…Reviews 2,604 inherited projects worth ₦13trn
The Federal Executive Council (FEC) Wednesday approved ₦740 billion for the Julius Berger stretch of the Abuja-Kano road.
Minister of Works Mr Dave Umahi said this while briefing State House correspondents at the end of the FEC meeting chaired by President Bola Ahmed Tinubu.
He said the Abuja-Kano road, previously slated for a tax credit arrangement, would now be procured without such a provision, with the 162-kilometer Berger section already approved for ₦740 billion.
The minister also announced the ommencement of construction on the Sokoto-Badagry road, with the Sokoto section to be flagged off imminently.
He said works on the Oyo-Ogbomosho road, a project stalled for 18 years, would resume soon while and the Makurdi-Katsina-Ala road would undergo significant repairs.
He said the FEC also tackled the inherited debt profile of ₦1.6 trillion tied to 2,604 projects, with a total contract value of ₦13 trillion.
He said the Ministry of Works has initiated a phased approach to project completion based on available funding.
He said key examples include the phasing of the Biu-Kangiwa-Kamba-Kaya Niger Republic road in Kebbi State, the Yola-Hong-Mubi road in Adamawa sate and the Kachako-Dambazua road in Kano state.
He said the council also approved advanced payment mechanisms to combat inflation and rising costs driven by fluctuation in exchange rates and petroleum prices.
“We presented a memo to FEC that where there is proof of funds, there is available funds, the Procurement Act allows MDAs to pay a maximum of 30% advance payments. And let me emphasise that this advanced payment. When you read the law, it say may pay.
“And so when people are giving contracts and they don’t mobilize, and they said, I’ve not paid mobilization, it is not legally binding, because the word says may pay. And so some people turn it shall pay. So no, it’s may pay.
“So where we have funds, and they will have a valuable fund beyond this 30% so what we are, you know, we requested from FEC is approved, that we first pay 30% which is the Procurement Act, and not more, and then when the contractor has started work, and to the satisfaction of the Ministry of works, we should be allowed to pay additional funds.
“Yes, the law allows us to pay in terms of you know, materials on site. But we are asking beyond that, what is the essence of this? Is to mitigate a lot of fluctuation and inflation, because we have a lot of you know, indices that affect the ministry of works like the petroleum you know it affects it.
“You know the dollar exchange rate also affects so we are doing everything to manage the resources within the available funds so that we mitigate inflation,” he said.
