The Federal Government’s planned reintroduction of toll gates on the roads has thrown up the issue of extra road financing fund to keep the roads in good shape. However, experts are of divergent views on the return of road toll collection, writes OKWY IROEGBU-CHIKEZIE.
Eighteen years after its abolishment, toll gates are returning to the roads. The announcement of the return by the Minister of Works & Housing Babatunde Raji Fashola, has, however, generated reactions from stakeholders who have argued various positions.
For some, it is a welcome development that will ensure that the roads are in tip-top shape. This is because the revenue that will be generated from the tolls will present the government with more than enough revenue to maintain the roads. One of such stakeholders is the immediate past Director-General, Lagos Chamber of Commerce & Industry (LCCI), Dr Muda Yusuf.
Best practice
Yusuf, an economist, argued that if the country must have good roads, then the creation of funding sources outside the budgetary allocations is inevitable. According to him, the best practice in most parts of the developing world is to create frameworks to generate revenue outside of the normal budgetary allocations for the development of road infrastructure.
Canvassing a sustainable financing structure, he maintained, that the creation of a Road Fund earlier contemplated in the National Road Fund and Federal Highway Authority Bill is a more sustainable solution to the funding challenge for our roads as practised in most parts of the world.
Yusuf explained that it is a principle which sets aside a percentage of fuel price for financing road maintenance, rehabilitation and construction, which is utilised to cover all roads, not just the federal roads.
“We have an estimated 34,000 kilometre of federal roads, over 30,000 kilometre of state roads and over 85,000 kilometre of local Government roads. The approach should be holistic. Although it may be politically difficult to push at this time, it offers a more enduring and sustainable solution to road financing. The cost of collection is much lower, the potential revenue yield is much higher, and monitoring will be much easier,” he added.
According to him, these complementary funding options will demand some sacrifice from citizens. But the potential outcome is worth the sacrifice. He however sought transparency and accountability in implementation.
“Good roads would boost productivity in the economy, reduce travel time, reduce transportation costs, reduce cost push inflation, improve domestic connectivity of economic players, and, ultimately, improve the living standards of the people.The policy deserves to be given every support to make it succeed. The proceeds will be used for the maintenance of the road. Although the details have not been made public, I expect that the proceeds will be collected directly by the concessionnaire and utilised for the maintenance,” he said.
Another economist, Prof Pat Utomi, agrees with Yusuf. According to him, the decision to scrap the toll gates was unwise because not only were they scrapped, the government spent 10s of millions of dollars knocking them down. He regretted that it had taken the country 18 years to realise it made a wrong decision and also that we could not maintain the highways.
“In principle, I have no problem with tolls; they should never have been removed. It is not right; it is an unreasonable use of scarce resources in a country where people are so poor, even if the elite live recklessly on public resources. Secondly, tolls money should not go into the treasury; it should be specific-use tax for maintaining the highways. And there should be a monitoring committee of users of the highway; for example, members of the Nigerian Society of Engineers and the association of drivers that ply that highway, among others. Their business is to make sure that every kobo paid on that highway is used to make sure the highway is maintained,” Utomi said.
Still, the President, Nigeria Institute of Town Planners (NITP), Toyin Ayinde, said the implications of the planned tolling on major highways would depend on the angle from which one views it. ”Do not forget that we had the toll plazas years back, but they had to be dismantled because of the fraud surrounding the operations.While we are not certain of the format it would take, it is noteworthy to observe that tolling major highways is a global phenomenon, albeit devoid of the kind of frauds that we experience in this part of the world,” Ayinde noted.
He, nonetheless, agreed that tolling the roads would provide the platform to receive some return on investment over time and the investor, which is the government in this case, is able to recoup the capital outlay on such projects.This is beside its other benefits, which he listed to include making maintenance of such roads easier since there is a daily income derived from payment made by the volume of road users. Besides, its success at generating revenue can also help in the funding of more roads as the network can be expanded since there would be funds to finance them. Importantly, the use of the highways, the NITP president noted, would also rekindle some kind of sense of ownership to the users and they are more likely to protect the use of the roads, rather than abuse them. “It is presumed that the income generated would be judiciously applied to keeping such highways in good shape,” he added.
Wrong move
Others, however, said it is insensitivity of the government to contemplate, not to talk of implementing such a policy at this critical time of hardship being experienced by the citizens. This, they maintained, is a sharp contrast from the era when tolling was first introduced on the roads in the 1970s, when the economy blossomed in the thick of the oil-boom era. They contend that the purpose then was that while the money realised from the sale of crude oil internationally would be used to build critical infrastructure like roads, bridges and highways, the money generated from tolling would be used to maintain them.
Yet, other stakeholders are worried that the reintroduction of toll gates is tantamount to the government indirectly reintroducing corruption into the system. According to this school of thought, the abolition of the toll gates in 2003 by former President Olusegun Obasanjo, was basically because its essence was defeated owing to an alleged widespread corruption that ravaged the system and the collection of tolls. Money collected at the toll plazas was said to have ended up in private pockets.
