The House Committee Chairman on Works Hon. Toby Okechukwu has identified paucity of fund as the major issue hindering works on Nigerian roads during a chat with news men in his office. He suggested ways of raising funds on Nigerian roads and other issues. Excerpts:
Introduce yourself sir.
I am Hon. Toby Okechukwu. I represent Aninri/Agwu/Oji River of Enugu State at the National assembly. I am the Chairman House Committee on Works.
What is the major challenge facing the road sector in Nigeria?
The challenge we have with Nigerian road is essentially that of fund. Apart from having stakeholders’ forum, like the one the ministry had with various stakeholders, It is very important that the very key issues affecting the sector are addressed and that is fund. Most of the time, funding the budget is observed in bridge; most of the time you fund 50%, or you fund 60% but in recent time that has improved. That is the sense in SUKUK. There has been significant improvement. So, based on that, there are some improvements from the sector, but with the commitment of over N3.6trn contractual commitment and outstanding liability of up to N300bn it may be difficult to bridge the funding gap. So essentially it is practically fund.
How do you intend to tackle the problem?
The house, the Eight Assembly in its own volition has made effort to ensure that some of these problems are mitigated.
And that has come by way of having requisite reform bills that have passed through the house. We have FR bill (Federal Road Bill) that is coming up. By next week it will pass through third reading. We have the road fund bill that has passed through the senate and house of representatives.
These are what will occasion additional funding for the sector by way of additional revenue other than annual appropriation. From my own perspective, annual appropriation should be an intervention fund that should add value to the seed capital that was raised by road fund. They are road user charges – if you use something to sustain you, you must pay for the things you used.
At the stakeholders meeting, they were talking of weighing bridges; they talked about a host of other things. Then there has to be issue of tolling which has to come in place for maintenance of the road, so that it can be sustained.
Most of the time the challenge we have is that it takes a long time for government to address particular prepared problems or rehabilitation problems. By the time you do so the road would have deteriorated. But with the road fund bill, there will be sustainable income in the sector – it will be helpful.
So the FR bill will actually create proper framework for operations in the sector.
By road development you have an entity that becomes a legal person that actually can borrow money to develop its roads. They can concession; they can take activities of government and run it in a private sector format. And that is what happens on other jurisdictions. So with particular regard to various zones construction is going on in various zones.
Can you be specific sir?
Well we have, let me start from the area I represent. We have the Enugu – Onitsha express. It is topical; it has been a major constraint to our people in the south-east. During the 2016 budget, there was no funding from the executive, but the House out of its own volition funded the road up to N5.5bn. and graciously the ministry was able to release fund for that project, which was how it took off. And that is why you have the level of improvement that you have now.
As at the last count it was funded with about N5bn, we improved on it to about N7.5bn because the contractor is a serious contractor; And because it is major artery for people from that area.
What are the expectations?
We continue to fund major arterial roads; Enugu – Port Harcourt, Lagos – Ibadan, Lagos – Abuja, Abuja – Kano. Actually, in 2017 budget the Abuja – Kaduna, Zaria – Kano; we actually made the money available but the ministry did not complete the procurement.
Lagos – Ibadan will receive major attention. Second Niger Bridge will receive major attention. We actually concluded Public Hearing on those two projects.
What is the actual state of the Second Niger Bridge?
The second Niger Bridge had early contract one, up to four. But there is no framework for its completion. People say it is concessioned, people say it is PPP. But there is nothing like that in place. And it was very clear from our public hearing and there is no contract in place for its completion. And that was why we had a public hearing. And now we are insisting that government has to award a contract on the road for its completion, because that is the only way to finish the work. Presently the work on that project (Second Niger Bridge) will expire by June, Julius Berger will finish their contract on that road and that is early works. And there is no way you can complete any road, any project through early works.
Early work is piecemeal award of contract. It never happens for a project of that magnitude. And that is under the pretense of or the impression that it is on concession, there is nothing like concession about it. Nobody is bringing any money. And that was very clear when we had public hearing. And that is what we are saying. We want to be certain that we put money in the bridge, use it. But first and foremost, you must put pen on paper with Julius Berger. We don’t want early works one, two, three – it doesn’t make any meaning to us unless you have contract on it. The same thing with Lagos-Ibadan, it was fairly controversial last time. Now we can see there is no concession on it, there is no funding on it. There is no PPP arrangement on it. There is no alternative funding to it. It has to come through government funding. If they want to raise bond, if they want to do alternative financing, we are all for it. But we have to be very clear that these roads need major intervention. The same is applicable to Enugu-Port-Harcourt; the same with Lagos-Abuja-Lokoja. Then we also have major arterial roads that run through 9th Mile to Makurdi and to the Northeast, if you see the level of trucking that goes on there, you now find that you don’t need to beg anybody for the road to be awarded.
And presently, I am happy that through our own initiative that the ministry has taken proper steps in ensuring that they award it. So they have gotten the due process certification. We are expecting that by next week it should go to FEC for final procurement, because that is a trap for major truckers from East to the North.
What are the setbacks so far?
Like I told you I started with challenges, the major problem is fund. If you bring in enough money Nigeria roads will be as good as any other road in the world. But government has always funded it through appropriation. The usual practice in other jurisdiction is that road user charges come as seed capital for road funding. Then government appropriation comes as intervention.
Do you have any solution for the problems?
The road sector should be able to make income either through fuel tax or through tollgate, through weighing bridges or through punishment that the Road Safely mete out to people. The last time they were raising up to N3bn – N4bn in road charges and all that. That should go to road fund for the development of the sector. So even if you are able to raise only N100bn or N50bn it is basic seed capital for you. You now begin to look for other ways for government to help you through appropriation. But when you come here you find out that most contractors even know the budget more that you. If the thing is not in the budget they run away. But if you generate your own money they will say after all the man has money. So the major problem we have is funding. If we have budget, for instance N300bn per annum; you have to budget for N300bn consecutively and stop awarding contracts for the next ten years for you to be able to complete what you have started.
That is when I say N300bn commitment. It means N300bn, it is only when you multiply N300bn by ten that it gives you N3trn. So which means that if you continue to budget N300bn every year it will take you ten years to get N3trn and N3trn is the amount of contract you have presently. So when we are talking about the problem of Nigeria road it should be in context. It is not due to human failings and all the rest of that. The failings there, is that we should think outside the box in order to provide options with regard to road funding, with regard to road improvement. And that is what the 8th Assembly and the committee on works have done during these periods through legislation and various reform bills.
Thanks you sir.
You are welcome.