Nigeria to prioritise completion of major highway road projects in 2022

...owes contractors N420.583 billion Fashola says enough of new roads, other projects

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.

Minister of Works and Housing, Babatunde Fashola disclosed this on Wednesday for 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 disclosed that there was N420.583 billion total amount outstanding for payment to contractors for duly certified and approved works as at 20th October, 2021.

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

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

Read also: Dilemma of Nigerian travelers as roads, rails become riskier

Fashola said his Ministry is currently 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 said some of the projects are to be 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 the total of N347.67 billion was allocated to the Ministry for capital expenditures and N182.97 billion has been so far released.

He said the sum of N627.0 billion was earmarked for overhead cost and N356.75 million has been released while
personnel cost was allocated N10.416 billion, adding that the Ministry has so far generated Internally Generated Revenue (IGR) of N837.39 million.

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.

In his remarks, Chairman of the House Committee on Works, Kabir Abubakar said to overcome the problems of grossly insufficient budgetary provisions which has been the bane of infrastructural development, there was need to be creative in sourcing funds.

Abubakar called on the Ministry and the Agencies to come up with creative
and innovative ways to generate income and not to entirely depend on budgetary allocation from the Federal Government.

He assured that the House of Representatives will provide the MDAs with all the legislative support they might need to attain their financial independence.

“As you are all aware, Nigeria has a huge road infrastructure gap that must be bridged, if we are to have meaningful and sustainable economic growth. The economy of a country is determined by the good road network the country has. So, the task of developing a sustainable and vibrant economy for Nigeria starts in this room.

“The administration of President Muhammadu Buhari has made giant strides towards providing a first-class road infrastructure network in the country. It is therefore commendable that even in the face of existing financial constraints, the Federal Government is currently implementing over 800 contracts for roads’ reconstruction and rehabilitation, and building new bridges”, the lawmaker said.

Get real time updates directly on you device, subscribe now.