Umahi says FG needs N16trn to complete inherited road projects

• Says Lagos-Calabar coastal highway to proceed as planned
• Says no new road projects would be awarded until most of the critical ongoing projects are completed

The Minister of Works, Sen. (Engr) David Umahi has disclosed that over N16 trillion is needed to fund inherited road projects from the previous administration.

Engr. Umahi disclosed this on Thursday in Abuja, while giving accounts of his stewardship at the ministry in the last one year.

He bemoaned what he described as poor budgetary provisions for the construction of road infrastructure, adding that no new road projects would be awarded until most of the critical ongoing projects are completed and delivered to the use of Nigerian public.

The Minister assured Nigerians that in spite of over five cases pending in courts against its implementation, the ongoing Lagos-Calabar Coastal Highway project will proceed as planned.

He promised that nothing will impend the progress of the 700-kilometer Lagos-Calabar Coastal Highway, which runs from Victoria Island, Lagos, to Calabar, Cross River State, passing through several states, including Ogun, Ondo, Delta, Bayelsa, Rivers, and Akwa Ibom.

Speaking on the activities of the ministry, Umahi revealed that the Tinubu-led administration inherited projects valued at N14.4 trillion and a N13 trillion funding gap as at May 2023, stressing that reviewing the project based on current economic realities, the total fund required to complete them had reached over N16 trillion.

According to him, the old traditional method of funding Highway Projects is through the annual budgetary provision, noting that over the years, budget provisions seem to be inadequate to address the challenges of Highway Development.

The minister emphasized that  “Due to the removal of fuel subsidy and the floating of the Naira, though it is a very sound economic decision of this administration, and considering the fact that some of the projects have lingered for between 5 to 18years, consequently, the projects are being reviewed to match with current market realities.

“This position excludes all the new projects under the Renewed Hope Agenda and the four Legacy projects.

“Funding gap to complete all the inherited projects is about N13 trillion as at May, 2023 and will be more than N16 trillion when all projects are reviewed in line with current market realities”.

He hinted that the ministry in a bid to address the funding gaps, evolved several alternative funding mechanisms, including the Presidential Infrastructure Development Fund (PIDF), Sovereign SUKUK issued by Debt Management Office (DMO), Road Tax Credit Scheme (NNPCL, NLNG, Dangote, BUA, MIN, Mainstream Energy Solutions Limited GZI Industries) and use of Multi-lateral loans, Public Private Partnership (PPP)/Highway Development Management Initiative (HDMI) and the newly established Renewed Hope Infrastructure Funding model.

The Minister stated that 82 projects were approved under the SUKUK fund, with a total sum of N100 billion invested in road construction and rehabilitation in 2017, N100billion in 2018, N162.55 in 2020, N210.56 billion in 2021, for 2,812 km of road. Also, N110 billion was approved in 2022 and the approved 2023 SUKUK provision stood at N250 billion.

Umahi revealed that the sum of N2.590 trillion was approved by the Federal Executive Council for funding of 65 Highway projects under the Phases I & Il of the NNPCL Funding, adding that the projects were to cover a total of 6,358km, while the available funding for the projects up to year 2025 is N2.586trillion and the reviewed total contract sum due to inflation is N5.288 trillion.

He noted that the funding gap for the completion of both phase I &II is N2.702 trillion, adding that to date, the total payment made by NNPCL is in the sum of N840 billion and total outstanding funding approved by FEC is N1.750 trillion, while the projects are spread across the six geopolitical zones of the country.

“Other major Companies like NLNG Limited, Dangote Industries Limited, BUA International Limited, MTN Nigeria Communications Plc, Mainstream Energy Solutions Limited and GZI Industries projects have embraced the Road Infrastructure Development & — Refurbishment Tax Credit Scheme programme. The funding exceeds the sum of N2.08trillion covering a length of 1,548km”, he stated.

Speaking on the ongoing Lagos-Calabar Coastal Highway project , the minister said the project will proceed as planned despite the court cases challenging its implementation, adding that the present administration is committed to seeing the project through and that all necessary legal and procedural requirements have been met.

The minister said “We are paying compensation. We are following the corridor right of way. We are following the corridor that is legally allowed for the federal government,”

Umahi, who dismissed claims that the project lacked proper authorisation, also criticized the basis of the court case, saying “And so, we don’t know what they are taking to court.”

Umahi highlighted concerns regarding the project’s procurement process, noting that it had been approved by the Federal Executive Council under the Restrictive Procurement Act.

The minister said, “My permanent secretary is a procurement expert, and I have a very good department of public procurement and good directors. But the project was approved by the Federal Executive Council under restrictive procurement.”

Umahi explained the cost and scale of the project, noting that comparisons to other international projects were unfounded.

In his words: “I’ve had to run even the cost of the project at 4 billion per kilometre. And yet, people still come to say, oh, this number of lanes in Egypt is 1.8 billion. And it is 300 kilometres,” he said, criticising those questioning the project without sufficient knowledge.

The Minister informed all stakeholders that all environmental and social impact assessments had been completed and that the project was included in the 2023 supplementary appropriation, adding  “We have EIA certificates on the project. That’s number one. Number two, was the project listed in the appropriation list? The project is in the 2023 supplementary appropriation.”

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