Progress On Second Niger Bridge Stalled By FG’s Wrong Financing Options – Fashola

The Minister of Works, Power and Housing, Mr. Babatunde Fashola, on Tuesday cautioned against the blame game over the seeming inability of the federal government to make reasonable progress towards the completion of the Second Niger Bridge as well as the Lagos-Ibadan expressway.

He said should buck passing be allowed, there will be “enough to go round.”
According to him, while the capacity and competences of contractors for both projects are not in doubt, given their track record, the problem had often been the financing choices adopted by the government.

The minister, who spoke at an investigative hearing organised by the House Committee on Works on the nature of the contract and/or concession arrangement on the second Niger Bridge and the Lagos-Ibadan expressway also blamed successive governments for not making provisions for road construction even at the peak of the country’s prosperity.

He said at the peak of prosperity, investments were directed into oil and gas as well as portfolio services while attention was not paid to road construction.
However, Fashola told lawmakers that the federal government had made provisions for the Second Niger Bridge and the Lagos-Ibadan road in the 2018 budget.

According to him, a total of N20.5 billion had been earmarked for the Lagos-Ibadan expressway while the Second Niger Bridge will receive N5.05 billion.
But, members of the committee insisted that the allocations were too small with respect to the magnitude of work to be done on both projects.

Fashola said often times, when government enter into a public private partnership (PPP) agreement, it doesn’t bother to make provision for its funding in the budget in order to make provision for debt service.

He said many contractors have had to suspend work on construction sites largely because funds have not been released to offset the works which they’ve done, while those who had committed borrowed funds to the projects in the hope that government would honour its obligations are now regretting.

The minister said technically, no contract had been awarded for the second Niger Bridge as financial valuation is still ongoing though amid some preparatory activities nonetheless.
According to him, variables including exchange rates, inflation, among others have continued to necessitate renegotiation of financial bids, and resulted in further delays.

He also said political consideration often override expert advice on some of the PPPs as politicians ignore counsel from public agencies on taking the right steps in the right direction.

Fashola said the present setbacks in the commencement of work on the bridge had nothing to do with “witchcraft,” advising rather, that government needed to prioritise its projects going forward in order to fund them meaningfully.

He said contrary to speculation, nothing was wrong with existing PPPs, stressing that “people who claim to do it just can’t do it.”

Notably, Fashola further cautioned politicians against making disturbing pronouncements regarding the Niger Bridge and Lagos-Ibadan expressway during their political campaign.

Specifically, he advised them not to campaign for the cancelling of concession agreements as this will be in the interest of the country in terms of retaining investor’s confidence in the economy.

He said the political class could agree to oppose cancellation of contracts to send a strong message to international contractors that their investments would not be jeopardised.

Nevertheless, the minister said the way forward required that government must assure contractors that matured certificates will be honoured, adding that contractors are currently working according to payment approved.

Also, yesterday, the minister, at a separate public hearing, called for amendment to the Federal Roads Maintenance Agency ( FERMA) Act, 2004 to accommodate the re-introduction of toll gates in the country.

The FERMA amendment bill was passed into second reading by the House and referred to the Committee on FERMA to among other thing restructure the agency and increase its funding by the government.

Stakeholders also supported the minister in calling for reintroduction of toll-gates in the country’s highways as a measure to accelerate increased funding by government on road rehabilitation in Nigeria.

Fashola, however, opposed a proposal to contribute one per cent from the Consolidated Revenue Fund to fund road maintenance and rehabilitation by government, arguing that this could starve other critical sectors of needed funds for growth and development.

Earlier, House Speaker, Hon. Yakubu Dogara, while declaring the hearing open, said:”This exercise is critical given that these projects have become a constant and ugly feature in our national discourse whereas they constitute vital arterial network for our road transport system. They have become media sensations and highly politicized to the extent that it now seems that we are playing games with the lives of our people. Past administrations have celebrated progress ostensibly made on them while achieving little or nothing in reality.

“The Lagos/Ibadan Expressway, for instance, has become a subject of litigations as the government vacillates between executing it through a Public-Private Partnership arrangement and direct funding through appropriations. Unfortunately, the same affliction is seeping into the execution of the Second Nigeria Bridge. I make bold to say today that if the House of Representatives, in its Oversight responsibility, does not step in at this time, we run the high risk of continuing this path and the rehabilitation of the Lagos/Ibadan Expressway will remain a mirage and the Second Niger Bridge will never get constructed.

“I also hope that through this Investigative Hearing we can generate a national consensus on Public-Private Partnerships for our infrastructure development. We know that the costs of developing physical infrastructure are enormous yet the consequences of failing to deploy these resources are immeasurable. Excellent infrastructure provides abundant benefits for the economy.

Nigeria’s infrastructure gap has been widening in recent years owing to lack of capital expenditure in the national budget, a growing population, rapid urbanization, aging assets and weak governance frameworks that have prevented private capital from contributing to physical infrastructure development. Even as we make appropriations to improve our failing infrastructure, the government is often hardly able to source the funds to execute them in a way that will deliver an immediate direct impact on the economy.”