THE Federal Government is set to overshoot its budget for the $1.5bn Lagos-Ibadan standard gauge rail project.
According to investigations by TribuneOnline, the Federal Ministry of Transportation has already compiled all incidental items and cost overrun that has overshot the $1.5bn initially earmarked for the project, and are set to submit same to the Bureau of Public Procurement (BPP) and the Federal Executive Council (FEC) for considerations and necessary approvals.
Further investigations also revealed that part of the cost overrun threatening to overshoot the $1.5bn Lagos-Ibadan standard gauge rail project includes: Apapa port rail sidings initially budgeted at 2.4km, but now estimated at 6.4km. The rail sidings are expected to connect all the port terminals to the standard gauge rail. However, in the project budget, the rail sidings was budgeted based on 2.4km calculation. “The Minister of Transportation, Rotimi Amaechi has directed that the difference should be calculated as part of the project’s cost overrun,” a ministry source told TribuneOnline.
Another cause of cost overrun is the identification and relocation of oil and gas pipelines in the port. According to findings, a cost-effective solution, which involves the construction of protective structures over the oil and gas pipelines is being sought instead of the outright relocation of the pipes. However, the detection of the location of many underground oil and gas pipelines remain a challenge for the project consultant, and the use of a Geo-Radar equipment to detect underground pipelines is set to be put to use.
“This wasn’t part of the project budget. The project didn’t envisage the use of a Geo-Radar equipment at inception, and this also forms part of the project overrun that the Minister has already directed should be collated for onward submission to FEC,” our source also added.
When asked about the cost overrun for the standard gauge rail project, the Honourable Minister of Transportation, Rt. Hon. Rotimi Amaechi, during his routine inspection of the project, confirmed that such cost overrun is expected as the project progresses.
“We will definitely have such scenario’s as the project progresses. Many of the issues we are having now were not envisaged at inception. We have asked that all such cost overrun be submitted to the Ministry,” the Honourable Minister of Transportation stated.
In a related development, the Nigerian Army has submitted a claim of N5, 930,611,492.20 for the permanent relocation of the Nigerian Army 81 Ordinance Corps in Yaba, Lagos.
“The project consultant has reviewed the Army claims down to N5,157,700,347.41, but the Minister has called for a further review due to the paucity of funds.
“The Army unit is expected to be relocated to Epe, on the fringes of Lagos State, but a downward review of the claims has been directed by the Minister before any presentation is made to the FEC,” our source added.