The Minister of Works and Housing, Babatunde Fashola, has said cases of road projects abandonment by contractors across the country may linger unless federal lawmakers adopt a new budgeting process that would discourage allocating meagre funds for projects in the nation’s annual budget.
Fashola stated this when he appeared before the Senate Committee on Ethics, Privileges and Public Petitions on Thursday over the Ife-Ifewara Road which was rehabilitated by the Redeemed Christian Church of God at a cost of N188m following its abandonment by a contractor, Messrs Cartil Construction Nigeria Limited.
He also hinted that his ministry had started taking steps, based on legal advice, to publish a blacklist of erring contractors.
Sunday Punch had last week exclusively reported that meagre sums were allocated to multi-billion naira projects in the current fiscal year.
A copy of the 2021 budget of the Federal Ministry of Works obtained by our correspondent in Abuja shows that the ministry allocated a series of funds to the 711 roads and bridges projects totalling N276, 243, 984, 521:23, to be sourced from the Capital Development Fund.
A critical study of the budget revealed that the money voted to the various highway and bridge projects were meagre and could not make much impact on the affected infrastructure.
For instance, the ministry voted N24.8m for the emergency repairs of the Ibadan -Ife dual carriageway.
It also voted for additional N200m for the dualisation of the Ibadan -Ife -Ilesha Road.
The FMW & H also planned to spend a meagre N100m on the rehabilitation, construction and expansion of the Lagos – Ibadan dual carriageway this year.
However, Fashola confessed before the senators on Thursday that the idea of allocating funds to projects already awarded annually was delaying early completion of road projects.
He said, “The reality today is that once a contractor looked at the budget and discovered that it was only N50m that was allocated to him, he would just keep his equipment idle and wait.
“This speaks to a larger matter that the Senate could look into, perhaps it would lead you to do a proper budgeting for our roads.”
Fashola advocated an arrangement whereby lists of approved road projects would be listed in the budget without indicating any amount meant for its execution.
The Minister said, “I have advocated fund budgeting. If we are going to spend for instance N10 on all roads in Nigeria, we would list all the roads without putting any amount against any of the roads for the contractors handling them to see.
“We need to create competition by ensuring that the first contractor who completed his project, gets paid. That was what we did way back in Lagos.
“Once contractors see that a certain amount of money was put on his road project, and know that the money was not capable of doing anything on the road, he will stop work.
“Those are matters of public good that can come out of your recommendations to be tabled at plenary and perhaps into law making.”
He said there could be instances where contractors perform poorly due to poor releases made to them but that the Ministry could just issue a warning letter.
He said, “Sometimes, our legal department advises against taking legal actions against contractors because of certain defence they could come up with against the ministry.
“There are some cases we settle by arbitration. It is not as if we are not doing anything about defaulting contractors.
“In some cases, contractors sue us. Part of our defence or counter claims is to say the value of naira when the contract was awarded has changed.
“There are so many other considerations. One of the legacies of the fact was that there were years when existing projects had zero budget. One of the things that has changed is that it no longer happens.”
He, nevertheless, said that his ministry has started a list of contractors who abandoned projects awarded to them.
He said, “The legal department of the ministry is currently in the process of commencing legal actions against the contractors who are in breach of agreement and these are matters often not reported.
“This is something that I particularly had been at the forefront of filing claims against contractors who failed to keep their own end of the bargain and also trying to recover whatever has been paid for work not done.
“In some cases, I’m even looking at claiming compensation for time value of money, that is, what we should have done with the amount about 10 years ago that the funds were released to the non-performing contractor.”
He added, “However, the difficulty in that area is often that we discovered that there could be no budgetary provisions for the project at that time.
“I just want to let members of the public know that we are not just sitting down without taking action against contractors who haven’t kept their own side of the bargain.
“We are compiling a list of contractors that we will publish a blacklist but there has to be justification proceeding to that level based on legal advice.”