Transport and infrastructure upgrades in Nigeria's Osun State aim to enhance capacity and efficiency

As part of the State of Osun’s public capital spending campaign, transport and water infrastructure are slated for a host of upgrades in terms of capacity and efficiency, while national initiatives to boost power provision and telecoms coverage should also benefit the local population. The state of infrastructure in Nigeria is a common concern for all levels of government, but there have been a host of public programmes that aim to change that. Receiving the highest state budget allocation, with capital expenditures for the transportation sub-sector estimated at N50.5bn ($308.1m) in 2014, road connections have been one of the most visible examples of the government’s efforts to reduce the cost of doing business and improve the access of agricultural producers and manufacturers to markets. Improvements to the electricity supply, which according to a number of surveys, including the “Reliability Worth Assessment of Electric Power Utility in Nigeria” by the University of Witwatersrand Johannesburg in 2011, is already among the most reliable in Nigeria, should help strengthen the state’s efforts to attract energy-intensive activities such as manufacturing.

Road Network

Across Nigeria, roads remain the dominant mode of transportation. However, the Federal Roads Maintenance Agency estimates a third of the country’s 200,000 km of roads are in poor condition. This proportion is higher with respect to rural trunk roads, constraining growth and revenues. Osun has invested in upgrades, and since 2010, 903 km of roads, including boundary, intercity and township roads, have been completed. In addition, 225 km of local government roads across the state were also completed, for a total of 1128 km as of July 2014.

Among the biggest projects is the 45-km dualisation of the Osogbo-Ikirun-Kwara State Boundary Road. The project is divided into three parts at a cost of N17.8bn ($108.6m) contracted out to Nigerian firm Sammya Construction. The project began in 2012 and was set to be completed in 24 months, with the Infrastructure Bank providing financing. The project aims to improve capacity from the state capital north to neighbouring Kwara State. In 2013 the state awarded a N14.5bn ($88.5m) contract for the 18-km Osogbo East Bypass Road to Slava-Yeditepe Project, which is expected to free up the flow of traffic on the eastern edge of the city. As of March 2015 it was estimated to be 35% complete. In April 2014, the administration commissioned the construction of the Omoluabi Motorway at a cost of N29bn ($176.9m). The dual carriageway from Gbongan Junction to Akoda stretches for 30 km. The project was awarded to Nigerian Ratcon Construction Company and as of March 2015 it was 20% complete.

In late 2014 Osun signed a contract worth N10bn ($61m) for the rehabilitation and construction of 224 km of rural roads aimed at reducing post-harvest losses for small-scale farmers. Called the Rural Access and Mobility Project and including three other states, the scheme is supported by the World Bank and the French Development Agency, which are contributing 75% of the costs, with the remainder coming from the state government. The contract was awarded to a consortium of Westmidland Construction Company, Wetland Construction Nigeria and Lee Fakino Nigeria.

Rail Improvements

A legacy of colonial infrastructure, Nigeria’s rail network has received little investment since independence. There are only limited passenger services between a handful of cities. Nigeria has a 3505-km narrow-gauge track and a single unfinished 274-km standard-gauge track. There are two north-south trunk lines that operate from Lagos to Kano serving the central and western parts of Nigeria. Things are expected to change, however, thanks to a federal government revival programme, which includes the potential privatisation of the Nigerian Railway Corporation (NRC). Abuja also recently inked a $12bn deal with China Railway Construction Corporation to expand connections along the coast of Nigeria. Osun is expected to benefit from the planned improvements to the network, sitting on the primary Lagos-Kano line, which should help strengthen trade linkages with other states. The state government has signed a memorandum of understanding with the NRC to upgrade the railway station in Osogbo at a cost of around $5m.

