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2023 Appropriation Bill: Housing Minister Defends Proposed Budget, Claims FG Owes Contractors Over N11tn

The Federal Government owes contractors N11.16 trillion for the construction of various highways across the country, as well as completion certificates.

Babatunde Fashola (SAN), Minister of Works and Housing, disclosed this while defending his ministry’s proposed budget in the 2023 Appropriation Bill, saying his ministry had currently awarded 1,642 highway contracts for 1,632 projects totaling N10.395 trillion.

Fashola noted that “the main challenge to highways development in the country remains inadequate funding,” while appearing before the House of Representatives Committee on Works in Abuja on Tuesday, with lawmakers asking him to “take a bow and go” after his presentation. 

“As of today, the government has committed to highway contractors to the tune of approximately N10.4 trillion, with a total of about N765bn are unpaid certificates for executed works.

“Secondly, the shortage of younger engineers/technical officers in the ministry as a result of 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.”

Reading from his written presentation to the committee, the minister noted that the regime had built roads with a cumulative distance of about 8,000 kilometres out of the about 13,000 kilometres under (re)construction.

He stated that the ministry had documented creation of 339,955 jobs across road projects, saying, “These are the human activities behind the kilometres (of road constructed).”

Contractors

He further said that some of the jobs were created through lane marking covering 1,663,954 linear meters, “which was not visible on our roads before but you can now see them beginning to emerge.”

The minister also noted that 250,583 road signs were missing on the roads as of 2015.

According to Fashola, the construction companies had used 1,002,960,851 litres of diesel for various projects.

“Construction companies don’t buy diesel; they buy from the market. All of these suppliers are small businesses who benefit from and are impacted by what we do.”

The minister also said the contractors had used 1.6 million tonnes of cement, adding that, “These are activities going on, impacting people beyond what we do here.”

He stressed that 512,000 tonnes of reinforcement, 3,371,000 tonnes of bitumen, among other materials, had been used for the projects.

Fashola further said, “It is to be noted that as at October, 2022, the ministry had a cumulative unpaid certificates in the sum of N765.017bn 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 N20bn or more.

“In spite of all odds, 20 major highway 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 59 major highways/bridges priority projects that are at advanced level, to be completed within 2022-2023, with a total contract sum of N60,961,187,130.71.”

Fashola also noted that the ministry had initiated an intensive bridge maintenance programme to ensure serviceability of the major assets, adding that bridges were critical structures that guaranteed connectivity across the federal road network.

“Some bridges have never been maintained since they were constructed over 40 years ago. Furthermore, illegal commercial (human) activities, which are detrimental to these national assets, contributed to their deterioration,” he stressed.

The minister said while the overhead cost of the ministry for 2022 was N627.001m, with N365.750m  released for the period of January to July, representing 58.33 per cent, with an outstanding sum of N261.250m.

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