Disappointed by Foreign Investors, Ayade Seeks N648b to Fund Superhighway

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Ben Ayade

By Bassey Inyang in Calabar

Unable to attract foreign investors to partner with him on the superhighway signature project, Governor Ben Ayade of Cross River State has made a volte- face, writing to the State House of Assembly to seek approval to borrow N648b to fund the superhighway.

This latest move is believed to be aimed at further subjecting an already cash trapped Cross River State into hard financial state in the event that he loses at the March 9 polls.

A letter written and signed by the Secretary to Cross River State Government, Mr. Tina Agbor acting on the directive of the governor has exposed the governor’s latest resort to an Irrevocable Standing Payment Order (ISPO) of the sum of N648.8b in favour of Messrs Sydney Construction Nigeria Limited.

The letter sighted exclusively by THISDAY dated February 19, 2019 with reference number SSG/S/300/VOL.XVII/1199, addressed to the Speaker of the State House of Assembly, Hon. John Gaul Levi, is seeking the state legislature to consider and pass a resolution granting “an approval for the state government to issue an ISPO of N300m monthly through the United Bank for Africa (UBA) in favour of Messrs Sydney Construction Nigeria Limited for the Construction of the 275KM Calabar-Ikom-Katsina-Ala Super Highway subject to issuance of Interim Payment Certificate (IPC).”

The correspondence to the Legislature for the Award of contract for the construction of the 275KM Super highway to Sydney Construction Nigeria Limited valued at the sum of N648, 870,730,739.23 which is expected to be drawn through an ISPO.

It reads, “In line with Article 6A and 6B of the Contract Agreement, an Irrevocable Standing Payment Order in the sum of N300, 000, 000 (three hundred million naira only) monthly is required in favor of Messrs Sydney Construction Nigeria Limited in respect of the construction of the Super Highway Project.”

It would be recalled that the State Executive Council meeting of Monday, February 18th, 2019 had approved the issuance of an ISPO to United Bank forAfrica to the sum of N300m monthly to Sydney Construction.

 Speaker of the State House of Assembly, Hon. John Gaul-Lebo, denied the allegations of any offer of gratification from the governor for them to do their legislative duties.

Lebo said, “Nobody has dangled anything, if it is not legitimate we will not do it”. He however confirmed receipt of the letter from the governor requesting the Resolution of the House in respect of the Irrevocable Standing Payment Order.

According to him, “Yes, the request has been sent to the House Committee on Finance and Appropriations to look at it side by side with the budget proposal of 2019” “What they need from the House is a Resolution to the effect that the House has given consent and it is provided for in the budget. What we need to see for us to give the approval is that their proposal had been sent to the Debt Management Office; to the Federal Ministry of Finance and that the debt management has a Repayment Plan and an Insurance for that purpose”.

Lebo clarified that, “It is a lie. The Governor is not dangling any amount as offer to us to approve it”. “We referred it to the committee and it was sent on the day we were taking the second reading of the 2019 Budget. If you read the resolution of the House, it is subject to only when the budget has been passed. Because all of these conditions we are talking about will have to be sorted out from the budget. It is the budget that will show us that they are ready to take an ISPO”.

The speaker’s response further hinted that the state governor had already been under the burden of an ISPO. According to him, “what they have done is scheduled monthly borrowing which they collect from Revenue Mobilisation”,

“They already have two existing ISPOs, probably at about N100m and another for N50m, it’s optional only when they lack in payment of salaries. In the last year, they used it only six times, that was the only time they could not meet up from IGR and then Revenue Mobilisation gave them because it was light. In all of those months they collected, what they did was, if they had one billion, they paid N300m to debt management as guarantee that they can collect ISPOs in the next three months; I can tell you that because I have the budget report for last year and those things are there. So for this year, the House will need to see from the budget that there is a plan to take an ISPO, then the house needs to see from there that they have an intention of paying back and this is how they intend to pay back.”

“With the request of N300m, they need to show that it is from the cumulative contribution of their IGR, which cannot be more than N300m; that they can fund and that they have approval from Debt Management Office to pay that, in the sense that, debt management already knows we have been collecting ISPOs to pay salaries; in months that we don’t meet up, and then the ISPOs are raised to pay for certain essential services in the months that we don’t meet too, we have that.”

“That ISPO, the way it is done, it’s collected there on a monthly basis, it is pay as you go. If they collect for one month, they pay back the next month, if they default in any month, they don’t give them. If you default in two months, they will stop it”.

“What they need from the House is a resolution to the effect that the House has given consent to the extent that it is provided for in the budget, and what we need to see for us to give the approval, is that their proposal had been sent to debt management office and to the federal ministry of finance, and that the debt management has a repayment plan and an insurance for that purpose. What has come to us is the proposal to debt management and debt management say they want to see a resolution of the house to that effect.”

Meanwhile, Ayade had previously boasted that funding for his two signature projects were already on hand and that many investors were already jostling to invest in the State and possibly take up the Super Highway construction on the basis of Public Private Partnership PPP and to sign a Build Operate and Transfer agreement. The resort to ISPO has been widely condemned.

In addition, the controversies trailing the projects range from communities and NGOs protest against the superhighway, inability of the state government to secure approval for Environmental Impact Assessment (EIA) from the Federal Ministry of Environment.