VIDEO STILL: Bisi Adebayo, Anchor and Teslim Shitta-Bey
Click to go to video.
The September 21, 2020 REPORT from Proshare Economy titled “Roads: Concrete Vision, Asphalt Competition, Looking Ahead” (see highlights below) was widely received by market stakeholders, the investment community, policy makers, and political leaders. On September 23, 2020, Channels Television ‘Business Morning’ interviewed Mr. Teslim Shitta-Bey, Managing Editor and Chief Economist, Proshare-Nigeria, where he discussed critical aspects of the report and Nigeria’s vision for the future, touting concrete as the superior choice.
Shitta-Bey gave highlights to Bisi Adebayo, Anchor–WebTV NG Courtesy Channels Television, while he discussed the importance of the construction industry as a major employer of labor in the country. He also highlighted the need for the Nigerian government to explore a sustainable approach to road construction with components that are durable like concrete.
Shitta-Bey underscored the fact that roads
constructed with concrete could last between
25 and 30 years without the need for
major reconstruction work or repairs.
He stressed the fact that on the basis of socio-economic cost-benefit analysis, concrete roads provide superior returns on social capital outlays in the medium to long-term, even though competing asphalt roads may also show positive net social present values. The longer the road is expected to last, the higher the net present value of concrete (rigid pavements) over asphalt (flexible pavements).
To view the VIDEO and read the (Sept. 23) article titled “Reimagining Nigerian Road Construction; The Need for a New Approach”, please go to: www.proshareng.com/webtvchannels/Economy—Politics/3631/1
Click to go to in-depth report
Highlights from the September 21st REPORT “Roads: Concrete Vision, Asphalt Competition, Looking Ahead”:
Splitting hairs over road construction has been a classic challenge in Nigeria over the past two decades as poor road infrastructure continues to plague domestic supply chains and hurt manufacturing competitiveness. Nigeria’s notoriously bad roads have led to considerations of appropriate road construction material and the best models for road financing. A kilometer (.62 mi) of asphalt road in Nigeria is currently estimated to cost Nigeria Niera (N1bn) which equals about 4 x the average cost of a kilometer of an asphalt road on the African continent. So far the most reasonable road solutions have remained unclear—choices have been weighed more by political expediency than financial prudence.
In a “post-COVID-19” reality, there will be a need for creative financial solutions to grow fresh social capital—roads, bridges and highways—and require resources to be used efficiently and effectively. To bring this to fruition, multiple levels of governments may need to cut back on pork-barrel budgeting and expenditure while establishing project protocols that guarantee service-for-value in line with best global practices.
The big question for road construction in Nigeria is increasingly, how to build roads to last at the lowest market-driven cost? Is the economic choice between cheaper but less durable roads and costlier but longer-lasting highways? Or is it a matter of optimizing road cost considerations over longer time frames on a cost-benefit basis? The answer is BOTH, as road construction needs to involve longer-term considerations as the private sector weighs in on improving physical public infrastructure.
Project cash flows would need to be determinable and adequate; the new normal will require roads be sufficiently durable and last for 20 to 25-years; there will be a need for durability … should Nigerian roads be asphalt or concrete? Read more on asphalt ….
Does Concrete Fix The Problem? The cost of construction alternatives to asphalt is only marginally higher in nominal terms… An asphalt road would last 2 to 3 years before major reconstruction and repair work becomes necessary—one season of heavy rainfall in Nigeria causes road degradation as oxidation of road shoulders to cause erosion.
Concrete roads:
• More durable than their asphalt cousins
• Last between 25 and 30 years without the need for major reconstruction work or repair
• Provide superior returns on social capital outlays in the medium to long-term Socio-economic cost-benefit analysis (even though competing asphalt roads may also show positive net social present values)
• The longer the road is expected to last, the higher the net present value of concrete (rigid pavements) over asphalt (flexible pavements)
Nigeria has 3 major manufacturers of cement who could provide supply throughputs for the concrete road construction value chain, namely: Dangote Cement, Lafarge Cement, and BUA Cement. The local cement market structure appears non-collusive, avoiding an outright price war.
Business and policy analysts believe that an increase in the use of cement over asphalt over a 10-year planning horizon should improve the quality of Nigerian road infrastructure and lead to secondary benefits (enhanced multipliers) through the improvement in vehicular traffic hours, a reduction in the wear and tear on public and private vehicles, and a fall in the delivery time of farmgate produce to urban markets. E-commerce companies are equally likely to see a reduction in their fulfillment costs, thereby improving corporate bottom-line earnings as delivery costs slide marginally. Read more on concrete …
The need to make Nigerian roads more durable and improve the primary infrastructure that supports transportation has become urgent as COVID-19-induced supply chain disruptions have increased the cost of production and distribution. To bring distribution costs down and make locally made products more competitive, road infrastructure must be improved to global standards.
The impact of sloppy construction work and poor road quality could mean the difference between Nigeria’s economic sustainability and its commercial and manufacturing sector collapse. Within a COVID-19 economic reality, fiscal authorities need to optimize public spending by ensuring minimum quality standards for every naira spent. Read more about Nigerian: financial impacts; private-public partnerships (PPP); build operate and transfer (BOT) basis; build own operate and transfer (BOOT) basis; build operate and own (BOO) basis; tollgates; bonds to fund road contracts; new road construction framework; …
In the new world of road construction, roads are built for durability, in other words, they are meant to last.
To read the entire Sept. 21st REPORT titled “Roads: Concrete Vision, Asphalt Competition, Looking Ahead”, please go to: www.proshareng.com/news/Transportation/Roads–Concrete-Vision–Asphalt-Competition–Looking-Ahead/52523