From Adetutu Folasade-Koyi and Isaac Anumihe, Abuja
Minister of Works and Housing and former Lagos State Governor, Babatunde Raji Fashola, recently captured media headlines when he hinted of the Federal Government’s plan to concession 12 major federal highways as part of strategies to improve thefunctionality of the nation’s road network. Last weekend, Fashola spoke to Daily Sun on government’s expectations of the concessionaires and how their involvement would strengthen the nation’s road and transportation infrastructure.
He also threw more light on the controversial housing deficit, government’s housing policy and other burning national issues.
Excerpts.
Criticisms over concession of 12 highways
We welcome criticisms. That is why it is a democratic environment. Criticisms enrich our discourse. If they are from well-meaning and right thinking people, we can have a debate. But, the criticisms have not been shared with me, but, we welcome them. We are ready to look at them. But, what we have heard repeatedly is Public Private Partnership (PPP). There seems to be some people who think that once government gives it to the private sector, it is like a magic wand and the place will be an Eldorado. But the truth is that they are always the last spender on social assets.
There are commercial assets and social assets. So, roads fall into the class of social assets. But, because the country has committed to renewal upgrade at the same time; ports, rail, airports, roads, bridges, power, all at the same time, to make life better, the resources are not coming in the same speed of commitment. So, we said, ‘okay, let’s look at what people are saying. Let’s try the private sector and see what is possible.’ So, the road you are talking about represents barely five per cent of the federal highways. But people just see a highway but there is an economy on the entire highway. There is opportunity for regular maintenance which could employ people. There is an opportunity for towing vehicle service, breakdown of vehicles. There is opportunity for ambulance services. There is opportunity for waybridge services so that people don’t overuse the bridge and damage our roads. There is opportunity for toll gates services to ensure that we get something back to keep the roads in good condition. There is opportunity for advertising. There’s opportunity for rest houses. When you have driven for two three hours, you would want to rest and refresh yourself instead of standing by the bushes do that. You can refill your vehicle; refuel. You can travel with your family. If it is late, you can sleep over in the same place. These are all the things we want to see is possible on those five per cent of the total network of those highways owned by the Federal Government. And, if that is the successful first start, we will see then how people behave. If you want us to do more, we can do another 12. What we are looking at is N1 trillion investment. If this succeeds, we are looking at something in the region of hundreds of thousands of jobs from the data that is available. These are some of the main reasons we are doing this. It is not finished. We have interest from within Nigeria from outside Nigeria. Our corporate development team is meeting and hopefully, I will get the report and then we go to the next stage. But, mind you, this is the largest road concession project ever undertaken in Africa; in terms of scope and size. But, it is still a very small part of our road network.
Chances of 75 firms that indicated interest in project being approved
Well, as I said, a project development team is working on the list. When we do this kind of thing, my side will want everybody to participate. We set up that team and leave them to do their work. When they finish they will escalate the report to myself and to the Honourable Minister of State, through the permanent secretary. We will see what have been done. So, we are not going to start peeping at what they are doing. And, don’t forget, I think I should say this in detail; what we have just done is a request for qualification. Who are the qualified people? We have seen previous attempts at privatisation or concessioning in other sectors that have not yielded the results Nigerians expected. And you can see that some of the problems have to do in some cases with the qualification of the people. So, first of all, are you qualified? That is just what we just did. We will do the next phase for request for proposals where we will now be evaluating financial and more detailed rigorous technical qualification. It is from there the very best of the best will emerge. It is after that we will go into concessioning agreement. It is with those agreements that we will be in a position to go and raise money because the monies with which PPP do these things are not the monies kept inside under your pillow case in your house or in your cupboard. It is the money in the banks.
This is what banking or the finance sector does. You now raise capital locally or internationally and mobilise to say, ‘let me go and finish that road. Let me go and install this equipment, let buy this’ because we need to get more towing vehicles, more ambulances more maintenance vehicles. And, as you are making these commitments, you are immediately deploying manpower and you are creating jobs.
