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02
November
2022

FG owes contractors over N11tn, says Fashola

The Federal Government is currently owing highway contractors the sum of N10.4 trillion, Babatunde Fashola, the minister for works and housing has said.

Fashola disclosed this at a budget defence session with the House of Representatives committee on works in Abuja on Tuesday.

He also lamented that the shortage of young engineers and technical officers due to the embargo placed on employment by the government was adversely affecting his ministry.

The minister said: “The shortage of younger engineers/technical officers in the ministry as a result of the embargo on employment is affecting proficient project supervision at the sites.

“It is expected that more sources of funding of highway projects be explored as well as lifting the embargo on employment of needed engineers/technical officers at middle level to enhance supervision of projects.”

The former Lagos state governor said the main challenge to highway development in the country remains inadequate funding.

“As of date, the government is committed to highway contractors to the tune of about N10.4 trillion while a total of about N765billion are unpaid certificates for executed works.

“As of October 2022, the ministry had a cumulative unpaid certificate in the sum of N765,017,139,752.92 for ongoing highway and bridge projects. Apart from the pressure of resources to pay, there is the inadequacy of annual budget provisions where N100m or N200m was provided for roads costing twenty or more billion.

“In spite of all odds, twenty (20) major highways projects have so far been completed in 2022 and are ready for commissioning. The total cost of the completed projects is in the sum of N444,322,123,808.61 and they cover a total length of 379.677km

“Additionally, there are fifty-nine(59) major highways/bridges priority projects that are at an advanced level, to be completed within 2022-2023 with a total contract sum of N60,961,187,130.71,” he stated.

Fashola said the ministry is currently undertaking a total of 1,642 highway contracts at the sum of N10.3 trillion spread over the six geo-political zones, adding that the 1,642 ongoing contracts are categorised according to special funding mechanisms.

He said: “A total of six selected critical projects are being funded under the 2022 PIDF Project, which is managed by the Nigerian Sovereign Investment Authority (NSIA). As of date, the total sum of N754,790,502,612.80 has been certified out of the sum of N1,314,753,921,766.72. This translates to a performance of 57.41 percent.

“A total of 71 selected critical projects are being funded under the 2021 Sovereign Sukuk Issuance, which is managed by the Debt Management Office (DMO). As at date, the total sum of N157,920,183,472.88 has been drawn out of the sum of N210,565,000,000.00. This translates to a performance of 75 percent.

“The NNPC joined the Road Infrastructure Development & Refurbishment Tax Credit Scheme programme by undertaking to finance 21 roads in the total sum of N621bn with a total length of 1,804.6km. These roads were identified by key stakeholders such as the NNPC, Petroleum Tanker Drivers Association (PTDA) and the ministry, etc 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”.

Fashola said for 2023, particular attention has been paid to ongoing road projects that are on the nation’s major arterials but not having any alternative source of funding apart from the budget.

He said these include the llorin -Kabba -Obajana road, Okene -Itobe road and dualisation of Ibadan (May Fair junction) -Lagere-Iremo-Erinwu-Ilesha road.

The minister also disclosed that the completion of ongoing highway bridges has been prioritised in the 2023 budget, particularly the Murtala Mohammed Bridge, Nupeku Bridge and Marine Bridge, Eko Bridge

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