Nigerian Minister of Work, Engr David Umahi has recommended increment of the Ministry’s present budgetary allocation to about N1.5tr to complete at least 10 selected critical roads and bridges in each of the six geo-political zones of the country.
Umahi who made this recommendation during the Presentation and Defence of Ministry’s 2024 Busget to the Joint Committee on Works at National Assembly on Monday, requested for provision of Emergency Fund of about 30% of Budget Provision to cater for unforeseen emergencies that regularly occur on the road network especially during the rainy seasons.
According to him, “The main challenge to highways development in the country remains inadequate funding. As at date, Government is committed to highway contractors to the tune of about N13.835 trn with total of about N1,507,873,365,516.02 unpaid certificates for executed works.
“Secondly, the dearth of younger Engineers/Technical Officers in the Ministry as a result of embargo on employment is affecting effective project supervision at the sites.
“It is expected that more sources of funding of highway projects be explored as well as lifting the embargo on employment of needed Engineers/Technical officers at middle level to enhance supervision of projects.
“Our Ministry has set up six committees to review all debts, approved and unapproved variations on prices of basic rates, and all augmentations that occurred before May 29th 2023 and from May 30th 2023 till date”, Umahi added.
The Minister also demanded for urgent review of all certified debts to contractors and if possible, convert same to Promissory Notes to contractors so that the Ministry can get properly focused in using any fund appropriated to them to pursue the set objectives.
He said, “Many contractors are presently out of sites because they have exhausted their contract VoPs and needed the projects unit rates to be reviewed.
“It will be good that all VoPs and augmentations of all the projects are reviewed and those that are owed be converted to Promissory Notes, while unit rates regime will take effect on contractors in line with the current realities of the construction industry.
Umahi advocates for more eligible companies to be encouraged to key into the Road Tax Credit Scheme to increase the number of private sector interventions.
“This means front-loading their tax liabilities to solve our present challenges; Raising of Bonds from the Capital Market to finance road development in the country.
“Creation of an enabling environment by fixing the roads so that the deployment of the Highway Development and Management Initiative (HDMI) can be effective; and That appropriations for projects be such that no projects when started should last for more than four years”, he said.
Speaking on the issue of Asphalt versus Concrete pavement, the Minister clarified the misunderstanding of the Ministry’s new policy direction regarding the use of Rigid pavement on her projects.
Saying that no Contractor is prevented from executing the scope works originally signed with the client once certain conditions are observed, which are provision of a 15year shelf-life Insurance Guarantee for the works and a maximum of 5% of Variation of Price (VoP) in the Contract.
Adding that the Ministry’s new policy is to prevent excessive augmentation of contracts considering the scarcity of Forex and weakening of the Naira against the Dollar which makes the cost of bitumen (which is fully imported)
“Increase in geometric progression against the arithmetic progression rise in cement prices in concrete road pavements. In these times of rising inflation and scarce resources, the country needs to look inwards to conserve foreign exchange” he noted.
Umahi commended the President of the Federal Republic of Nigeria, His Excellency, Senator Asiwaju Bola Ahmed Tinubu, GCFR for the intervention of his Renewed Hope administration in the Works sub-sector and approval of an enhanced budget envelop for the Federal Ministry of Works.
“We also thank the leadership of National Assembly, the Chairmen and members of the Works Committees and indeed members of the National Assembly for their painstakingness in ensuring speedy passage of the 2024 Appropriation Bill”, he said.
The Minister noted that in spite of all odds, 21 major road and bridge projects have been completed and some were commissioned, while others are ready for commissioning.
He said a total cost of the completed major road and bridge projects is in the sum of N498,802,362,642.46 with a total length of 489. 97km.
“Also, to be completed in 2024 is the 260 Emergency Repair works in the 2023 Supplementary Appropriation at a total cost of about N260bn. The detail of completed projects is attached as Annex VI”, Umahi said.