians, who have been reappointed from the old block.

“These are the same people who want to compete with private organisations with income tax. Nigerians should not expect anything good from the political board.

“The road reconstruction is a face-saving scheme that will never come to fruition.”

On his part, Dr. Muda Yusuf, Economist/CEO, Centre for the Promotion of Private Enterprise, (CPPE), warned that NNPC’s choice of road construction should be guided by their economic importance.

He noted that the Corporation’s road intervention will not only benefit the tanker owners and drivers, but the entire economy, as well as unlock the huge potentials of the Nigerian economy.

He said, “It is a great idea. It is innovative as well. We have seen similar initiatives by Dangote Industries. If there is anything we need to unlock the huge potentials of the Nigerian economy, it is infrastructure. This includes roads, railways, power, waterways, ICT, etc.

“Funding has remained a major constraint. Therefore, we should applaud the tax credit initiative. It has the added advantage of ensuring value for money for the projects because it is coming under a Public-Private Partnership (PPP) framework.”

Director-General of Manufacturers Association of Nigeria, MAN, Segun Ajayi-Kadir, warned NNPC not to spare any efforts in ending bad road networks, which he described as the longest-standing problem confronting the manufacturing sector in Nigeria.

Speaking with EnergyDay, he said, “NNPC’s attempt to improve infrastructure is a welcome development that would influence economic recovery if executed at record time. Although there have been interventions by NNPC in the power sector without much impact.

“We only wish this attitude will not be replicated in the case of road reconstruction. We needed this road since yesterday. There should be no effort spared in ensuring that this cheery news is brought to fruition.

“Poor state of roads across Nigeria has made it difficult for manufacturers to maximise returns, as it has limited operation costs in the sector.

“Poor quality of road and inadequate electricity supply have contributed to the high cost of production in Nigeria.
“Road infrastructure is a key element in trade facilitation both for trade and commercial activity. The absence of good road infrastructure has limited logistics for movement and persons, especially those in the manufacturing sector.

“For us in the manufacturing sector, the project is key in terms of moving and receiving our goods to and fro the market. The roads are significant for the growth of the economy, as they help link industrial areas to the market and source of supply including the ports. The intervention by NNPC is coming at the right time when the cost of production is getting much higher.”

He noted that the Nigerian government would earn more revenue through taxes if the working capital in the manufacturing sector is significantly reduced with a quality road network.
He, therefore, urged NNPC to ensure that the road network stands the test of time.

Meanwhile, Mr. Chinedu Okoronkwo, National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), sees the initiative as a challenge for the national oil company to prove its competency and capacity to effectively compete with every other private investor in Nigeria.

In his opinion, the intervention was in order, stressing that it would help improve the supply of petroleum products nationwide.

According to him, infrastructure has always been a major bottleneck in the distribution of petroleum products across the country. He decried the loss of its members and equipment to the deplorable state of roads across the country.

He said, “It is commendable that NNPC which is now operating as a corporate national oil company has agreed to redirect its income tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) on road reconstruction in the same way Dangote was offered tax credit certificate.

“This is a welcome development, because the Federal Ministry of Work, has failed in its capacity to fix the roads. So NNPC’s action is another way for the government to address infrastructure, and find a permanent solution to this national catastrophe.”

Okoronkwo noted that NNPC limited has the financial muscle to intervene in road reconstruction, instead of wasting funds on other non-essential matters. He said road reconstruction by the Corporation could help Nigeria get to another level of infrastructural development.

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