Minister of Works and Housing, Babatunde Fashola, has called for improved funding and releases for highway projects across the country.
Fashola made the call in Abuja on Wednesday when he appeared before the Senate Committee on Works to defend the Ministry’s 2021 budget proposal.
Fashola said the call for improved funding was to enable the ministry to make significant impact on improvement of Federal road networks, boost economic activities and create jobs.
According to him, the major challenge to the ministry’s efforts toward the timely completion of projects is inadequate budgetary provisions and releases for projects to sustain annual cash-flow requirement levels.
He, however, noted that the additional funding from the Presidential Infrastructure Development Fund and Sukuk Bond had helped to bring some funding to road projects.
“The total sum of N276 billion provided for highway projects in 2021 budget proposal is an improvement over the 2020 amended provision of about N154.2 billion.
“But it is still inadequate to address the funding challenges of highway projects where the year 2021 project cash flow requirement is estimated at about N1.2 trillion.”
Fashola said the ministry was currently undertaking a total of 711 highway projects at a total contract sum of N6.26 trillion, noting that the projects were spread across the six geo-political zones of the country.
He said the ongoing projects were categorised under the highway projects financed with Presidential Infrastructure Development Fund (PIDF) and highway projects financed with the Sovereign Sukuk Fund.
Under the Sukuk fund, Fashola said the ministry was currently financing 44 roads and bridge projects using the 2020 Sovereign Sukuk issuance of N162.56 billion.
Fashola said the roads were mainly dual carriageways on the major arterial routes A1 to A9 on the federal road network.
According to him, other categories of the ongoing projects also include the highway projects financed under tax credit and highway projects funded from multilateral loans.
For roads financed via multilateral projects, Fashola said Federal Government contributes counterpart funding to the projects.
He, however, said that the focus of the 2021 budget proposal of the ministry remained the completion of some priority road projects especially those on route A1 to A9.
“These are roads and bridges that lead to ports and major agricultural hubs across the six geo-political zones.”
He said the reason to prioritise construction of some roads in 2021 budget was hinged on the wide disparity between the liabilities in unpaid certification of N392.02 billion and budgetary provisions over the years.
According to him, N435 billion was proposed for the Federal Ministry of Works and Housing and its parastatals for capital, personnel and overhead estimates in 2021 Appropriation Bill.
Earlier, Chairman , Senate Committee on Works, Sen. Adamu Alerio, (APC Kebbi), in his remarks said the budget proposal for capital projects of the ministry was almost the highest among other ministries.
He, however, said it was a drop in the ocean given the high volume of projects that required funding.
Aliero said there was the need to source for more funds from other sources such as sovereign wealth fund, pensions fund among other to finance infrastructure in the country.
He said that the committee had on its oversight inspected some road projects across the country, noting that some contractors had stopped work because of paucity of funds.
He said there was also the need to give priority to construction of some roads given their economic impact to the nation.