Capital projects fund deficit to be bridged through PPP
By Jeph Ajobaju, Chief Copy Editor
A $100 billion deficit may hit capital projects by 2027, according to Infrastructure Concession Regulatory Commission (ICRC) acting Director General Michael Ohiani, who spoke in Abuja.
“We have a funding deficit of about $23 billion per annum, which will translate for instance in the next five years to about $100 billion, it is either we go through the national budget or we focus on the private sector as a means of raising funds.”
Ohiani was addressing a delegation who visited him from the Nigerian Shippers’ Council (NSC) led by Executive Secretary Emmanuel Jime.
Jime told him that the NSC promotes transport infrastructure, part of its core mandate, and most of the projects use the Public-Private Partnership (PPP) model.
“Interestingly,” Ohiani stressed, “if we look at the transport sector, 25 per cent of the required investment which represents about $775 billion will come from the private sector.
“There is a clear infrastructure deficit which remains a big challenge and underscores the fact that we need to aggressively work on up scaling our infrastructure assets.”
He insisted on the need to use PPP in bridging infrastructure gap, saying it is “a strategy that could be deployed in the transportation of goods to reduce over reliance on trucking which damages road infrastructure.”
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Road transport
Ohiani said road accounts for more than 70 per cent of cargo movement and transporting goods “by road using trucks is fraught with various challenges, including accidents, breakdown of trucks, illegal parking, congestion, as well as the wear and tear of the road.”
According to reporting by The Nation, he reiterated that the Transportation Ministry through the NSC is developing Inland Container Ports and Vehicle Transit Areas using PPP.
“The PPP model remains the best funding option for the development of these projects under which the private sector provides the funds and runs the project, while the federal government provides the regulatory framework.”
He urged Abuja to “make it mandatory for trucks and other articulated vehicles to make a compulsory stop at the vehicle transit areas after travelling for a period not exceeding six hours.
“The lack of funds has made it imperative for private sector to get involved in infrastructure development.
“Competing public needs coupled with dwindling resources would imply that there is not enough resources for government to undertake all development projects on its own.
“The module of development that engages the private sector is one to be encouraged and all of us who serve in the public service have also adopted it.”