On a new road infrastructure system
THAT Nigeria has lost approximately N2.9 trillion in asset value as a result of poor conditions and non-maintenance of the nation’s roads is a huge loss, which should ginger development-minded economic managers to action, because a good road system is essential to economic progress.
With the increasing dilapidation of roads across the geopolitical zones, the plan by the Federal Government to establish a Road Asset Management System (RAMS), therefore, is a step in the right direction.
The plan, should however, be carefully formulated and implemented to revive the nation’s road system and keep it well maintained.
Lack of maintenance has been the bane of the nation’s road network, with a flawed administrative arrangement, unfortunately, being responsible for the ugly situation.
The new system, if well implemented, would amount to a complete shift, if not a revolution, whereby the roads would be managed like any other economic asset for value addition with a view to constantly improving their condition and enhancing national development.
Minister of Works, Mike Onolememen, revealed the new plan at the fourth edition of the Infrastructure Asset Summit held recently in Lagos. According to him, the new system, which would commence next year, is designed to reflect the best international practices in a way that suits local needs and conditions.
He said pressure on public funds to provide services to the growing population has implied a higher competition between the road sector and other social sectors such as education, healthcare and defence.
As a result, the maintenance and operation of roads have suffered from insufficient funding in the last decades.
Also, allocations for assets’ preservation have been so low that the situation has generally worsened over the last two to three decades, such that less than 50 per cent of road asset preservation budgets are met. The resultant loss in asset value, it has been noted, is such that the roads will need to be replaced at a much higher cost.
Reports indicate that the total asset value of Nigeria’s federal roads stands at $35 billion (N6 trillion), if all roads are restored to new condition. But actual current asset value (or depreciated value due to poor conditions) is $17 billion (N2.9 trillion).
This condition affects the asset value of the roads, which includes reduced transport costs, cost effectiveness, returns on investment and accountability.
Whereas, the issues raised with respect to road asset maintenance are critical, the minister’s assertion on funding is debatable, considering the huge amount of money reportedly allocated to road infrastructure, at least, within the last 16 years.
Meaning that, the problem is not only insufficient funding, but also poor use of funds allocated for roads without accountability and transparency. Corruption, to be precise!
For instance, there have been allegations of embezzlement of billions meant for roads’ development in recent years. To date, no one has accounted for the money, while designated highways are yet to be completed. The same scenario plays out in several other roads across the country. Experience however, shows that government alone is unable to build and maintain roads at the same time.
Perhaps, that informed the need for the Private Public Partnership (PPP) concept. Under this framework, roads are concessioned to private investors who then form partnership with government to execute critical road projects.
While some roads are being executed through this arrangement, the issue of who maintains the roads seems not to have been clearly spelt out.
That, once again, creates a gap. It is important for stakeholders to play defined roles in ensuring effective execution of road projects as well as their maintenance. Except that is done, roads would continue to be left unmaintained and the country will continue to incur losses.
It is important to stress that Nigeria needs investment in road infrastructure. Over the decades, the quantum of investments on road projects has not been enough to accommodate increased economic activities.
While the Federal Government puts up an appearance of investing, albeit unwisely and often times with dubious intentions on roads, most state governments do little to improve the road system in their domains.
When they do, it is largely with intentions of patronage and corruption. Also, many a time, there is contention over who maintains which road.
Some states are compelled to rehabilitate dilapidated federal roads in their jurisdiction and then face the herculean task of getting a refund.
The three tiers of government – federal, state and local councils – have clearly defined roles as far as roads are concerned, but none builds or maintains the roads as real assets. This must change if the nation would ever have a good network of roads and thereby improve its assets base.