OpeOluwani Akintayo
24 January 2018, Sweetcrude, Lagos — The Minister of Power, Works and Housing, Mr. Babatunde Fashola SAN, has reported that the 2017 budget for his Ministry has achieved 71.58 percent implementation as at December 2017.
Fashola who made the disclosure before a House of Representatives Committee during the defence of the 2018 Budget proposal for his Ministry, explained that based on all the payments made to contractors for all the works done since the commencement of the projects to date, the current budget performance for the second release for the period under review now stood at 71.58 percent.
Recalling that he first reported a performance of 15.3 percent based on payments of N57 billion made after the first release of money, the Minister, who explained that he could not quote the full performance then, because, although the works had been completed, they were yet to be paid for, pointed out that based on some payments that were made between December 2017 and January 2018, the performance had now gone up to 71.58 percent.
He told the Committee, “as at December 2017, we could only report what we had paid for, which was a lot less than the work that had actually been done; because the releases that we had for the first release in 2017, was made in August 2017 and it was for N57 billion as you could see. So it was not until December 2017 that we got the second allocation of N120 billion and we also got some disbursements from the SUKUK in the sum of N57 billion’’.
“Based on some payments that have been made between December 2017 and now (January 17th, 2018), after the second release, we have paid out N57 billion as I said in the first release, N57.4 billion also released under the SUKUK and N120 billion. So this takes the budget performance up from 15.3 percent in Q1 to 71.58 percent as at today,” he said eliciting applause from the committee members. He noted that this is the first time the Federal Government has recorded such impressive performance.
The Minister, who noted that the budget has run just a little above two Quarters (June 2017 – January 2018), declared, “Our new performance now is 71.58 percent. The details of those payments are what is broken down in Annex 1 covering, I believe, about 526 projects at various levels’’. He added that the Overhead Costs of the Ministry and its Parastatals currently stood at 62 percent while the Personnel Cost which, “was being implemented and would be reported through the Office of the Accountant General of the Federation”.
Referring the Members to Annexure 1 of the document, Fashola said it contains details of the 526 projects listed there and various roads across the six geopolitical zones including a breakdown of payments, the physical progress of work, the certificates and the amount that has been paid, the budget performance and the progress of work achieved.
The Minister reiterated that the 2017 Budget was in the sum of N586.535 billion for the Ministry of Power, Works and Housing and its parastatals.
Also contained in Annexure 1, he said, were Overhead Costs in the sum of N15.047 billion, broken down in Paragraph B for the main Ministry, Parastatals and Agencies like FERMA and others, the Personnel Costs amounting to N13,556,553,547 billion also itemized for the three sectors of the Ministry as well as the breakdown between the Main Ministry and the other sectors.
Responding to questions from members, especially on the status of roads in the 2017 budget which were not awarded in the budget year, Fashola reiterated his earlier call for a bulk amount to be provided in the annual budget to fund roads adding that it would make for the continued funding of the roads not awarded during the budget year.
According to the Minister, this would also solve the recurring problem of a project meant for one annual budget reappearing in the budget for the following year or being abandoned, adding that the present process whereby the Procurement Law stipulates a process that takes up to six months, as well as other processes involved before the award of a contract, was responsible for the aforementioned situation.
“The truth is that I don’t see any self-respecting public officer, not the least of the people who are with me here, that want to start a project and not complete it; that I can say on their behalf, they don’t want to abandon any project. But from their experience, which I have come to share, in some budget years, when the budget is passed they find zero allocation for some projects. So their enthusiasm is lost if their tool is taken away”, he said, adding, however, that things have changed in the last two years.
“The question we must ask ourselves is, can we finance new projects every year? We are constructing roads in a very limited weather window and a very long drawn procurement process of about six months every year and without completing one, we go to another because our constituents want them”.
Fashola, who also noted that some of the roads being constructed run from 50km to about 500 kilometres, added that if in a state where they have three to five-kilometre roads, it usually took 24 months to finish. Would it be physically possible to expect such lengthy roads to start and finish in one budget year? He advised that it was necessary to adopt a process that would work for the country. “Our resources are not increasing in the same exponential manner in which we are committing to new projects and we have projects that will have to be completed”.
Commenting on the budget performance, Chairman of the Committee Senator Kabir Gaya, commended the Minister for the performance saying in the history of budget performance in the country in the last ten years there has not been such achievement adding that the budget for Works in 2014, which, according to him was much smaller than the 2017 budget could not achieve up to half performance while the 2017 budget of over N500Billion had performed so much in just two quarters.
“I want to say that in the history of our budget performance for the last ten years we have not seen such but in just two years we are seeing systematic progress. There was a budget of N20 billion I think in 2015 and the budget in the last two years has tripled that. This shows that this Government is concerned about improving the state of infrastructure,” the Chairman said.
Noting that there have been some projects abandoned for 10 years before the coming of the present administration, the Chairman declared, “This administration has graciously put money into them. So I think Honourable Minister, I believe you are equal to the task you will continue to handle it and we know you are capable”.
Also commenting on the performance, another member of the Committee, Sen. Barnabas Gemade, from Benue State, described it as something that had never happened before in the country. His words, “In line with the Chairman’s comments, I will like to say here that I have not seen any budget of that magnitude funded up to 71 percent; never”.
Most of the Committee members, however, agreed that although the idea of creating a bulk budget to fund roads was good, it was necessary that the Government continued to function with the existing Procurement Law, Budget practice until such a time a new and acceptable Budget plan would be put in place.
With the Minister at the Budget Defense were the Permanent Secretary, Works and Housing, Mr. Muhammed Bukar, the Director, Finance and Accounts, Mr. Ibrahim Tumsah, the Director, Public Procurement, Mr. Ibrahim Badeiri, the Director Highways, Planning and Development, Engr. Chuks Uzo, and the Director Highways, Construction, and Rehabilitation, Engr. Yemi Oguntominiyi among other senior officials of the Ministry.
