Banker proffers strategies for effective investment in truck parks

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By Godwin Oritse

MANAGING Director and Chief Executive Officer of Infrastructure Bank Plc, Mr. Adekunle Abdurazaq has said that a holistic policy framework will create a stable long-term stream of investment opportunities in transport infrastructure and engender the full socio- economic and environmental growth.

Speaking at the summit on “Establishment, Management and Operation of Transit Truck Parks”, Abdulrazaq said that a comprehesive and duly harmonised policy positions be considered in the National Roads Fund and Federal Roads Authority Bills, presently still in draft form, to ensure consistency and ease of implementation.

In his paper entitled “Proffering Feasible Financing Options for Truck Transit Parks, Abdulrazaq suggested that the policy documents must clearly delineate institutional roles and responsibilities among government parastatals, regulators, industry players and stakeholders, to ensure transparency and accountability.

The Infrastructure Bank boss noted that deficiencies in effective implementation, rather than a dearth of plans and legislation, are the primary shortcomings, from a national planning perspective adding that if the nation is to reverse this trend, Nigeria must imbibe strategic goal-setting and policy alignment to help create a stable long-term stream of investment opportunities in transport infrastructure.

He said, “Funding for transportation infrastructure in Nigeria has generally been sourced from the traditional budgetary allocations, donor-financed loans and other funding sources such as concessionary loans. This near-total dependence on public funds makes funding largely precarious and unpredictable. Without adequate and stable flow of funds, construction, rehabilitation and maintenance schedules and programmes cannot be sustained.

“Given this reality, and in view of government’s funding constraints, it is evident that a mix of funding from both government and private sector sources is a necessary solution to be exploited more rigorously. Whilst government-funding sources include traditional on-budget funds, as well as internally generated revenues, private sources are relatively less conventional and could be in various forms, which would include financial institutions, private equity, infrastructure funds and bonds, public private partnerships – private finance initiatives (PFIs), concessions and other variants.

Long-term funding requirement

“To ensure a holistic approach, these diverse funding sources should be aggregated into a cohesive, comprehensive Financing Plan to serve as a guide for the implementation phase. The National Integrated Infrastructure Master Plan provides the medium to long-term funding requirement for the transportation sector. The funding plan for the transportation could be honed and adapted to new and emerging realities of the transportation sector, following which it should be integrated within the FGN’s Medium Term Expenditure Framework (“MTEF”) to help ensure adequate funding in future”.

On project bankability as a precondition for private participation in infrastructure finance, he explained that “Where government is desirous of attracting private investment for the development of Truck Transit Parks (as well as other infrastructure assets), the desired structure would be for the government to partner with private investors to deliver economically-viable projects, wherein the investors take on financing, development and operating risks, whilst the government maintains regulatory oversight of the sector. Under this model, the private sector plays the crucial role of plugging funding gaps, as well as instituting efficient operation and maintenance regimes, post-construction, to ensure return on investments, in a sustainable manner.”


The post Banker proffers strategies for effective investment in truck parks appeared first on Vanguard News.

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