Doubt over completion of Abuja-Keffi Road in 2022 with government’s inability to meet 15 percent counterpart funding
Where did you get that from? Okay, the Federal Government has made appropriate budgetary provision, not only for its counterpart funds but also, for the Phase 2 of the road. Phase 1 is from Abuja to Makurdi which I think is about 300 and something kilometres. Phase 2 is from Makurdi to Ninth Mile, another 280 something kilometres which will link the North Central to the East. So, we awarded the contract to Phase 2. We are working with Chinese to close and conclude the financing aspect because there is a construction contract and there is a financing contract. That is one of the things you must always be mindful of when you are dealing with these international contracts. There is a loan agreement with Nigeria-China Exim Bank. Then, there is a construction agreement which is Nigeria construction contract.
It is important to understand those two things because they have consequences on some of the things I have been reading in the papers that Nigeria has signed away its sovereignty. Nothing like that is true! Phase 1, which is Abuja to Makurdi, is already being constructed. We have budgeted for that for our counterpart funding. We did that last year, we did this year. But, if you go into the budget, you will see about fifty something billion. It is to pay our counterpart funding of Phase 1 and to provide for Phase 2. If the road is approved today, we will start work and our obligation to pay our 58 per cent tax today. So, we have not only provided for Phase 1, we have provided in anticipation for Phase 2. We have also provided for so many other things. Nigerians will say that we have signed away our sovereignty and all of that; it is not true but that is a matter for another discussion.
The other point you made is that, to the best of my knowledge, these two projects are the only projects being funded by this ministry. So, contrary to the impression being created out there that we have taken so much loan, it is not true! The other project being funded by multilateral loan is funded by the African Development Bank. That is Enugu to Bermenga Road and Bridge project that links Nigeria to Cameroon. It was a joint venture between Nigeria and Cameroon; to create a faster border crossing between Nigeria and Cameroon, after the Bakassi section. In fact, that bridge is essentially finished. We will hand it over later this year.
So, Cameroon took a loan, we also took a loan. But, beyond that, except for the project like SUKUK and all of that. Just to be specific that those are the two projects being funded by China funding; contrary to what is being pushed out there.
Financial implication of the road projects
It is a good opportunity to say that except for policy and administration, no minister is authorised to see cheques. What we see are certificates by the engineers that work has been done. The minister’s approval to pay the amount valued and that is just that. I don’t see vouchers, I don’t deal with vouchers. I don’t see vouchers. It is not my business. It is not my job. It is important for you to know that the staff of the Director Administration and Accounts are not staff of the Ministry of Works. They are the staff of the Accountant General of the Federation. They report to him. That is the way government is set up. It is a system of check and balances. So, if you go to other ministries, you will also see their Works and Maintenance departments. They are from here; they are staff of the Ministry of Works.We have a Legal department. They are from the Ministry of Justice.
That is how the government is set up. So, there is no whole system. The only people who are the staff of this ministry are the engineers. So, all the others are resourced. Those in administration are mainly civil servants; under the Head of Service.
That’s how government is set up. It is the same at the state level too. I think we should all have an understanding for this. It is part of the system of check and balances. You do your part, I do my part so that the room for commission is reduced.
Progress of work at 40-year-old Mambilla power project
All I can tell you is that the drive to implement the Mambilla project was at instance of President Muhammadu Buhari, because it was supposed to be a very big source of energy and also renewable energy. I left the Ministry of Power since 2019. This is 2021. So, I have no information to share with you about what is going on there.
Nigeria’s actual housing deficit
We seem to have craving for negative extremism; some of us! I hear us say we are the poverty capital of the world. Some of us seem to have craving for negative extremism. And, I hope that some of us will quickly turn around and tend towards positive enthusiasm. You see, I don’t know anywhere, and I have travelled a bit, where there is no housing problem. So, for somebody to just suddenly wake up to say that we have the worst housing problem or deficit…I say, where is it coming from? What is the data? They first told me it was the World Bank that said that we have 17 million and we started probing. The World Bank here denied the claim and said that they did not say so. I saw a policy document from this ministry and they put 17 million there. But, I am going to address the country when I finish my investigation. And from then on they have been voting that we have 17 million housing deficit. So, I have found where it came from. I am doing some internal checks. I have the document with me now so that I will address the public on that. But, that said, because I was so worried I called the Statistician General when I took over and asked; ‘do you have data on housing deficit?’ He said that he does not know where it is coming from.
