N3.39trn owed contractors, N3.53trn needed to complete jobs
Minister of Works and Housing, Mr. Babatunde Fashola, has said that the ministry is currently undertaking a total of 711 critical highway projects worth N6.26 trillion in all the six geo-political zones of the country Fashola also said that the amount owed to contractors who have completed their projects is N3,397,924,681.70, while the sum of N3,538,318,490.29 is required to complete the remainder.
Fashola made the disclosure yesterday at a meeting with the members of House of Representatives’ Committee on Works on the presentation of the 2021 Budget and review of the 2020 Budget of the ministry and ts parastatals.
He said that the 711 highway projects are categorised according to funding mechanism by the ministry and are mainly funded through multilateral loans. He informed 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 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 billion. The sum of N162.559 projects were financed through Sukuk Bond.
“The sum of N77.955 billion was released to the highway (Works Sector) from the budget, aside 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 October 16, 2020.
“The ministry is currently administering 711 contracts nationwide and as of 1st October, 2020 the ministry has a cumulative unpaid certificates in the sum of N392.02 billion on ongoing highway construction projects,” he noted. According to him, given the wide disparity between the liabilities in unpaid certificates in the total sum of N392,019,827,093.87 and budgetary provisions over the years, it has become imperative that the ministry prioritise its 2021 capital proposals in order to make appreciable impact within the period 2022-2023.
He further said that the ministry has given priority first to 18 roads/bridges projects that have already attained some appreciable physical achievement for completion within a 12-15 months period. He added that the ministry is also focusing on roads that have attained 70% completion to achieve substantial completion level.
The minister also informed that the ministry has selected two roads and a bridge per zone for enhanced funding in the 2021 Budget to achieve appreciable progress on the projects. He further revealed that there are 43 intervention projects in tertiary educational institutions and that amendment to the 2020 Budget by a 17.35% cut had made it impossible to pay contractors who have completed their projects. Speaking on the 2021 proposed budget, he said N276,243,984,521.23 is provided for the highway projects, which is an improvement over the 2020 amended provision of about N154.2 billion that is inadequate to address the funding challenges of highway projects in the country.
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 of 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. Responding, the chairman of the committee, Hon. Abubakar Kabir Abubakar, demanded a list of all Sukuk projects from the minister.