The World Bank yesterday said it had approved a credit grant totaling $390 million (about N45 billion) to assist in the development of Nigeria’s road transport sector.
World Bank’s financial support came in the wake of President Umaru Musa Yar’Adua’s approval for the take-off of the Infrastructure Concession Regulatory Commission (ICRC) next month.
The Country Director of World Bank in Nigeria, Mr. Onno Ruhi, at a stakeholders’ workshop on the road sector reform held in Abuja, said the bank’s offer is a demonstration of its commitment towards the development of the country’s transport sector.
“I am happy to announce that as a demonstration of our continued commitment towards Nigeria’s transport sector this quarter, the bank approved a credit totalling $390m (equivalent to over N45bn),” he said.
The Director whose address was read by a senior official of the Bank, Mr. Justin Runji, said $330 million of the credit facility is to be used to support the Federal Government in the introduction of long-term performance-based contracts under the Federal Roads Development Project, while the balance of $60 million would be deployed in support of Kaduna State’s rural transportation projects.
He said Kaduna is among the first of the states that would benefit from the World Bank’s support for rural access and mobility projects.
Speaking on the efficacy of the proposed Road Infrastructure Fund being planned under the sector reform, the World Bank Director said the measure would provide a favourable environment for the roll-out of the PPP in the road transport sector.
In addition, Ruhi said road users would play more role not only in contributing to the funding of road projects, but would have the opportunity to demand roads that are commensurate with the resources available to the new agencies.
“We believe that these reforms will result in many significant improvements in road management including budgetary savings, more streamlined bureaucracy, increased professionalism, greater transparency in procurement and a more strategic approach to road planning and financing”, he said.
The World Bank scribe, however, warned Nigeria against some noticeable pit-falls that might rear their ugly heads in the course of the implementation of the new scheme, which ranges from poor financial management, absence of independent audits, use of funds for unauthorised expenditures to outright diversion of funds and weak oversight.
Vice-President Goodluck Jonathan, who represented Yar’Adua at the event, said an approval had been given for the inauguration of ICRC to fast-track the actualisation of government objectives in the road transport sector.
“We want to assure that the Infrastructure Concession Regulatory Commission Board would be set up not later than next month to fast track the attainment of the country’s goals,” he said.
The ICRC Act of 2005 provides the legal framework for private sector finance, construction, development, operation and maintenance of infrastructure and development projects of the Federal Government through concession and other Public-Private-Partnership (PPP) contractual arrangements.
Yar’Adua noted that due to the prevailing economic realities in the country and worldwide, it had become clear that “government can no longer perform the function of a regulator and yet, remain responsible for the maintenance and development of road infrastructure”.
“The need for comprehensive reform in the management of our roads is now more urgent than ever. This reform must create an enabling environment for Public-Private-Partnership (PPP) and involve road users in the development and management of our roads,” he said.
The President spoke of the administration’s plan to evolve inter-modal transport strategies that would address the infrastructure development challenges facing the railway, inland waterways and air transport.
He said funds would soon be released for completion and commissioning of the remaining 19km stretch of the Ajaokuta-Itakpe-Warri standard gauge line while the existing railway lines linking the seaports and inland container depots are to be reactivated and put to immediate use to reduce congestion at the ports.
While commending the operational improvement recorded by the new private managers of the country’s seaport, Yar’Adua tasked all government ministries and agencies to step up action to achieve greater private sector participation in delivering efficient services to the people.
Minister of Transport, Mrs. Diezani Alison-Madueke, while welcoming participants to the workshop, said road transport was not only a key pre-requisite for the country’s economic growth but also very critical to the attainment of the Millennium Development Goals (MDGs) and the administration’s seven-point agenda.
She said Nigeria has an extensive road network of about 200,000 sq km with a replacement value that stood at N4.567 trillion.
According to her, the current poor state of our roads could be attributable “to lack of appropriate institutional and legal framework, unpredictable and inadequate funding and lack of maintenance culture”.
She said the target of the workshop was to work out a clear strategy for implementing the various reform initiative in the road transport sector.