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FG owes 3,504 contractors N70bn – Fashola

Lawmakers seek privatisation of FMB, FHA

The Federal Government is owing 3,504 contractors in the housing sector the sum of N70 billion. Minister of Works and Housing, Mr. Babatunde Fashola, yesterday, disclosed this at the National Assembly complex, Abuja, while defending the 2021 budget of the ministry before Senate and House of Representatives joint Committee on Housing. He stated that the liabilities were incurred from different contractors executing projects in the different departments of the ministry, noting that the exact amount stood at N69,909,492,390.76.

A breakdown of the debt shows that N1,413,971,873 was owed 29 contractors executing projects in the Urban and Regional Development department, while N2,745,753,630.91 is the debt owed 59 contractors from engineering services. Also, N30,558,460,668.76 is owed 794 contractors in the Public Building and Housing Development department, just as N362,409,921.21 is owed 10 contractors from the Lands and Housing Developments. Similarly, Fashola noted that 11 contractors under Public Private Partnership (PPP) were owed N908,492,932.44 while 2,601 contractors under Special Project Unit were being owed N33,929,403,364.32.

The minister, however, pointed out that the ministry had completed a total of 1,786 national housing projects across the country from the 3,926 housing projects initiated by the Federal Government. He further stated that the 2021 budget would be anchored on the completion of the remaining 2,140 housing units under the national housing programme in 34 states of the federation and the Federal Capital Territory (FCT).

Fashola said that six federal secretariats were under construction in Bayelsa, Anambra, Ekiti, Osun, Zamfara and Nasarawa states. Furnishing the lawmakers with the current status of issuance of Certificate of Occupancy (C of O), Fashola disclosed that a total of 3,950 C of Os and 1,246 consents were issued and granted to Nigerians from January 2018 to January 2020.

He said that some of the requests for the C of Os dated back to 1996, pointing out that the issuance would further accelerate economic growth and development in the sector. The minister said that inadequacy of budgetary allocations was the major factor militating against timely completion of housing projects as what was usually provided could not sustain annual cash-flow requirement levels.

Fashola also pointed out that there was need to complete all on-going projects before embarking on new projects. Taking the joint committee through the performance of 2020 budget by the ministry, the minister said that out of the N72 billion appropriated for capital projects, only N48 billion had been released to the sector representing 67.41 per cent.

He said that, for the overhead cost, N72 million was released, representing 61.05 per cent of the N118 million appropriated. On the 2021 budget estimates, Fashola noted that N76 billion was proposed as capital while N188 billion was for overhead cost and N5 billion was for personnel cost.

Earlier in his opening remarks, the Chairman of the Senate Committee on Housing, Sam Egwu (PDP,Ebonyi North) said that the committee expected the minister to provide detailed explanation on the performance of the 2020 budget before presenting for defence, the proposal for 2021. Some members of the committee expressed concerns on the huge amount of outstanding liabilities due to contractors in the sector, stressing the need for government to settle the liabilities given the importance of the sector to economic development of the country.

Meanwhile, some of the lawmakers suggested that the Federal Government should partially privatize the Federal Mortgage Bank (FMB) and the Federal Housing Authority (FHA), saying that the two agencies were not viable enough to deliver the services for which they were established.

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