N392bn projects debt: Senate asks FG to consider pension fund

The Minister of Works and Housing, Babatunde Fashola, on Wednesday, told the Senate that the Federal Government owe construction firms handling 711 road projects across the country N392bn.
The debt, according to the minister, was higher than the N276bn, proposed as budgetary allocation for road projects in 2021.
Fashola who stated this on Wednesday in Abuja while defending the 2021 budget of his ministry before the Senate Committee on Works.
He said, “With the situation on ground, a stop has come for new projects and the country needs to prioritise the existing ones in order to complete some of them.”
He said N6.62tn was needed by the Federal Government to fund the 711 road projects across the country.
The minister, however, said the resources to achieve that were not available now, hence the need to prioritise the very important ones.
He said, “We do not have the resources that we need to fix our road infrastructure at once; the very reason we need to prioritise what want to do.
“The situation on ground requires us to cut our coat according to our cloth and not according to our size because no good will come out of more new road projects now.”
He however explained to the committee that in order to remedy the situation, the 711 projects had been categorised into four different areas of funding and execution.
The first category, he said, was the highway projects financed with the Presidential Infrastructure Development Fund.
The projects, he said, covered projects such as Lagos-Shagamu-Ibadan dual carriage way, the 2nd Niger Bridge and the rehabilitation of Abuja-Kaduna-Kano dual carriage way.
The second category, according to the minister, are highways projects financed with the Sovereign Sukuk Fund totalling 44 roads across the six geopolitical zones.
Fashola said the third category included the highways project financed under the tax credit like the Lokoja-Obajana-Kabba-Ilorin road, Apapa-Wharf Road in Lagos and the Apapa-Oworonsoki-Ojota Expressway, among others.
Those in the fourth category he stated are highways projects funded from multilateral loans.
The Chairman of the Committee, Senator Adamu Aliero, suggested to the minister to look into pension funds for some of the road projects.
He said, “In view of the scarce resources and poor revenue generation which the country is currently facing, I think the ministry could consider applying for funds from the PenCom funds.”
Fashola, however, said he said he was not in a position to do that.
He said, “The Central Bank of Nigeria seems to be in the best position to work out such arrangement.
“It will be helpful if that type of funding can be put together,” he said.
Aliero, however, said the fact was that the budgetary allocation to the ministry and its agencies remained one of the highest, but was like a drop of water in the ocean.
“This is because of the humongous work to be done on Nigerian roads and the current debt profile of the ministry which is about N392bn,” he said.
Punchng.com