The Minister of Works and Housing, Mr Babatunde Fashola on Tuesday disclosed that Federal Government is currently undertaking a total of 1,642 highway contracts worth N10.395 trillion across the six geo-political zones of the country, and owed about N765 billion unpaid certificates for executed works.
Fashola disclosed this while giving an update on the utilisation of a total sum of N515.951 billion appropriated to the Ministry of Works & Housing and its Parastatals in the 2022 fiscal year, out of which N441.109 billion was for capital expenditure, before the House of Representatives Committee on Works chaired by Hon. Abubakar Kabir.
The Minister however noted that from the total sum of N293.513 billion that has so far been released, the sum of N163.017 billion was allocated to Works Sector, while Housing Sector received N130.496 billion which represents 66.54% of the capital allocation in the 2022 Appropriation (Amendment) Act, leaving a balance of N147.596 billion to be released by the Federal Ministry of Finance, Budget & National Planning.
The sum of N110.450 billion was released to the Highways (Works Sector) and utilised N261.222 billion as part-payment of the outstanding Certificates for executed works on roads and bridges, representing about 42.28% of the budget performance for highway projects, while the balance went to Engineering and Common Services.
Out of the 1,642 ongoing contracts, some are categorized according to special funding mechanisms, namely: Presidential Infrastructure Development Fund (PIDF), Sovereign SUKUK Fund, Road Infrastructure Development & Refurbishment Tax Credit Scheme and Multilateral Loans.
According to him, under the Highway Project Financed with PIDF, a total of six selected critical projects are being funded in 2022 are being managed by Nigerian Sovereign Investment Authority (NSIA) to the tune of N754,790,502,612.80 and certified out of the sum of N1,314,753,921,766.72 (representing 57.41% performance level).
A total number of 71 selected critical projects are being funded under the 2021 Sovereign Sukuk Issuance and are being managed by the Debt Management Office (DMO). As of date, the total sum of N157,920,183,472.88 has been drawn out of the sum of N210.565 billion, translating to a 75% performance level.
In the same vein, 21 roads (1,804.6km length) are being funded by the Nigerian National Petroleum Company Limited (NNPC) under the Road Infrastructure Development & Refurbishment Tax Credit Scheme programme to the tune of N621 billion.
The Minister explained that these roads were identified by key stakeholders such as the NNPC, Tanker Drivers Association (PTDA) and the Ministry and other stakeholders as being crucial for the efficient distribution of petroleum products across the nation.
As of date, the sum of N196,052,918,202.51 has been paid by the NNPC out of the Federal Executive Council (FEC) approved sum of N621,237,164,794.59 representing 31.56% performance.
In addition, 10 projects are being funded under Tax Credit Scheme through the most recent Companies that have embraced the programme such as GZ Industries Limited & MTN Nigeria Communications Plc.
While noting that some highway projects are being funded by Multilateral loans, and grants from the African Development Bank (AfDB) and ChinaExim Bank.
According to him, as of October 2022, the Ministry had cumulative unpaid certificates in the sum of N765.017 billion for ongoing highway and bridge projects, apart from the pressure of resources to pay, there is the inadequacy of annual budget provisions where N100 million or N200 million was provided for roads costing N20 billion or more.
Some of the 20 completed major highway road projects worth N444,322,123,808.61 covered a total length of 379.677km, while additional 59 major highways/bridges priority projects are at an advanced level, to be completed within 2022-2023 with a total contract sum of N60.961 billion.
In addition, the Ministry embarked on major rehabilitation of several bridges under the 2022 budget implementation, namely: Murtala Mohammed bridge at Koton Karfe along Lokoja-Abuja Road; Makurdi Bridge along Makurdi-Lafia Road; Katsina-Ala Bridge along Gboko-Katsina Ala-Wukari Road; Third Mainland Bridge amongst others.
While speaking on the 2023 budget proposal worth N198,964,003,907 for the Federal Ministry of Works & Housing and its Parastatals, out of which the sum of N146,631,642,794 is for the Main Ministry.
“In view of the wide disparity between the actual 2023 indicative cost of execution of highway projects of N1,256,290,524,288.32 and the actual Budget Envelope of N198,964,003,907, the prioritization of funding in the 2023 Budget becomes imperative in order to make an appreciable impact.
“Accordingly, the focus of the 2023 budget proposals of the Ministry is on the completion of some priority road projects, especially those on Route A1-A9. These are roads and bridges that lead to Ports and major Agricultural hubs and carry heavy goods vehicles across the six geo-political zones.”
“Secondly, the Ministry has identified some strategic road projects that have already attained some appreciable percentage completion and slated them for completion within the period 2022-2023 with focus on the following: particular attention has been paid to on-going road projects that are on the nation’s major arterials but not having any alternative source of funding apart from the budget for example: llorin – Kabba – Obajana road, Okene – Itobe road, Dualisation of Ibadan (May Fair Junction – Lagere – Iremo – Erinwu – llesa road etc; Completion of ongoing highway bridges has been prioritised in the 2023 Budget mostly; Murtala Mohammed Bridge, Nupeku Bridge, Marine Bridge, Eko Bridge, etc; Nominal provisions have also been made for the administration of projects financed with Sovereign Sukuk (SUKUK), Presidential Infrastructure Development Fund (PIDF) and those under Road Tax Credit Scheme to keep them listed in the 2023 Budget document; completed projects which have boosted the image of the Ministry, having outstanding payments have been given special consideration.
“This include but is not limited to Rehabilitation of Calabar – Ugep – Katsina-Ala Road Section II, (Ugep -Katsina-Ala), Kano-Maiduguri Sections II and Ill, Sokoto-Tambuwal Road Section I etc for payment of Retention; Projects that have been substantially completed (completion between 95% – 99%) are also prioritised to ensure physical completion in 2023; and Provision of Federal Government of Nigeria (FGN) Counterpart Fund for projects financed from loan resources was made to satisfy the cash-flow requirements of the projects.”
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