Works minister David Umahi says President Bola Tinubu’s government needs over N16 trillion to complete inherited federal road projects nationwide.
Mr Umahi disclosed this when he briefed journalists on the works ministry’s achievements under Mr Tinubu’s ‘Renewed Hope Agenda’ on Thursday in Abuja.
The works minister said the Tinubu administration inherited 18,932.50 kilometres of ongoing road projects, totalling 2,064 contracts.
The minister stated that the total value of all the ongoing projects as of May 2023 was N14.42 trillion. He also revealed that the amount certified was N4.73 trillion; however, N3.12 trillion was paid, and the amount owed contractors for certified works was N1.61 trillion.
“The funding gap to complete all the inherited projects is about N13 trillion as of May 2023 and will be more than N16 trillion when all projects are reviewed, in line with current market realities. This is due to the removal of fuel subsidies and the floating of the naira.
“It is a very sound economic decision by this administration, considering the fact that some of the projects have lingered for between five and eight years. Consequently, the projects are being reviewed to match current market realities; this position excludes all the new projects under the Renewed Hope Agenda and the four legacy projects,’’ Mr Umahi explained.
According to him, the old traditional method of funding highway projects was through the annual budgetary provision.
He said, however, that over the years, budget provisions have seemed inadequate to address the challenges of highway development. Mr Umahi stated that to meet funding for road projects, the ministry embraced alternative funding mechanisms like the Presidential Infrastructure Development Fund (PIDF) and Sovereign SUKUK issued by the Debt Management Office (DMO).
The minister also said the funding included the Road Tax Credit Scheme (NNPCL, NLNG, Dangote, BUA, MIN, Mainstream Energy Solutions Ltd., and GZI Industries) and multilateral loans. Others are the Public Private Partnership (PPP)/Highway Development Management Initiative (HDMI) and the newly established Renewed Hope Infrastructure Funding model.
He said 82 projects were approved under the SUKUK fund, with N100 billion invested in road construction and rehabilitation in 2017.
Mr Umahi added that the projects included N100 billion in 2018, N162.55 billion in 2020, and N210.56 billion in 2021; for 2,812km of road, N110 billion was approved in 2022, and the approved 2023 SUKUK provision stood at N250 billion.
He said N2.59 trillion was approved by the Federal Executive Council (FEC) for the funding of 65 highway projects under Phases I and II of the NNPCL Funding. The minister said that the projects were to cover a total of 6,358km, while the available funding for the projects up to 2025 was N2.59 trillion.
“The reviewed total contract sum due to inflation is N5.288 trillion. The funding gap for the completion of both phases I and II is N2.702 trillion. To date, the total payment made by NNPCL is in the sum of N840 billion, and the total outstanding funding approved by FEC is N1.750 trillion. The projects are spread across the six geopolitical zones of the country,’’ said Mr Umahi.
(NAN)
