The Federal Government has told the Senate that it was having outstanding liabilities and owed contractors handling road and housing projects across the country to the tune of N956billion as of September, 2022, just as he lamented the drastic budget cuts earmarked for the road and housing sectors in the 2023 fiscal year.
The government said that of the N956billion outstanding liabilities, it was owing are for contractors handling the National Housing Scheme N191.75billion while the remaining balance of N765billion was owed to contractors handling road projects across the country from the total contract value of N10.4trillion.
It also said that it has touched on 8,352kilometres of roads in the last seven and a half years across different parts of the country out of its total contract value of N10. 4trillion earmarked for road construction in its development plan.
According to the government, it was part of its infrastructure development roadmap in the country.
Speaking in Abuja when he appeared before Senator Adamu Aliero, Kebbi Central-led Senate Committee on Works and that of Senator Sam Egwu, PDP, Ebonyi North-led Senate Committee on Housing to defend the budget for 2023, the Minister of Works and Housing, Babatunde Raji Fashola, SAN, disclosed that the Federal Government has a total of 36,000kilometres of roads across the country.
Specifically, in his submissions before the Senate Committee on Housing, Fashola said that the National Housing Project which started in 2016 has been executed in 35 out of 36 states of the federation with 1,250 contractors, adding that the 6, 000 housing units have created 46 construction sites across the country, 29, 030 direct employment and 57, 874 indirect employment.
He said, “The National Housing Project is very much on the course but the problems of the paucity of funds through drastic budget slash and outstanding liabilities of N191.75billion, need to be urgently looked into.
“ In the 2022 fiscal year, while the total capital votes for both Works and Housing Components of the ministry was N441.18billion, the proposal made for the 2023 fiscal year is N146billion.
“Out of the proposed N146billion as capital expenditure for the entire ministry in 2023 fiscal year, only N45billion is earmarked for the Housing sector.”
Making similar submissions to the Senate Committee on Works, the Minister said: “The main challenge to highways development in the country remains inadequate funding. As at date, the government is committed to highway contractors to the tune of about N10.4trillion while a total of about N765billion are unpaid certificates for executed works.
“Secondly, the shortage of younger engineers/technical officers in the ministry as a result of the embargo on employment is affecting proficient project supervision at the sites.”
Speaking on the achievements of the ministry under his watch, Fashola, who noted that while some of the roads have been successfully executed and completed; others were in advanced stages, said that out of the contract value of N10.4trillion for the construction of roads.
The minister lamented to the Senate Committee members to make provision for the outstanding liabilities owed contractors’ suppliers for executed work in their final review of the ministry’s budget for 2023, warning that the non-payment of the money could affect the livelihood of many families along the value chain.
Fashola said, “These are monies owed to contractors’ suppliers who supply building materials, cement etc. It is very important we find a solution otherwise we will have consequential social and economic effects.”
The minister, who noted that the ministry intervened in the construction of 85kilometres of roads in several federal tertiary institutions as part of the ministry’s investment in the education sector, said that the ministry also initiated major repairs of bridges under its 2022 budget even as he announced that the bridge component of the Second Niger Bridge is completed; pointing out that only the Onitsha and Asaba roads components of the project are left to be completed.
Fashola welcomed the Tax Credit arrangement initiated by the Federal Government in 2019 which has enabled the government to transfer the construction of some key roads to some private entities like the Dangote Group, MTN, PZ and subsidiaries of NNPC.
The total budget for the Ministry of Works and Housing for 2022 stood at N515billion with N441.1billion as capital for works.
In the projection for 2023, the budget for the ministry was slashed to N198billion, out of which N45billion was allocated to housing.
Fashola lamented the paucity of funds, especially in the face of outstanding liabilities which he said would greatly hamper the ministry’s ability to embark on new projects in 2023.
However, chairmen and members of the committees commended the minister for a series of roads and housing projects executed across the country in the face of scarce resources and other challenges.
The Chairman of the Senate Committee on Housing, Senator Sam Egwu, told the minister to use the proposed N45billion capital votes in the 2023 budget to complete the remaining 3,000 units of the 6,000 units National Housing Project.
At the Committee on Works, the Minister was tasked with ensuring the completion of the 2nd Niger Bridge this year and the critical road projects he highlighted.