Delta State House of Assembly has approved the request of Governor Ifeanyi Okowa for N3 billion short-term loan facility for the financing of priority road projects in the state.
The House at plenary presided over by the Speaker, Chief Sheriff Oborevwori in Asaba, also approved Okowa’s request to guarantee a credit facility to be obtained by the Delta Line Transport Services Limited.
The approval of the request, which was contained in a letter read by the speaker during the plenary, followed a resolution passed by the Assembly.
According to Okowa, there is urgent need for the state government to support some of its road’s contractors in accessing financing to aid accelerated execution of critical projects before the onset of the rainy season.
“The request has become expedient considering the almost N3 billion drop in federation accounts receipt in January 2019 when compared to December 2018 which had hindered planned disbursement to the contractors.
“Most of the contractors are already on site and have generated payment certificate for works already executed which are yet to be defrayed,” he said.
Okowa said that the funds were required to make progress in the relevant project execution, adding that the state executive council at its meeting of February 5, 2019 considered and approved that the state government should support certain contractors for the state’s critical priority projects.
Okowa said: “In obtaining the short-term loan facility amounting to N3 billion only from Zenith Bank with the state government bearing the cost associated with the facility as requested by the contractors.”
The Majority Leader, Mr Tim Owhefere thereafter moved separate motions for the House to receive the governor’s request for further consideration and approval.
The motion, which was adopted through a voice vote by the Assembly, was seconded by Mr Emeka Nwaobi, representing Aniocha North constituency in the state House of Assembly.
Also, the Assembly approved Okowa’s request to guarantee credit facility to be obtained by the Delta Line Transport Service Limited.
The request was also contained in a letter read by the speaker during plenary.
Okowa said that the loan was in a bid to revamp the ailing Delta transport service which had over the years relied on continuous assistance from the state government to meet salaries and other recurrent expenditure obligations as well as capital expenditure despite being a business that should generate revenue.
He said that the State government sold 60 per cent equity of the Delta Line to God is Good Motors Transport Development Company by way of a public private partnership arrangement with the state government retaining 40 per cent equity in the company.
The governor said that sequel to the sale which involved defrayment of outstanding commitments including salaries arrears, the new management of Delta Line submitted a five year business plan, among other things.