Govt needs N19tn to complete 2,604 ongoing projects – Umahi

The Minister of Works, David Umahi, has stated that the financial requirements to successfully complete the ongoing 2,604 road projects inherited by the current administration have increased to N19tn, an increase from the previously estimated N13tn.

This substantial escalation in cost highlights the growing challenges associated with infrastructure development and the necessity for additional funding to address these urgent projects.

He said this at a press briefing in Abuja on Monday at the ministry headquarters to update Nigerians on road infrastructure development.

He explained that the cost increased due to the dwindling foreign exchange rate and the price of bitumen.

He explained that despite these issues, the ministry had completed 85 per cent of 330 emergency projects awarded by the government in July 2024.

Umahi also berated the Chairman of the House of Representatives Committee on Federal Roads Maintenance Agency, Remi Oseni, over his comments that the minister had misplaced his priorities on the state of roads across the country.

He said, “The issue of fewer priorities by the House of Rep members was the variation of price, and that was a very terrible programme that was eroding the little resources we put in the budget to do projects.

“Before we came on board, there were these issues of variation of price and foreign exchange differential. Some contractors were claiming them. Essentially, two of them. But that less priority that he talked about was that we stopped them. And we have no regrets about stopping them.

“And let me say to him that the projects Mr. President inherited were a total of 2,604 projects as of May 29, 2023. The total cost was N13tn. That’s what the President inherited. And a debt to contractors of N1.6tn. And when you look at the variation because of the fuel subsidy removal and the floating of the naira against the dollar, if these projects are reviewed, the cost of these projects will increase to N19tn, just to complete the ongoing projects.”

The minister further noted that “Mr President manifested all the projects in the 2024 budget with the hope of giving him time to look for resources, including loans, to do these projects.

“But the truth I want the public to know is that N13tn projects inherited, today it should be over N20tn because, at that time, it was N500 to a dollar. Today the dollar is N1,700. At that time the ton of bitumen was like N600,000 per ton. But today it is N1.2 million per ton. And so you have to understand this. There is a transition before we stabilize.”

Umahi stated that this was why in the 2023 supplementary, the President approved N300bn to take care of several palliatives.

“By next week, we are going to publish what success we have achieved in those N300bn projects. We used it to procure over 330 roads, palliatives, and bridge repairs, which were properly procured and properly executed.

“As of today, we have achieved over 85 per cent completion. And so when we publish it, I want him to go there and verify. And I request that he tenders an all-reserved apology because all he did was to represent the contractors and incite the public against the government that brought him in,” he stated.

The minister added that about 10 projects have been terminated by the current administration as they had been awarded over one and a half decades ago.

According to the works minister, the President should be commended for paying attention to special mega road projects, and there is a priority given to the ministry in terms of the supplementary budget for 2023/2024, while they inherited N1.6tn in debt to contractors.

On the issues of the Federal Emergency Road Maintenance Agency, Umahi maintained that their hands are clean and there is nothing to hide. According to him, some contractors are unhappy with the ministry to the point of wanting the removal of the minister.

He noted, “There is no way you expect some project that lasted up to 20 years to be done in one year. The Chairman said we are awarding projects that we are not ready to execute. And that is where the oversight function comes in. You have the records of what we have awarded.

Regarding the Abuja-Kaduna-Kano dual carriageway projects awarded to Julius Berger Plc, he reiterated that after the expiration of seven days, “we will have no option but to revoke it and award the project to another construction firm to complete it.”

He therefore hinted that the ministry has a total of N600bn in certified jobs for 2024 and N726bn under the NNPC tax credit scheme.

Umahi said the insecurity in the North-West had delayed some of the ongoing projects, with 50 workers kidnapped for ransom by bandits.