Proposed tolls on federal highways
GIVEN Nigeria’s experience with toll management in the past, the public apprehension surrounding the possibility of re-introducing tolling on selected federal highways nationwide is not surprising. On one hand, it is feared that the toll may be unreasonably high, and could redound on the market prices of goods, thereby worsening the economy for the average Nigerian. Serious questions also remain on the management of tolls collected in the past. Were the proceeds used to maintain the roads in issue? It is also disconcerting that a past administration spent huge public fund to dismantle the tollgates nationwide supposedly to pave way for an increase in fuel price that would incorporate a road maintenance percentage. The larger question, therefore, is whether the new plan is taking cognizance of these matters arising.
While disclosing official thinking to revert to tolling, Works, Housing and Power Minister Babatunde Fashola (SAN), pointed out the glaring insufficiency of budgetary allocations for maintenance, upgrading and management of 36,000 kilometres of Federal highways; the longest in Africa. He explained that the highways sector had 206 ongoing projects with a total cost of N2 trillion. The budgetary allocation for 2015 is a little over N18 billion out of which the ministry expended N15 billion. Historically, he reported that the highest ever annual budget for roads was N200 billion in 2002.
In reaction, the Nigerian Institute of Highway Engineers supported the proposal but called on the National Assembly to pass the Road Reform Bill. Some people also raised issues about “taxation” without visible benefits to the populace. Others cite the universally accepted principle requiring availability of alternate routes. There was also the fear of the ripple effects of increase in transport fares and food prices. What is needed is transparency by government. Public enlightenment will douse likely resistance to road user contributions. The minister also promised, notably, that leakages would be reduced by applying latest available technology. The minister came to his assignment with the experiences of the concessionaire’s tolls on Lekki Expressway and the Lekki-Ikoyi Link Bridge.
However, a study of the challenges of funding roads in Nigeria has in the past indicated that tolling is a miniscule part of the needed funds; and that there may be a necessity for a body for the planning, construction, maintenance and management of the federal highways, and also give support to states’ road projects based on given criteria and on the principles of matching fund.
Although there had been tolls on community-erected stream crossings (e.g. Ajegunle to Marine Road Apapa), the Lagos-Ibadan Expressway (Federal Route 20) was the first tolled Federal highway in Nigeria. It was part of the condition for its funding by the World Bank. Tolling was later extended to other federal roads nationwide. The Federal Ministry of Works set up a Federal Toll Plaza Management Committee which deployed its officials to collect tolls and later contracted out to handpicked companies which were allowed to take a percentage. But there was no correlation between the funds generated and road maintenance because payments were domiciled in the Consolidated Revenue Account of the Federation; while money for road maintenance and management had to come from annual budgetary allocations.
The tolls were scrapped on January 1, 2004 by then President Olusegun Obasanjo, and toll plazas demolished at a cost of N430 million. One of the reasons adduced by the Works Minister Ogunlewe at the time was the paucity of funds realised from the toll plazas, while the government intended to implement a road user charge per litre of premium motor spirit and diesel; to take off in January 2004 and given to Federal Roads Maintenance Agency (FERMA).
Government set up Federal Roads Maintenance Agency, which experts decried as akin to “a baby before its parent agency.” Funding had been its problem from inception in 2000; while there was a duplication of officials for federal roads; with FERMA handling routine maintenance and the Federal Highways Division handling major rehabilitation such as the Lagos Ibadan Expressway and the Sagamu-Ore-Benin City Expressway.
The idea of tolling has to be considered within the ambit of a holistic package to generate adequate funds for roads maintenance, such that regular road users are not over-burdened. The private sector, as well as individual citizens, will certainly play a role in this regard, while care must be taken to ensure that tolling does not directly or indirectly worsen the economy. The regular flow of funds (from tolling) provides the confidence for financial institutions to provide long-term instruments for road programmes.
While it is recognised that roads constructed on Build, Operate and Transfer (BOT) basis will necessarily attract tolls, this must be reasonable and acceptable to all stakeholders. Tolling on roads should never be taken merely as an avenue to generate revenue for government at the expense of the populace. To correct negative impressions arising from past mishandling of proceeds of tollgates, money realised should be spent strictly for roads maintenance; partly in fulfillment of government obligations, and to encourage the road users who pay the tolls. As much as possible, alternative roads should be developed so that those who are unwilling to pay tolls are not coerced. Government should not abdicate its responsibility to the people; and this it can ensure by putting public interest as its ultimate consideration in any revenue drive, including tollgates on roads.