The Federal Government has not been adequately funding execution of capital projects initiated, approved and awarded by it and its ministries, departments and agencies (MDAs) across the country, the Sunday Trust can authoritatively reveal.
The neglect has led to many of the projects being abandoned by contractors handling them, while the scheduled completion dates of most others still being executed elapsed many months ago.
The South enjoys the lion’s share of the awards with N131 billion total sum. The North trails behind with as low as N29.1 billion capital project awards.
The House of Representatives had this year engaged the co-ordinating minister for the economy and Minister of Finance, Dr Ngozi Okonjo-Iweala in a face-off over an amendment to the 2013 Appropriation Act, with the House accusing the Executive of not appropriately utilising funds for projects they were meant for and the Minister not releasing funds as due for vital projects. Honourable Samson Osagie, representing the Orhiomwon/Uhunmwode Federal Constituency, Edo State, in an interview in July, accused the federal government of stultifying development by not releasing enough funds for projects.
A September 2013 report by the Fiscal Responsibility Commission (FRC) exclusively in possession of Sunday Trust detailed how execution of federal government’s projects have been dragging due to non-release of funds. The Fiscal Responsibility Act mandates the Finance Ministry to produce quarterly and consolidated annual budget implementation reports to the FRC for examination and physical verification of the projects. Acting on the reports submitted by the Finance Ministry from 2009 to 2011, six inspection teams of the FRC, between March and May this year, visited federal government’s projects being executed across the country. The Commission submitted its findings to President Goodluck Jonathan via a memo dated September 10, 2013.
The findings are not flattering to the federal government. Of the 24 projects the teams inspected across all the six geo-political zones, execution of only two projects was found to be either progressing smoothly or completed on time. One is the construction of the N17.17 billion Otukpo Multi-purpose dam, and the other, reactivation of the water basin and reticulation of Rafin Pantsaka-Bakachi in Plateau State. Another project, the N66.45 billion East-West road contract in the South-South had attained 80 per cent completion status, but the completion date, scheduled for February 2009, had since been overrun by four years.
The FRC team expressed satisfaction with the extent and quality of work it observed at the Otukpo Dam site, Senate President David Marck’s constituency. The water basin and reticulation project at Rafin Pantsaka was discovered to have been relocated to the two communities of Lariski and Girya, contrary to what was stated in the contract document. And also, contrary to reactivation as spelt out in the contract document, the team discovered the project was entirely a new one. The project in the two communities had been completed, though.
The remaining projects have suffered from acute under-funding; some have even been abandoned after the federal government had committed some funds to them and work had begun. FRC’s checks revealed that government didn’t provide any appropriation for some of them in the last two years.
The federal government has been according a particular project, for example, epileptic attention since 1999. The Ministry of Water Resources, 14 years ago, took over the Zungeru/Wushishi water supply project from the Niger State government, which had been initially awarded the contract a year earlier. The initial cost of the project, as awarded by the state government, was N889.11 million. But when the federal government took over the execution, the cost was reviewed upward to N1.93 billion.
But up till when the FRC inspection team visited the communities in April this year, it has been “ba (no) water” from the proposed public water supply system. In 2011, government released the sum of N373.12 million to Messrs Arms Services, the contractor handling the project. In the 2013 budget, the sum of N200 million was appropriated for it, although it couldn’t be confirmed whether the money was paid to the contractor. The FRC report declared the project as abandoned since 2004, with only 30% completion level attained.
On the rehabilitation and asphalt overlay of the Bauchi-Dass-Tafawa Balewa road project in Bauchi State, the inspection team reported the contractor had fled, citing non-payment, security and poor weather. The contractor, Triacta Nigeria Limited, was expected to have delivered the job a year ago. But the work was only 55.7% done, after he had collected N2.725 billion of the N4.584 billion total project cost. The FRC report was not sure money was appropriated at all for the project in the 2013 budget.
The Sokoto-Kebbi States border road by the Federal Ministry of Works awarded to Messrs P.A. Etos Nigeria Ltd. in February 2011 was initially scheduled for completion within nine months. But the date was later rescheduled to January 2013. The two dates have remained merely ceremonial.
Actually, the contractor abandoned the N996.82 million job after collecting N295 million and doing it up to 36%. It cited non-payment for walking out on it. The FRC stated that government appropriated only N350 million for the project in the 2012 project, an amount the Commission considered “grossly inadequate”, and which was obviously not completely honoured. In the 2013 appropriation document, government didn’t deem it fit to vote any amount for it.
