BusinessDay

FG to prioritise Route A1-A9 roads projects completion in 2022

...owes contractors N420.583bn

The Federal Government is to focus on the completion of some priority road projects, especially those on Route A1-A9 in the 2022 fiscal year.

A1-A9 are roads and bridges that lead to ports and major agricultural hubs and carry heavy goods vehicles across the six geo-political zones of the country.

Babatunde Fashola, minister of works and housing, disclosed this on Wednesday during the 2021 budget performance appraisal and 2020 budget defence before the House of Representatives committee on works.

Fashola said the priority on A1-A9 was in view of the wide disparity between the actual 2022 indicative cost of execution of highway projects of N1.384 trillion and the actual budget envelope of N282.636 billion.

He said the ministry has also identified some strategic road projects that have already attained some appreciable percentage completion and slated them for completion within the period 2021-2023.

The minister further informed that there was N420.583 billion total outstanding for payment to contractors for duly certified and approved works as of October 20, 2021.

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“This underscores the effort of the Federal Government of Nigeria (FGN) under this Administration to secure several alternative sources of funding through (PIDF, Sukuk, Tax Credit, HDMI) for highway development.

“The major challenge to the ministry’s efforts towards the timely completion of projects is insufficient budgetary provision and releases for projects to sustain annual cash-flow requirement levels”, he said.

Fashola while responding to questions raised by lawmakers on the 2021 budget performance and other issues said “enough of new roads and new projects” and called for the concentration of resources to the completion of ongoing projects.

“We appropriate for a very token amount for a project of certain quantum, now once the award is done, the question of financing becomes a challenge.

“With the inflation and everything, there must come a time and I think that time is now; honourable members, enough of new roads and new projects. Let us concentrate our limited resources to complete or progress some of what we have started”, he stated.

Fashola said his ministry was undertaking a total of 854 highway contracts at a total contract sum of N7.430 trillion spread over the six geo-political zones in the country.

He added that some of the projects were being funded by the Presidential Infrastructure Development Fund (PIDF), Sovereign Sukuk Fund. Road Infrastructure Development & Refurbishment Investment Tax Credit Scheme, Road Infrastructure Development & Refurbishment investment Tax Credit Scheme (RIDRITCS) and Multilateral Loans.

While giving the 2021 budget appraisal, Fashola said a total of N347.67 billion was allocated to the ministry for capital expenditure but N182.97 billion so far released. He said the sum of N627.0 billion was earmarked for overhead cost but N356.75 released while personnel cost was allocated N10.416 billion. He said the ministry has so far generated N837.39 million internally.

Fashola stated that the sum of N450.029 billion was proposed for the ministry in 2022 budget proposal, out of which N382.89 million is for capital expenditures and N627.00 million is for overhead.

Chairman of the House committee on works, Kabir Abubakar said to overcome the problems of grossly insufficient budgetary provisions which have been the bane of infrastructural development; there was a need to be creative in sourcing funds.

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