|
Listen to article
|
The Federal Government is staring down the barrel of a massive N16 trillion price tag to finish what others started. Minister of Works, David Umahi, revealed that the country’s road network is still a long way from being fully developed, with a hefty inheritance of unfinished projects.
At a press conference in Abuja on Thursday, Minister of Works David Umahi shared the successes of his ministry under President Tinubu’s Renewed Hope Agenda.
But he also revealed a sobering reality: the Federal Government needs N16 trillion to finish the numerous road projects left behind by previous administrations.
Umahi revealed that the present administration was left to grapple with a colossal infrastructure burden: 18,932.50 kilometers of unfinished road projects, spread thin across 2,064 contracts – a daunting task that demands swift attention and strategic action.
The minister disclosed that the total value of the inherited road projects, as of May 2023, had ballooned to N14.42 trillion, a staggering sum that underscores the need for careful financial planning and management to bring these projects to fruition.
Umahi revealed that while N4.73 trillion had been certified, only N3.12 trillion had been paid, leaving a substantial N1.61 trillion in unpaid bills – a challenge that requires urgent attention.
“The funding gap to complete all the inherited projects is about N13 trillion as of May 2023; that 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,’’ Umahi said.
Read also: Legal Battles Won’t Halt Coastal Highway, Umahi Asserts
According to him, the old traditional method of funding highway projects was through the annual budgetary provision.
He pointed out that the funding allocated for highway development has consistently fallen short of the mark, leaving a trail of unmet needs and unfulfilled promises.
To bridge the funding gap for road projects, Umahi revealed that the ministry has been exploring innovative financing solutions, including the Presidential Infrastructure Development Fund (PIDF) and Sovereign SUKUK, a shrewd move facilitated by the Debt Management Office (DMO).
Umahi further revealed that the ministry has been exploring a diverse range of funding options, including the pioneering Road Tax Credit Scheme, backed by key players such as NNPCL, NLNG, Dangote, and BUA, alongside multilateral loans that are providing a vital financial boost.
Additionally, the minister cited the Public-Private Partnership (PPP) and Highway Development Management Initiative (HDMI) as key funding pillars, alongside the recently launched Renewed Hope Infrastructure Funding model, which promises to inject fresh momentum into road development.
Umahi disclosed that the SUKUK fund has made a substantial impact, with 82 projects approved and a total investment of N100 billion in road development and refurbishment in 2017, demonstrating a major boost to the nation’s infrastructure sector.
