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Federal Government Incurs N956bn In Unpaid Debt From Housing And Road Projects- Fashola

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The Federal Government informed the Senate yesterday that as of September 2022, it owed contractors managing road and housing projects all over the nation N956 billion in unpaid liabilities. This was said as he bemoaned the significant budget cuts planned for the road and housing sectors in the 2023 fiscal year.

According to the government, of the N956 billion in unpaid obligations, N191.75 billion is owed to contractors managing the National Housing Scheme, while the remaining balance of N765 billion is owed to contractors managing road projects all across the nation.

It also said that it has touched on 8,352 kilometres of roads in the last 7 and a half years across different parts of the country out of its total contract value of N10. 4 trillion earmarked for road construction in its development plan. 

The Government said that it was a component of the nation’s infrastructure development strategy.

Speaking yesterday in Abuja when he appeared before Senator Adamu Aliero, Kebbi Central led Senate Committee on Works and that of Senator Sam Egwu, PDP, Ebonyi North led Senate Committee on Housing to defend the budget for 2023, the Minister of Works and Housing, Babatunde Raji Fashola, SAN disclosed that the  Federal Government has a total of 36,000 kilometres of roads across the country.

Specifically, in his submissions before the Senate Committee on Housing, Fashola said that the National Housing Project which started in 2016 has been executed in 35 out of 36 states of the federation with 1,250 contractors, adding that the 6, 000 housing units have created 46 construction sites across the country, 29, 030 direct employment and 57, 874 indirect employment.

He said, “The National Housing Project is very much on the course but the problems of the paucity of funds through drastic budget slash and outstanding liabilities of N191.75billion, need to be urgently looked into.

” In the 2022 fiscal year, while the total capital votes for both Works and Housing Components of the Ministry was N441.18billion, the proposal made for the 2023 fiscal year is N146billion.

“Out of the proposed N146billion as capital expenditure for the entire Ministry in 2023 fiscal year, only N45billion is earmarked for the Housing sector.”

Making similar submissions to the Senate Committee on Works, the Minister said: “The main challenge to highways development in the country remains inadequate funding. As at date, the government is committed to highway contractors to the tune of about N10.4trillion while a total of about N765billion are unpaid certificates for executed works .

“Secondly, 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.”

Speaking on the achievements of the Ministry under his watch, Fashola who noted that while some of the roads have been successfully executed and completed; others were in advanced stages, and said that out of the contract value of N10. 4 trillion for the construction of roads.

The Minister lamented to the Senate Committee members to make provision for the outstanding liabilities owed contractors’ suppliers for executed work in their final review of the Ministry’s budget for 2023, warning that the non-payment of the money could affect the livelihood of many families along the value chain.

Fashola said, “These are monies owed to contractors’ suppliers who supply building materials, cement etc. It is very important we find a solution otherwise we will have consequential social and economic effects.”

The Minister who noted that the Ministry intervened in the construction of 85 kilometres of roads in several Federal tertiary institutions as part of the Ministry’s investment in the education sector, said that the Ministry also initiated major repairs of bridges under its 2022 budget even as he announced that the bridge component of the Second Niger Bridge is completed; pointing out that only the Onitsha and Asaba roads components of the project are left to be completed.

Fashola welcomed the Tax Credit arrangement initiated by the Federal Government in 2019 which has enabled the government to transfer the construction of some key roads to some private entities like the Dangote Group, MTN, PZ and subsidiaries of NNPC.

The total budget for the Ministry of Works and Housing for 2022 stood at N515 billion with N441.1 billion as capital for works.

In the projection for 2023, the budget for the Ministry is slashed to N198 billion out of which N45 billion is allocated to housing.

Fashola lamented the paucity of funds, especially in the face of outstanding liabilities which he said would greatly hamper the Ministry’s ability to embark on new projects in 2023.

However, Chairmen and members of the committees commended the Minister for a series of roads and Housing projects executed across the country in the face of scarce resources and other challenges.

However, despite limited funding and other difficulties, the Chairmen and members of the committees praised the Minister for a number of housing and road projects that were completed nationwide.

The Minister was instructed to use the projected N45 billion in capital votes in the 2023 budget to finish the last 3,000 units of the 6,000-unit National Housing Project by Senator Sam Egwu, Chairman of the Senate Committee on Housing.

The Minister was given responsibility before the Committee on Works for seeing that the second Niger Bridge and the crucial road projects he mentioned were finished this year.

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