Lagos-Calabar Highway: FG funding 30%, lenders 70% — Umahi

The Federal Government is contributing 30 per cent of the funding for the Lagos-Calabar Coastal Highway, while external lenders are expected to provide the remaining 70 per cent, Minister of Works, Senator Dave Umahi, has disclosed.

Umahi said the arrangement was being implemented under an Engineering, Procurement, Construction and Financing (EPC+F) model, with the financing institutions conducting due diligence on the project before committing funds.

“The entire Tinubu legacy projects are EPC+F — Engineering, Procurement, Construction and Financing. Thirty per cent is paid by the Federal Government and 70 per cent is financing loan from external financing institution,” he said.

The minister disclosed that Deutsche Bank provided the financing for the first section of the coastal highway, adding that the facility was oversubscribed by $100 million.

He said the lenders examined the project’s environmental impact assessment, resettlement programme, procurement process and unit costs, among other requirements.

Umahi’s disclosure came amid criticism of the cost and financing structure of the coastal highway, which has been one of the administration’s most controversial infrastructure projects.

ALSO READ: NMA gives Oyo govt two-week ultimatum to resolve doctors’ concerns

Defending the project, the minister said its cost could not be judged simply by dividing the total expenditure by the number of kilometres constructed, given the complex terrain along the route.

“Terrain makes cost per kilometre simplistic because conditions differ every 50 metres,” he said.

Umahi explained that some portions of the route involved excavation of up to 10 metres, soil consolidation and extensive filling, while provision was also made for a rail corridor.

He maintained that the project was subjected to the necessary procurement and financing processes, rejecting allegations of financial impropriety.

The first section, measuring 47.47 kilometres, has been completed, while construction continues on other sections of the highway.

The Federal Ministry of Finance has previously confirmed a $747 million syndicated loan led by Deutsche Bank for Phase One, Section One of the project.