For instance, a past Chairman, Nigeria Institution of Estate Surveyors & Valuers (NIESV), Lagos State Chapter, Dotun Bamigbola, argued that the planned reintroduction of toll gates on some major highways is another form of double taxation. He stated this on this premise of what led to the cancellation of tolling during the administration of Obasanjo, including a road tax in the pump price of petrol then that ensured consumers of the commodity, either plying a tolled road or not, will pay for using the road once you buy fuel.
He noted that with so much changes in the prices of fuel over the years and heavy subsidy, it look more reasonable to have key roads tolled for collection of funds towards basic maintenance of these roads.
He said: “I don’t think it is appropriate to go back the old way of physical toll gates. Rather, electronic tolling should be adopted. It will remove the human error or elements of corruption, poor accountability, poor management and traffic jams, that affected our previous tolling booth experience. There will also be less loss of travel time on the roads, while eliminating the need for contracting the job to some people that will operate on physical ticketing.”
Govt’s resolve
But Fashola, determined to proceed with the policy, explained that there was the need to have a kick-off policy, which necessitated the classification of vehicles into five categories- cars, SUVs and jeeps as a second category; Private and commercial buses as third and fourth and then luxury buses and trucks as a fifth. These vehicles will pay between N200 and N500 per trip depending on the capacity of the vehicle.
“So, the start-off tolls that we have for financial modelling and investment decision making, cars will pay N200, SUVs and Jeeps will pay N300, private buses will pay N300, commercial buses will pay N150, luxury buses and trucks will pay N500. Some of these prices were recommended by the operators themselves following my meeting with them, while some of them were also obtained from a survey we did across the six geo-political zones, talking to households and talking to people in the garages, motor parks and all of that, which was quite extensive. We covered about 17 or so states or 22 states out of the national framework just to get a sampling of what people felt,” Fashola explained.
No exemption
Yusuf, however, warns that the idea of exempting some categories of road users such as military and paramilitary and other MDAS may create implementation, compliance and enforcement challenges.We have multitudes of these agencies and institutions across the country and at all levels of government he stated. He called for the review of the exemption as the risk of abuse is high.
He said: “We should also move away from the culture of government agencies or their personnel not paying for public utilities. One of the biggest challenges facing the power sector today is the huge indebtedness by the military, paramilitary and other government agencies who do not feel obligated to pay for electricity.We should put an end to this culture.’’
Similarly, Utomi lamented the culture of some people being above the law. In many ways, it is an assault on the rule of law but they think it’s the privilege of power. He asked the government departments to budget for their toll payment and cease from having entitlement mentality, because they’re in government.
Security
Going by the alarming security challenge, some stakeholders have warned about the looming security threat the toll gate plaza will cause given the slow down and traffic congestion usually associated with toll gates in Nigeria. This is why there is a call for security to be beefed up at such plazas to provide effective security cover for those that will man the toll plazas and other users.
Managing Consultant/CEO Afolabi Adedeji & Associates, Afolabi O. Adedeji, though lend support the tolling of roads, he is concerned about security issues at the toll plaza.
Adedeji, a civil engineer, therefore, stressed the need to ensure the presence of security operatives at the toll gates that will enhance safety of federal highways and provide an additional deterrent to robbers, marauders, kidnappers, among others.
Leakage, incentives
Adedeji fears that the problem of leakage, if not properly handled, would pose a very big challenge for the revenue collection.”The problem of ‘leakage’of proceeds from the sale of toll tickets and electronic tags may surface, so the government needs to work on this. Although no system is perfect, the government must avoid the pitfalls of the past where the tolls collected were diverted into private pockets rather than being used to maintain the roads,” he warned.
He advised that the government or operators of the scheme should encourage the use of “Electronic products as well as electronic channels of various banks for toll payment.’’ This option, he further explained, should come with incentives of accessibility to make faster passage through the toll gate(s) to avoid traffic snarl, and or even a discount on the cost charged a vehicle when using electronic means of payment. ”For instance, a vehicle paying electronically can be given a 25 percent discount. This will encourage more people using electronic channel and it will save government the problem of the money going into private pocket since the personnel at the toll gate won’t have access to touching the physical cash,” Adedeji added.
Yet, Adedeji, a former NIESV’s President, further advised: “On certain highways, “Amnesty periods” may be introduced for vulnerable socio-economic groups, such as market women, farmers, school children, as well as those on essential services. Between 4:00 AM and 5:30 AM for example, persons in this special group may be exempted from paying tolls. This will certainly reduce hardship and minimise public outcry against the policy of toll collection.”
He warned against what he called the “neglect of regular maintenance” which he said is “a bad habit that may be ‘relapsed into’ if care is not taken, advising that programmes and policies must be put in place so that any facility on which tolls are being collected remains in its original condition as constructed (or as is subsequently improved).”
Indeed, while the toll regime appears a stark reality staring Nigerians in the face, without ensuring this last bit of advice from Adedeji, Nigerians may end up seeing this reintroduction of the tolls as another government punishment or insensitiveness to her citizen’s plight.
