Mr Olayemi Shonubi is the Deputy President and past Chairman of the Nigerian Institute of Quantity Surveyors. He speaks with NKASIOBI OLUIKPE on some salient construction issues in Nigeria
In a layman’s language, tell us about the Executive Order 007 and what Nigerians stand to benefit from it?
Executive Order 007 on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, simply Executive Order 007, was created to leverage private sector capital and efficiency for the construction, refurbishment and maintenance of critical road infrastructure in key economic areas in Nigeria. It allows companies to utilise the total cost incurred on an eligible road project as a tax credit against their future Companies Income Tax liability, until full cost recovery is achieved.
The benefit to Nigerians is the elimination of the various bottlenecks associated with government contract awards and payments, while also bringing in the private sector efficiency into play. Usually there are bureaucratic processes involved before funds are approved and released for construction projects embarked upon by government – from initiation in the Ministry of Works to approval at Federal Executive Council to appropriation by National Assembly. Even where the funds are appropriated, getting cash backing for the same is also another issue.
At the National Assembly, the legislators may decide that, rather than spend the huge sum proposed on just one road, to spread it across the country on smaller projects. The Lagos-Ibadan Expressway and Ibadan-Ilorin Road are typical examples of such government projects that have suffered from such bureaucratic bottlenecks, the reason they remain uncompleted years after.
But in line with Executive Order 007, companies can finance road construction and/or rehabilitation and defray the total costs from CIT payable by them.
A typical example is one of the roads approved under the scheme which is being undertaken by Dangote Industries from Apapa Port to Toll Gate in Lagos. The construction duration was relatively short compared with similar ones undertaken following typical government bureaucracy.
Since it is a private sector-driven initiative, it is easy for them to eliminate bottlenecks and reduce the duration period. The shorter the construction period, the lower the cost of construction.
But I thought provision is usually made for the unforeseen in contract biddings?
Yes, while you make reasonable provision through contingencies, sometimes the Nigerian situation, it is so difficult to predict, particularly with respect to value of naira against other international currencies. If you project for 30 per cent naira devaluation in your bidding and it actually falls by 50 per cent, who bears the difference?
This Order was passed in January 2019. From your personal assessment, how would you rate its performance? Have corporate bodies been keying into it?
I can confirm that the Apapa-Tollgate Road is almost completed, while Bodo-Bonny Road which is being executed by NLNG is in progress and I can tell you, it is a good step in the right direction. Since the funding for the projects are coming from the private sector, the monies go into the project with minimal leakages and the ultimate beneficiaries are the people.
Maybe, if the money was paid to the government’s coffers as taxes, most of it would have been embezzled or stolen rather than used to construct the roads.
I was expecting that by now, we will be hearing big names keying into it. What exactly is happening?
I know that under the pilot phase of the scheme, six private sector players namely Dangote Industries Limited, Lafarge Africa Plc., Unilever Nigeria Plc., Flour Mills of Nigeria Plc., Nigeria LNG Limited, and China Road and Bridge Corporation Nigeria Limited are expected to construct or rehabilitate 17 roads.
Like I said, I have seen the activities of Dangote Industries in Lagos and am aware of NLNG in Rivers State on Bodo -Bonny Highway.
Considering the degree of corruption in the system, isn’t there supposed to be a body superintending over the performance of the Order to ensure transparency and proper accountability?
Under the Order, there is only the Road Infrastructure Development and Refurbishment Investment Tax Scheme Management Committee, which is to be chaired by the Minister of Finance with the Minister of Works as Deputy Chairman, while the Permanent Secretary of the Ministry of Finance is the Secretary of the committee. They are charged with the responsibilities of implementing and administering the scheme. They are also tasked with ensuring the elimination of whatever bottlenecks that may impede the smooth implementation of the scheme.
No independent body?
No. The only independent body will have to be the National Assembly, which has oversight function and is to ensure that the value of the project is actually commensurate with the cost allocated under the scheme.
Why is there so much criticism of the Public Private Partnership initiative in Nigeria? People are of the view that it is not working?
The only one reason why PPP is not working in Nigeria is because there are people in and around the government who do not want it to work. With PPP, there are no bribes and kickbacks because government monies are not required. For the private investors who are seeking to make money out of their investments, there is little or nothing to offer upfront which is usually the demand of those in and around the government. But with the government-funded projects, so many shenanigans occur.
With the PPP, it is only the Infrastructure Concession Regulatory Commission and depending on project, the BPP, that has the right of oversight on behalf of the government.
Have engineers and quantity surveyors finally found a common ground on the issue of Bill of Engineering Measurement and Evaluation and Bill of Quantities?
To be honest with you, it will be difficult. I think, until we all decide to act professionally and in the best interest of our nation, the country and the average Nigerian will continue to suffer. It is only in Nigeria, that BEME is used. If you check the Contract Conditions by FIDIC, an international body of Consulting Engineers, as well as those by the Institution of Civil Engineers in UK, the term used in those documents is Bill of Quantities not BEME. You just begin to wonder where BEME came from. Nigeria is a Commonwealth nation and what you have and is in use in all Commonwealth countries is Bill of Quantities, even in Ghana next door. It is only in Nigeria that we have BEME.
BOQs are usually prepared based on a stated standard method of measurement such that if a bidder picks up the BOQ, he will know how you arrived at your quantities and can easily price same. I am not aware of any standard method of measurement upon which BEME is based.
As far as engineering projects are concerned, that issue has not been resolved. We are hoping that very soon, we will be able to sort things out. We, (I mean construction professionals), should do what we need to do professionally, without sentiments but with the desire to give optimum value to the clients.
What are the challenges facing quantity surveying practice in Nigeria?
The challenge is mainly due to the fact the quantity surveying as a profession was a late entrant. As such, most people are not benefitting from using the services of quantity surveyors because they do not even know what we do. Quantity surveyors are construction cost experts who assist their clients in realising their dream projects at optimal costs. I know for a fact that in most cases, people spend more than they should on their projects because they do not engage a quantity surveyor. Many private projects have been abandoned because the sponsors, having not engaged a QS, could not meet the financial demands of same.
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