Airport

MKO Abiola aerodrome, located in Ido-Osun, is being rehabilitated and reconstructed. In early 2015, the state government received official approval and certification from the International Air Transport Association, International Civil Aviation Organisation and the Association of Airline Operators to handle international traffic, making Osun the only state in the south-west outside of Lagos to run an international airport. At a cost of N4.5bn ($27.5m), the airport sits on 300 ha, with a 3-km runway, and will include helicopter and aircraft hangars. It is expected to serve passenger and cargo transport, with the first flight expected in 2015.

Power Supply

Electricity is regularly cited as the country’s biggest obstacle to growth. The opportunity costs are estimated at as much as two percentage points of GDP growth annually, with operational costs for large energy users rising by as much as 30% due to the need for diesel generators. As a result, the federal government has sought to overhaul the sector in recent years. The former Power Holding Company of Nigeria (PHCN), which included all segments of the electricity value chain, was unbundled in a privatisation effort beginning in February 2013.

Distribution in Osun is handled by the Ibadan Electricity Distribution Company (IBEDC), acquired from the federal government by Integrated Energy Distribution and Marketing of Abuja, with the Philippines’ Manila Electric Company as a technical partner. IBEDC is the largest distribution company in Nigeria and has a customer base of 1.1m and total installed capacity of 720 MW. These figures are set to improve by curbing electricity theft while investing in upgraded substations and distribution lines. The state government also signed a N6.6bn ($40.3m) deal with French company Vergnet in March 2015 for a 13-MW solar power plant.

Rural electrification projects were implemented in 38 communities across the State of Osun between 2010 and 2014. This included the procurement in 2013 of two 35-KW hydroelectric turbines by UN Industrial Development Organisation for installation in Ikeji-Ile jointly financed in partnership with the Osun government. With a year-round flow, the project is expected to generate 24 hours of electricity a day for the communities connected to the mini-hydro station.

Water & Waste

With only 60% of Nigeria’s population able to access clean water from public utility providers through pipes laid down primarily during the colonial era, the federal government began in July 2014 to implement a 16-year water master plan that aims to ensure proper development and management of the nation’s water resources. At the state level, Osun has embarked on measures to rehabilitate and expand existing distribution networks. Nigeria’s territory has been split into 12 river basins, each with a separate government authority to manage ground water supplies. At the federal level, privatisation has been proposed for these entities. The State of Osun, along with Lagos, Oyo and Ogun State – an area of over 66,000 sq km – is governed by the Ogun-Oshun River Basin Development Authority, whose mandate is to manage surface and ground water resources, while providing safe water. Other entities in Osun include the Rural Water and Environmental Sanitation Agency, which ensures a sustainable delivery of potable water and hygiene services, and the Osun State Water Corporation, a local parastatal funded by consumer fees and responsible for maintaining state water infrastructure.

The state’s existing water infrastructure is in need of upgrading after years of underinvestment. In 2012 the designed capacity of Osun’s urban water system was just over 244,000 cu metres per day with a capacity utilisation level of only 16%. Water provision in urban areas operated at an average of only 4.5 hours a day, according to the Osun State Water Corporation. To expand capacity and network maintenance, the state government has sought to channel capital into projects, including the supply and installation of a new generating set for the Okinni Dam, the supply and installation of five low-lift hand pumps for the Ilesa water supply project, and the supply of two 2500-cumetre/hour low-lift pumps to the Osogbo/Ede Water Project, in a bid to improve the capacity utilisation of these projects. The new pumps for the Ede Water Works are particularly crucial, given that the facility supplies 70% of the state’s water. With new transformers and ancillary equipment, the upgrades helped the site raise its capacity utilisation to 26%, with a goal of 70%.

Sanitation services are also a focal point for improvements, given that, like much of Nigeria, the sector depends largely on household septic tanks, a luxury only some can afford. Some states such as Lagos and Abuja have made progress on the issues of waste management, where private contractors now bid and handle the job. Waste management in the State of Osun is handled by the Osun Waste Management Agency, a government parastatal established in 2011. The agency is working with its counterpart in Lagos State to find ways to improve collection and service delivery.