FG’s Obligations to Road Contracts Valued at N2.6tn


•Requires N500bn annually to plug deficit •House c’ttee mulls interventionist funding strategy

BY James Emejo in Abuja

The federal government’s total contractual commitment to the construction sector particularly roads and bridges is currently valued at about N2.6 trillion, THISDAY has learnt.

With an appropriation of about N266 billion and outstanding liabilities of N300 billion as at the last count, actual budgetary releases to the Federal Ministry of Works is said to be below N200 billion.

The Chairman,  House Committee on Works,  Hon. Toby Okechukwu, told THISDAY in an interview that a minimum of N500 billion is needed annually to address the deficit in road infrastructure.

He said the ministry required complete funding of whatever is budgeted to make progress in roads construction.

“That’s the minimum if you are serious on infrastructure,  it’s not a joke,” he said.

According to him, “The minimum we can do is that if we budget N250 billion or N266 billion,  you fund it completely. That’s the way to spend yourself out if recession. That’s the way to get most Nigerians gainfully engaged. That’s the way to circulate and titrate money in the economy.

“What I’m saying in affect is that though funding has fairly improved, but the minimum we can do is to fund completely. When you look at what happens in other jurisdictions,  Zambia for instance,  the minimum they spend on roads in a year is $1 billion dollars.”

However,  appropriation to works in the 2017 budget was increased to about N298 billion, representing improvement from about N240 billion in the previous budget.

Okechukwu also disclosed plan by the committee to press for the passage of the Road Fund Bill on the floor of the House of Representatives.

The proposed bill, which is expected to address the missing link in road construction, will among other things introduce a strategic approach to make annual appropriation for roads to be interventionist, requiring government to routinely intervene in that segment.

He said: “We are on the verge of considering; our committee has submitted to the parliament a Road Fund Bill where we are looking at other avenues of raising funds for roads, so that the annual appropriation becomes an intervention to aid your seed capital. 

“And that’s the only way to cure the defect even if it’s N50 billion or N100 billion you get annually,  it becomes something you build on.”

According to him: “Even if the annual intervention comes by way of N100 billion or N200 billion,  you add it to the seed capital and what does that bring to the table?  It means you can stay as a minister and award an oral contract and tell somebody please go and repair this road for me.  He will go knowing that you have money that you must always generate annually.

“But presently,  the contractors or the people who do business in the sector know the budget more than the people who are preparing it because they’ll wait and see whether there’s money in the budget before they go to the road; because they know if it’s not in the budget, their job is just gone- they won’t make any commitment on the road.

“But if you are generating your own money,  they will say at least, if this man doesn’t finish paying me this year,  he can pay me next year because he has a reliable source of revenue. And this happens in most other countries.”

Okechukwu further canvassed for payment of tolls on roads as a way forward.

He said: “And we’ve not learnt to pay for what we use. Until we are able to pay for the things we use, whether it’s for the roads or power, we will always be in this kind of situation…

“If we don’t begin to pay for the things we use and appreciate that it is cheaper in the long run,  so shall we be in this situation because essentially, it is better for you to pay roll gate than to have to spend that money on repairing your cars. 

“What we have failed to do as a country is looking at the opportunity cost of the  expenses we are not making, of the payment we are not doing….the opportunity cost is heavy and that’s pure economics.”

Continuing, he said:”It’s too consequential and the burden on this country for those imperfections are enormous. And that’s why the Road Fund Bill is coming to address that missing link not because it’s innovative or because we are terribly creative,  but because we are doing what other countries have done and it’s in our own enlightened self interest to make sure it begins to work.

“Otherwise, you’ll be getting discretionary expenditure on roads: development, particularly road infrastructure doesn’t depend on the wims and caprices of anybody, whether you ate a legislator or a minister, it should be dependent on what money you have available and that source must always be reliable.”