Both the Honourable Ministers of Finance, Zainab Ahmed, and her counterpart for Works and Housing, Babatunde Fashola, appear before the Senate Committee on Finance over perceived inadequate funding of road projects across the country cum alleged variations in the contracts sums. Taiye Odewale reports.
Worry over infrastructure deficit
One of the worrisome aspect of infrastructural deficits in Nigeria is the state of disrepair most of the 35, 000 kilometres Trunk A roads in the country have been, over the years.
Expectedly, to get them fixed up through budgetary provisions, the federal government has been running deficit budgeting solely to source for either internal or external loan borrowings to execute the road projects. Sadly, there has been little or no results to show for such efforts.
A pathetic situation that made by the Honourable Minister of Works and Housing, Babatunde Raji Fashola, during an interactive session with the National Assembly Joint Committee on Works in June this year when he unveiled a new approach of Public, Private Partnership Agreement for fixing the roads on the template of concessions.
Targeted trunk A pilot project
Fashola in unveiling the plan, told the Senator Adamu Aliero (APC Kebbi Central) led committee that 2,275 out of 35,000 trunk A kilometers road across the country will be used as pilot scheme. The targeted investment from the first phase of the plan to be driven by the Highway Development and Management Initiative, he added, is N163.323billion and 23,322 jobs for young Nigerians.
Specifically, Fashola, who was at the session with the Director General of Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah, listed Benin – Asaba, Abuja – Lokoja, Kaduna – Kano, Onitsha – Owerri – Aba, Shagamu -Benin, Abuja -Keffi – Akwanga, Kano – Maiduguri, Lokoja – Benin, Enugu -Port Harcourt and Ilorin – Jebba High ways, as targeted trunk A roads for the first phase.
According to him, investors will carry out the development and management of the road networks with required facilities and infrastructure like streetlights, toll plazas, rest areas, and weighbridge stations. He added that another 10 routes are being identified for the second phase of the Value Added Concession.
VAC and fatigue
He said “The Value Added Concession through the construction of rest areas will reduce fatigue on the highways thereby causing a reduction in accidents as the routes will be better management and maintained.
” Through the Value Added Concession, there will be job creation in communities that fall along the route which will bring about an increase in rural development.
Questions over cost variations
However, while waiting for implementation of the new approach conceptualized by the minister, the Senate Committee on Finance under the Chairmanship of Senator Solomon Olamilekan Adeola (APC Lagos West), is seeking for level of implementation on some of the Trunk A roads, being funded by Sovereign Investment Fund, particularly as regards variations in the cost of the projects.
The committee, accordingly, about two weeks ago, summoned the Minister of Finance, Budget and National Planning, Zainab Ahmed, and her Works and Housing counterpart, Babatunde Fashola, to appear before it today this week and explain the variations in the cost of major federal highways being executed through the Nigeria Sovereign Investment Authority (NSIA).
Some of the projects tagged Legacy Projects include Lagos – Ibadan Express Way, Second Niger Bridge and Abuja – Kano Expressway, Blueprint checks revealed, are being funded through tripartite agreement between the ministries of finance, works and the NSIA.
Chairman of the committee, Senator Olamilekan Adeola, (APC Lagos West), who extended the invitation to the Ministers and others at an interactive session with the MD of NSIA, said the meeting was necessary so as to clear grey areas as regards funding the road projects as well as variation in the cost of the projects.
He said: “On the issue of funding, by virtue of the information at my disposal and from what the Finance Minister made me to understand, is that you are playing critical roles by providing funds for the legacy projects.
“As of today, two years down the line, only $300m is in the books as having been spent on the projects, this gives cause for concern.
“We believe that funding is critical to these projects. If the funding is not there, there is no way we can achieve those time frame that you have set out for the completion of the projects.
“On that note, we would be bringing on board, the Minister of Finance, the Minister of Works and Housing, the Managing Director of the NSIA, the Accountant General of the Federation, and the contractors who should be invited by the Minister of Works.
“I know there are variations already but we want to know the value and the scope of works that the variations cover. We want to know it because we don’t have it. That is why we want to know the actual value for the Lagos-Ibadan expressway, for the Abuja-Kaduna-Kano and for the second Niger bridge.”
MTEF and road projects
Aside the road projects, the committee will also use the planned interactive session to engage the Minister of Finance on proposals made in the 2021 to 2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Indication to this effect emerged from a statement issued last week by Senator Adeola through his media aide, Kayode Odunaro, saying the MDAs are to appear before the Senate Joint Committee on Finance, and National Planning.
It will be recalled that President Muhammadu Buhari had on July 20 forwarded to both chambers of the National Assembly the 2021-2023 MTEF/FSP for their consideration and approval. The document included N12.66 trillion budget estimates for 2021 and an estimated N5.16 trillion budget deficit for the fiscal year.
Adeola, in the statement, noted that there is need to examine the rationale for pegging the price of crude oil at $40 per barrel and a projected crude oil production of 1.86 million barrels per day, mbpd, in the MTEF/FSP document.
According to him, there is need for thorough scrutiny of the MTEF/FSP document in view of the fluid nature of the world economy following the disruptive impact of COVID-19 pandemic and the vagaries of the international market for crude oil and its attendant effects on the nation’s sources of revenue.
“There is a need for all stakeholders to come together to critically study the fundamentals of the ‘new normal’ forced on the global economy by the COVID-19 pandemic.
“With the instability witnessed in the price of crude oil at the international market and the sluggish world economy with some nations falling into recession, there is a need to assess our situation critically and be realistic about our revenues sources for budgets going forward”, he said.
