The minister of Works, Engr. David Umahi has revealed that the pressure on Naira in the foreign exchange market, coupled with the removal of the fuel subsidy, has significantly impacted the federal government’s earlier projections regarding the funding needed to complete inherited ongoing road projects across the nation.
These economic challenges have led to increased costs and budgetary constraints, making it more difficult for the government to allocate sufficient resources for these critical infrastructure developments.
According to Umahi, the government may need to reassess its financial strategies and seek alternative funding sources to ensure that these vital road projects are finished on time and to the expected standards.
Umahi on Monday disclosed that the President Bola Tinubu-led administration will now require over N19 trillion to get the job done.
He said this in a media briefing in Abuja, stating that the new cost represents an increase of N3trillion over the N16trillion projected for the projects as at August, 2024.
Umahi had at a press conference on August 23rd said, “The funding gap to complete all the inherited projects is about N13 trillion as of May 2023; that will be more than N16 trillion when all projects are reviewed in line with current market realities.
“This is due to the removal of fuel subsidies and the floating of the naira.”
However, while addressing the media on Monday, the Minister explained that these issues have continued to have an impact on the ministry’s activities with respect to project delivery.
Umahi said, “Mr. President inherited was a total of 2,604 projects as at May 29th, 2023 the total cost was N13trillion that was what the President inherited. Abd a debt to contractors of N1.6 trillion.
“When you look at the variations by reason of the floating of the Naira you will find out that, if you review all these projects you get over N19trillion , the total ongoing projects. “
The minister further explained that the President decided to keep all these projects alive with the hope to get funding from internal and external sources including loans because of his concern for the well being of Nigerians.
According to him, the president has given priority attention to the Ministry of Works knowing fully that roads and bridges have the potential of unleashing unprecedented economic benefits for citizens.
He also explained that the Ministry would not hesitate to revoke the Abuja-Kano road contract awarded to messers Julius Berger should it fail to mobilize to site at the expiration of the 7 days ultimatum given to it. The ultimatum expires on Wednesday.
According to him, negotiations between the Ministry and the contractor went on for the better part of 17 months and government decided they must be an end to negotiations.