The Federal Government needs over N16 trillion to complete Road Projects – Umahi, projects inherited from previous administrations, according to Minister of Works, David Umahi. Speaking at a press briefing in Abuja, Umahi provided updates on the Ministry’s progress under President Bola Tinubu’s Renewed Hope Agenda.
FG Requires Over N16 Trillion to Complete Inherited Road Projects – Umahi
Road Projects – Umahi revealed that the current administration inherited 18,932.50 kilometers of ongoing road projects, involving 2,064 contracts valued at N14.42 trillion as of May 2023. Of this, N4.73 trillion has been certified, with N3.12 trillion paid, leaving a balance of N1.61 trillion.
He highlighted that the funding gap to complete these projects stands at around N13 trillion as of May 2023. However, with adjustments for current market conditions, including the removal of fuel subsidies and the floating of the naira, the total funding required is expected to exceed N16 trillion.
“This administration’s economic decisions are sound, considering that some projects have lingered for five to eight years,” Umahi stated. Consequently, the Ministry is reviewing these projects to align them with present market realities, excluding new projects under the Renewed Hope Agenda and four legacy projects.
Regarding funding, Umahi explained that while highway projects were traditionally funded through annual budgetary allocations, these have been inadequate. To bridge the funding gap, the Ministry has adopted alternative methods, such as the Presidential Infrastructure Development Fund (PIDF), Sovereign SUKUK issued by the Debt Management Office (DMO), the Road Tax Credit Scheme, and multilateral loans. Companies like NNPCL, NLNG, Dangote, BUA, MIN, Mainstream Energy Solutions Ltd., and GZI Industries have contributed under these schemes.
The Federal Executive Council (FEC) approved N2.59 trillion for 65 highway projects under Phases I and II of the NNPCL Funding, covering 6,358 km. However, due to inflation, the reviewed contract sum is N5.288 trillion, leaving a funding gap of N2.702 trillion. To date, NNPCL has paid N840 billion, with an outstanding funding need of N1.750 trillion.
The projects span across Nigeria’s six geopolitical zones. However, several road projects have been abandoned by contractors, citing insufficient funds due to inflation and rising costs of imported machinery. Notable examples include the Bodo-Bonny road by Julius Berger, the Lokoja-Benin and Obajana Junction-Benin roads in Kogi and Edo States, and a 15 km section of the East-West Road from Eleme Junction to Onne Port Junction in Rivers State.
