Work is to commence in full as the duo of the Dangote Group and the Federal Government signed a landmark contract document, on Tuesday in Abuja.
The long awaited signing of the contract document is for the construction of a 42.5KM Obajana-Kabba Road in Kogi State.
The Permanent Secretary Federal Ministry of Power, Works and Housing, Engr Magaji Abdullahi Gusau signed on behalf of the Federal Goverenment while the Honorary Adviser to the President of the Dangote Group (Executive Director), Engr Joseph Makoju signed on behalf of the Dangote Group. Moakoju said said the signing of the road project is a milestone in the history of Nigeria.
The concrete road to be built by AG Dangote construction company will cost the Dangote Group N11.5billion but the job was awarded to the Group on tax concession basis at N5.24billion.
The difference of N6.2billion is part of the Corporate Social Responsibility (CSR) of the Dangote Group.
The Managing Director of the AG Dangote Mr. Ashif Juma said the contract duration is 24-month but the Dangote Group has set a target for its completion at 16 month.
It would be recalled that, as part of its CSR, the Dangote Group had commissioned the 26KM Itori-Ibese Concrete Road in June this year.
While briefing State House correspondents on the outcome of the Federal Executive Council meeting in Abuja recently, the Minister of Power Works and Housing, Mr Babatunde Fashola revealed that AG Dangote would be executing the road project in exchange for some tax remissions.
He said: “So, we presented a proposal by one of the subsidiary of Dangote group, a construction company, for the construction of a section of Lokoja-Obajana-Kabba-Ilorin road. “Specifically, the section between Obajana-Kabba Road using cement as demonstrative of how perhaps we should continue to build, going forward in order to reduce maintenance on the road and the company proposing to fund the construction of that section of the road in exchange for some tax remissions,’’ he said.
According to the minister, companies are ordinarily supposed to pay income tax, but there are existing policies in the nation’s laws which enable government to consider and give taxes incentives.
He, therefore, stated that the council’s approval for the construction of the section of the road was meant to address the increasing cases of road accidents occasioned by increased heavy traffic in the area.
“So, is a total economy policy which the Council considered and approved because it gives support to industry.
“It enables us take benefit of our tax law to renew infrastructure at a time where we are really challenged for resources to finance all our routes.
“It also enables us to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on that road for their livelihood would also benefit from the road,’’ he added.
It is important to stress that this is not a Dangote only issue, it is an existing tax policy that corporate or individual that makes investment on the infrastructure of a public nature should
The minister further explained that government would continue to promote economic policy that would stimulate investment in infrastructure renewal or in any other area that “government feels it needs private sector to complement its efforts in such area.
“So, the detail is about 30 per cent income tax obligation spread over time.
“It doesn’t mean they won’t pay tax, they will continue to pay their tax obligation but they will get remission for making this investment because ultimately the road doesn’t belong to them but to government and is for the benefits of Nigerians.
“So, is like credit advance to government.’’