The reconstruction contract of the Gbongan-Iwo road, which was awarded to Messrs Kopek Construction Limited had a commencement date of September 2011 and was expected to have been completed in April this year. But by March 2013 when the FRC team inspected the project, it had been done only 36.6%. Of the N6.91 billion voted for the project, government had released only N2.10 billion.
In one instance, the Federal Ministry of Works approved a road contract without the contractor, Messrs. A. C. Egbe Nig Ltd attaching any engineering design to its documents. The project – construction of the Ohordua-Ugbodo-Onicha Uku-Isele Uku road in Edo/Delta states – was awarded on 21 December 2010 for N955.50 million and was expected to have been completed by January 2013. By April, three months after the scheduled expiry date, the FRC team that inspected extent of work discovered government had released only N272.59 million to the contractor and the job was only 42.38% done. Government itself directed the contractor to suspend work pending approval of engineering design. The team observed poor quality of work, a situation it said arose possibly because of lack of the vital engineering design.
Non-provision of funds also led to waste of resources in the rehabilitation job being done on the Nigerian Institute of Oceanography and Marine Research jetty at Victoria Island, Lagos. The Ministry of Water Resources awarded the N475.32 million contract to Abys Dynamics in December 2011, to be completed within eight months. The contractor was mobilised with N71.29 million (15% of the contract sum).
Since then, the federal government and the ministry have gone to sleep on the project. Although government appropriated only N10 million for it in the 2012 budget, the money, according to the FRC, was never released. The contractor claimed it had done up to 45% on the job. But the FRC said the work done was “little”, and even that was being washed away and the structures erected being corroded by ocean current. The Commission wondered why government didn’t deem it reasonable to provide enough appropriation in the 2012 budget for a project whose completion period was within that year, after the contractor had been mobilised.
Another water supply project allegedly neglected by the federal government is at Takum in Taraba State. Messrs CGC Nig Ltd bagged the N263.38 million contract on May 25, 2011. It was scheduled to be completed in September the same year. Two years after, the job has only been 27% executed; of the boreholes installed, “none was functional”. Government has paid the contractor a total sum of only N72.67 million so far and hasn’t thought it necessary to appropriate the required completion funding in the last two fiscal years.
There was even an instance of a project with completion status of only 5%. The N1.94 billion land reclamation/erosion control contract awarded to Messrs A.G. Vision Construction Nigeria Ltd. was scheduled for completion by March 2012. But a year after that date and N808.95 million down the hole, all the FRC team saw at the site was an “abandoned” project and a “shoddy job.” The contractor, the Commission’s report disclosed, “has even been overpaid”, that is, for the unimpressive extent and quality of job he had done there.
House of Representatives members are angry that the Ministry of Finance has not displayed any commendable commitment to project execution. The various committees of the House, after visits to many projects across the country in exercise of their oversight functions before they embarked on sallah break two weeks ago, had bones to pick with the Ministry over long delays in project completion.
In fact, the House committee on Information and Communications Technology declared it would investigate Dr. Okonjo-Iweala and the Budget Office over poor release of funds to some MDAs for the implementation of the 2013 budget. Chairman of the committee, Rep Ibrahim Shehu Gusau (APC, Zamfara) condemned the Finance Ministry’s release of a paltry N727 million for capital projects to the Federal Ministry of Communications Technology, out of the sum of N2 billion approved for the purpose in the budget for the 2013 fiscal year, with less than three months for the year to run out.
“We’re not impressed at all. This is October, but only 28.05% of your approved budget has been released. What happens to the 72% now that it is less than three months to December?” Gusau told the ministry’s officials when the committee members visited the ministry early this month. “We will invite those responsible for this and ask them relevant questions before getting back to the House. We can’t afford to fold our hands and see things happen this way,” he fumed. The legislator vowed to ensure that the ministry’s officials return unspent funds to government’s treasury by December 31.
The report raised several issues with the execution of the projects. As part of its recommendations, the FRC said there was “outright failure to provide funding in subsequent funding of projects for capital projects whose duration exceeded one fiscal year. Cases in point include: the construction of Panyam-Bokkos-Wamba Road (North Central), the rehabilitation of Jega-Koko-Yauri-Niger State border road (North-West),, etc.”
The agency complained also of “inability of ministries to enforce the relevant penalty clauses on defaulting contractors as the cases of the Land Reclamation/Erosion Control Project at Essien Town (South-South), construction of Panyam Bokkos-Wamba road in Plateau and Nasarawa States (North-Central).”
The report said that “the Federal Ministry of Finance and the Budget Office of the Federation (BOF) was not working on the same page as far as the planning and funding of capital projects are concerned.”
Source: Daily Trust
