FG grapples with N6.26trn road projects due to paucity of funds
The Minister of Works, Babatunde Fashola on Wednesday expressed concern over the inadequate funding for the implementation of the ongoing 711 highway projects worth N6.26 trillion, across the country.
The Minister who expressed the concern during the 2020 budget performance/2021 budget defence held at the instance of the House Committee on Works, chaired by Hon. Abubakar Bichi explained that the sum of N1.2 trillion cash flow is required to execute major road projects in 2021, against the sum of N276.244 billion provided for highway projects in the budget proposal submitted by the Executive.
He observed that since the Ministry cannot accomplish all its objectives due to paucity of funds, but recommended that rather than expanding the projects being financed through Sukuk, efforts should be channelled toward the completion of the entire green network covering the four major ports, Lagos, Warri, Port Harcourt and Calabar.
According to him, out of the total sum of N227.964 billion capital allocation appropriated in the 2020 Appropriation Act, the sum of N152.150 billion has so far been released to the Works and Housing sector (representing 66.74%), leaving a balance of N75.814; adding that the sum of N162.559 projects was financed through Sukuk Bond.
“The sum of N77.955 billion was released to the highway (Works sector) from the budget aside from the sum of N162.559 billion for the Sukuk issuance. The Sukuk is to be drawn down for works certified only in respect of 44 roads and bridges and the Ministry is still awaiting the payment of the first tranche of N54.8 billion is for work done as at 16/10/2020.
“The ministry is currently administering 711 number of contracts nationwide and as of 1st October, 2020the ministry has a cumulative unpaid certificate in the sum of N392.020 on ongoing highway construction projects,” he noted.
For 2021 budget proposal, Fashola further noted that the sum of N435.319 billion was proposed for capital, personnel and overhead cost of the Ministry of Works and Housing and six parastatals, adding that the N15.886 billion overhead is insufficient due to various socio-economic factors such as cost of fuel, inflation rate, among others.
While responding to questions on the Presidential Infrastructure Development Fund (PIDF), Fashola explained that the three national priority highway projects are being financed from the sovereign wealth fund, namely: rehabilitation, reconstruction and expansion of Lagos-Shagamu-Ibadan dual carriageway; construction of 2nd Niger Bridge and rehabilitation if Abuja-Kaduna-Kano dual carriageway.
According to him, the 44 roads and bridges are being financed through the N162.557 billion sovereign Sukuk bond, mainly dual carriageways on major arterial routes A1-A9 on the federal road network, including A1 Lagos-Ibadan-Ilorin-Jebba-Jega-Tambuwal-Sokoto-Niger Republic Border; A2 Warri-Benin-Lokoja-Kaduna-Kano-Kongolam; A3 Port Harcourt-Aba-Enugu-Makurdi-Lafia-Jos-Bauchi-Potiskum-Maiduguri-Gambrou; A4 Calabar-Ugep-Ikom-Ogoja-Katsina-Ala-Jalingo-Yola-Gombi-BamaMaiduguri; A5 Abeokuta-Ibadan; A6 Onitsha-Owerri; A7 Kaiama-Kishi; A8 Mayo Belwa-Jamtari Jada-Ganye and A9 Kano-Katsina-Jibia-Niger Republic Border and other major routes like Kano-Maiduguri, Onitsha-Enugu, Sapele-Ewu, Lagos-Badagry, Odukpani-Itu Bridge Head, etc.
He added that the ministry is also engaging in a number of highway projects funded with multilateral loans for which the Federal Government contributes counterpart funding.
While responding to question on the alleged preference for Julius Berger in the execution of high-profile contracts, Fashola who denied the allegation, called for the amendment of the Public Procurement Act with the view to accommodate small and medium construction company, adding that the extant law does not provide for the award of contracts with low financial capacity.
On the alleged delay in the completion of ongoing Abuja-Kaduna-Kano expressway awarded to Julius Berger, the Minister observed that with approximately 40,000 vehicles plying the road daily, the Contractor has to grapple with the challenges of staff security, diversion, location of utility such as electric poles, demolition of houses as part of efforts to get Right of Way.
Some of the lawmakers who spoke during the exercise including Hon. Ben Igbakpa queried the slow pace of work done by Julius Berge, despite the release of N70 billion for Abuja-Zaria, N62.8 billion for Lagos-Shagamu-Ibadan; N100.6 billion for the Second Niger Bridge while RCC has so far received N92 billion for Lagos-Shagamu contract.