The Federal Minister of Works, Dave Umahi, has disclosed that the funding gap of road projects being financed by the Nigerian National Petroleum Company Limited stands at N3.56 trillion.
The minister disclosed this during the presentation and defense of the Ministry of Work’s 2024 budget to the Joint Committee on Works of the National Assembly in Abuja on Monday.
Umahi informed the lawmakers that there are 2,097 road projects are currently being handled by the Ministry of Works under several special funding mechanisms, including those being financed by the Nigerian National Petroleum Company Limited (NNPC).
The minister explained that the NNPC had undertaken to finance several roads across the country identified as being crucial for the efficient distribution of petroleum products across the nation.
These NNPC-financed road projects are further categorized into NNPC Funded Projects Phase I and NNPC Funded Projects Phase 2.
Breakdown of NNPC-financed road projects and existing funding gaps
Phase I of the NNPC-financed road projects comprises 21 roads with a total length of about 1,804.6km, with an estimated construction cost of N621 billion.
Umahi, however, stated that only N247,729,252,899.54 had been committed to the Phase 1 road projects by the NNPC.
- “As of date, the total drawdown forwarded to the NNPC Limited is in the sum of N247,729,252,899.54 out of the Federal Executive Council (FEC) approved sum of N621,237,164,794.59 representing 39.88% performance. The funding gap here due to inflation is estimated at over N250 billion,” the minister explained.
For the Phase II road projects being funded by the Nigerian National Petroleum Company Limited (NNPC), the Works Minister stated that the Federal Executive Council approved N1,969,700,168,910.78 for the execution of 44 road projects with a total length of 4,554.19km.
Umahi, however, noted that the initial contract sum for these 44 road projects under the NNPC Phase II Funded Projects was about N3.69 trillion. This implies that at the start of the Phase II road projects, a funding gap of N2 trillion already existed.
For the funding gap of both the Phase I and Phase II NNPC-financed road projects, Umahi said that it presently stood at N3.56 trillion.
- “Presently, with inflation, the funding gap to have the NNPC Phases I & II completed shall stand at about N3.56trillion (Inflation about N1.5trillion) for two years from now,” the minister said.
Umahi informed the lawmakers that the funding gap of the NNPC-financed road projects is neither appropriated for nor has any source of funding.
- “This means that without the kind intervention of this Distinguished and Honourable Joint Committees of Works, these projects will not go on mostly from March 2024 when the NNPC funding would have been exhausted. Your kind intervention and advice are highly, highly, and urgently solicited.
- “As of date, the total drawdown forwarded to the NNPC Limited is in the sum of N752,093,618,603.51 representing 38.18% performance.
- “The level of drawdown seems low because most of the projects needed to be reviewed due to the inflation,” Umahi added.
This is one of the reasons Nigeria has consistently failed to move forward. Tell me what NNPC is doing in rehabilitating/ constructing roads when they (NNPC) has failed woefully to carry out their primary mandate of exploration and refining of crude oil. This will be another conduit pipe to embezzle Nigeria money, All these listed roads may end up not being done and the money will vanished. Federal Government need to totally change directions if things must work, sentiment apart.