Monday, March 09, 2015

Unreleased funds stall federal road projects – Minister



The Minister of Works, Mr. Mike Onolememen, told the House of Representatives on Monday that over N230bbillion was outstanding as unreleased funds budgeted for road projects since 2012.
He said the development had impacted negatively on the pace of work on many road projects as the ministry had to struggle to execute projects with the inadequate releases made by the Ministry of Finance.
For example, Onolememen informed lawmakers that out of the N100bn budgeted for‎ capital projects in 2014, around N45bn was eventually released.
He added that the poor releases left the capital implementation at about 46.2 per cent.
“We recorded appreciable progress on many projects across the country, but the non-releases affected us.
“It means that if the ‎money was coming as we had expected, we would have progressed faster that where we are now,” he stated.
The minister had led ministry officials and heads of parastatals to the House to defend their 2015 budget proposals.
They appeared before the House Committee on Works, which is chaired by Mr. Ogbuefi Ozomgbachi.
Besides the ‎non-releases, Onolememen complained of the N17bn allocated to the works sector in the 2015 budget for capital projects.
He blamed the low allocation on the crash in the prices of crude oil, the country’s main source of funding its expenditure.
“Mr. Chairman, it is difficult to operate with N17bn for capital projects, considering the plethora of ongoing projects,” the minister said.
After going through the budget documents, lawmakers agreed with Onolememen that ‎2015 would be a “particularly difficult year for road projects.”
Ozomgbachi observed, “There has been a progressive decline of allocation to works.
“From about N159bn in 2012, the provision for capital projects has dropped to N17bn this year.
“In 2014, it was N100bn; the concern is that‎ the ministry may not be able to do much. We don’t even know what to say.
“The total budget for the main ministry and the parastatals ‎put together is about N30bn. It calls for concern.”
On funding for ongoing projects, the minister told the committee that only 33 out of about 210 projects had provisions in the 2015 budget.
For instance, he said an agency like the Federal Road Maintenance Agency‎ had zero allocation for capital projects.
The same zero allocation affected the Office of the Surveyor-General of the Federation, among others.
“We initially put many projects in the budget, but when the envelope was reduced due to the fall in oil prices, we just had to drop many projects,” Onolememen added.
To address the problem of poor funding, the minister said the ministry was already experimenting with the option of Public Private Partnership.
He cited the 2nd Niger Bridge and the Lagos-Ibadan Expressway as the “flagship PPP projects” of the Federal Government to address the problem of dwindling allocations to projects.
For the 2nd Niger Bridge, he said government committed N30bn in 2014 and another N15bn this year, while a total of N50bn was committed to the Lagos-Ibadan Expressway project by both the government and private partners since 2014.

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