Now, let us understand the history of housing problems. It has escalated in the last 15 years worldwide. And, why is it escalating? There have been a most rapid urbanisation in the last century; that is when people have moved fastest to cities. So, understand that it as an urban problem. Many of you have houses in your villages. They are empty. But, even in the city, there is a problem. So, we need to get the scientific way in approaching the problem. Why are there empty houses when people can’t find houses? So, one of the things we proposed at the National Council of Lands and Housing was first, understand that housing is ownership and rental. So, through the Federal Mortgage Bank we can give people loans——mortgage loans—– through the Institute of Estate Surveyors.
If you are asking people to bring two years rent in advance and he collects one month salary in arrears, are you making houses less affordable or more affordable? These are the things we should begin to talk about. How to unlock existing unused houses.
Government policy to make housing affordable for workers at state or federal level
The National Housing Policy itself is on affordable housing.
An affordable housing encompasses rent and ownership. So, as I said to you, the Federal Mortgage Bank gives mortgage loans to contributors to the National Housing Fund.
That is one step. The other step is that the Federal Mortgage Bank has been mandated to go and finance the Cooperative Housing Development Initiative. What is this all about? We decided that not all people want federal government house or land. Some want to build their own.
So, we said, let them form cooperatives. If you have, for instance, Cooperative Association of Journalists, get your own land. We don’t want to be involved. Get your own design.
Design according to what you think you can pay for, get your approval from your state government that you can build that, open your own account with the Federal Mortgage Bank and they will finance 80 per cent of the cost of that house for you.
We have over 50 cooperatives that have applied and benefited and we are processing about 67 cooperative associations that their first quarter report got to me this year. Then, the Federal Housing Authority is also building. The ministry is also piloting the National Housing Programme in 34 states. We are also executing site and service schemes where we are just constructing road, providing infrastructure, power supply, allocating the plots; go and build by yourself, in a couple of states.
We also expediting the process of issuing certificates of occupancy as some people don’t want to build. They want to buy. There are people whose applications to buy a house have been here for so many years; unsigned. All those people who bought Federal government property since 2000 and something are just getting their C of O; with the mandate of the president for me to go ahead and do it.
Projects the Buhari administration has excuted through your ministry
It is going to be hard to list all the projects. Let me tell you what it is. Right now, we have work that covers 13,000 plus kilometres of roads and bridges; out of the Federal Government’s 35,000 plus kilometres.
We are working on areas that covers 13,000 plus kilometres of roads and bridges. That involves 850 something different contracts. Let me emphasise the word contracts.
Within each project, there would be more than one contract and the reason is that our roads are long.
So, often times, you can’t give it to one contractor except in some rare cases. An example is the Kano-Maiduguri Road which is 560 something kilometres and has a dual carriageway for two lanes.
They are constructing over 2,000 kilometres. So, we broke it into five contracts. So, in one project, five contracts. Lagos-Ibadan, 127 kilometres, two contractors. Benin – Lokoja is another 200 kilometres, five contractors and so on and so forth. So, what you will see is that while some contractors have finished, some have not finished. When you are talking of completion, we are not dealing with urban municipal work of few kilometres where you close, remove and cut the tape.
As soon as we finish, we have to open the road for the users. There is no room for ceremonies here because the way it is constructed is that we do 10 kilometres or five kilometres, divert traffic to the other side, finish it and we reopen it. So, if you look at the Enugu-Port Harcourt Road, for example, it is 226 kilometres and, from every report we have completed 124 kilometres out of 226 kilometres. Kano-Maiduguri, we have completed 398 kilometres out of 560 kilometres and Lagos-Ibadan as at April out of 137 kilometres we have done 79 kilometres.
Sokoto-Kangiwa-Jega-Kontagora is 489 kilometres, we have done 424 kilometres, Gombe-Yola to Taraba, 217 kilometres we have done about 78 kilometres, Dodogoyi Bridge that encompasses 37.9 kilometres and about 3 kilometres of bridges we just started there. We have done about 4 kilometres.
We have finished one or two bridges there nearing completion. The Second Niger Bridge, as you know, we are heading for completion next year. As we complete, we open.
So, you will find that you are driving now longer kilometres of motorable roads. With regard to the SUKUK, we have, in the last one year alone done 422 kilometres of roads nationwide.