Dave Umahi, the Federal Minister of Works, has disclosed that the funding gap of road projects being financed by the Nigerian National Petroleum Company Limited stands at N3.56 trillion.
He made this known during the presentation and defense of the 2024 budget of the Ministry to the Joint Committee on Works of the National Assembly in Abuja on Monday.
Umahi told the lawmakers that the Ministry of Works is managing 2,097 road projects at the moment through various special funding sources, including those funded by the NNPC.
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He said that the NNPC has agreed to finance various highways around the country that had been identified as critical for the efficient distribution of petroleum products throughout the country.
These NNPC-financed road projects are further divided into two phases: NNPC Funded Projects Phase I and NNPC Funded Projects Phase 2.
Phase I of the NNPC-financed road projects consists of 21 highways totaling approximately 1,804.6km in length, with a projected construction cost of N621 billion.
He said: “As of date, the total drawdown forwarded to the NNPC Limited is in the sum of N247,729,252,899.54 out of the Federal Executive Council (FEC) approved sum of N621,237,164,794.59 representing 39.88 percent performance. The funding gap here due to inflation is estimated at over N250 billion.”
The Minister of Works said that the Federal Executive Council granted N1,969,700,168,910.78 for the implementation of 44 road projects totaling 4,554.19km for the Phase II road projects funded by the NNPC.
On the other hand, he said that the initial contract sum for these 44 road projects under the NNPC Phase II Funded Projects was approximately N3.69 trillion. This means that a financing gap of N2 trillion existed at the start of the Phase II road projects.
According to him, the budget shortfall for both the Phase I and Phase II NNPC-financed road projects is currently N3.56 trillion. “Presently, with inflation, the funding gap to have the NNPC Phases I & II completed shall stand at about N3.56trillion (Inflation about N1.5trillion) for two years from now.”
Umahi told the legislators that there is no money source or allocation for the road projects supported by the NNPC.
“This means that without the kind intervention of this Distinguished and Honourable Joint Committees of Works, these projects will not go on mostly from March 2024 when the NNPC funding would have been exhausted. Your kind intervention and advice are highly, highly, and urgently solicited.
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“As of date, the total drawdown forwarded to the NNPC Limited is in the sum of N752,093,618,603.51 representing 38.18 percent performance, “ the minister said. “The level of drawdown seems low because most of the projects needed to be reviewed due to the inflation.”
