FEC approves N6.17bn for dualisation of Ikot-Ekpene-Aba-Owerri Road

…N2,451bn for rebuilding North East

…Okays N690m for 6 transaction parties to raise N3.4trn debts settlement

Mathew Dadiya, Abuja

The Federal Government has approved N6.17 billion for augmentation of the contract for the construction of Ikot-Ekpene border-Aba-Owerri Road, Section 1, Phase 1.

Minister of State for Power, Works and Housing, Suleiman Zarma, disclosed this while briefing State House correspondents after the FEC meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.

Zarma said that the contract was awarded in 2012, but the augmentation had to come following some observations by the contractor.

“FEC has given approval for the augmentation of the contract for construction of Ikot-Ekpene border-Aba-Owerri Road, Section 1, Phase 1 and the length is 11.26km.

“The contract was awarded in 2012 to Arab Contractors at the cost of N3.78bn; it came up for augmentation because the contractor actually observed some failures in the contract around some sections of the road.

Actually, it is a one lane, but with the augmentation now, it will be dualised; the contract period is 12 months and the cost after augmentation is now N6.17 billion,’’ he said.

Also, the Minister of Finance, Mrs. Zainab Ahmed, disclosed that the Federal Executive Council (FEC) has approved the sum of N2,451,400,000 billion ($6.8 million) loan from AfDB to finance inclusive basic service delivery and livelihood empowerment integrated programme for the rebuilding of the North-east.

Mrs. Ahmed, who disclosed this on Wednesday while briefing State House correspondents after the FEC meeting presided over by President Muhammadu Buhari, said that there was a previous facility which included coverage of Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe States, and some specific institutions were beneficiaries.

She added that a federal science and technology college in Lassa, Borno State that was one of the beneficiaries but due to the activities of insurgents, it suffered severely and could not be carried out.

“Now, what we are trying to do is to go back to the projects, to this particular institution to make sure we are able to rehabilitate the institution and also undertake a complete skill, training and educational project that will mitigate against the challenges that the institution has had.

The facility is a concessionary loan. It has an interest rate of one per cent and it is payable over a 30-year period and it has five years moratorium,” the Minister said.

Speaking further, Mrs. Ahmed said that the Council also approved the sum of N689.9 million for the appointment of six parties for promissory note programme and a bond issuance to settle local debts and contractual obligations of the Federal Government.

The Daily Times recalls that FEC had at its meeting of July 12, 2017 approved the establishment of a Promissory Note Programme for the settlement of Inherited Local Debts and Contractual Obligations of the Federal Government estimated at N3.4trillion.

The total estimated cost for implementing the Programme -including the Fees and Expenses of the Transaction Parties is N689.955.

The Minister gave the breakdown of the creditors to include: Pension Liabilities N400billion; Unpaid Salaries and 3rd party deductions N24.95billion; Staff Claims N270billion; Part of Contractors Claims N45.36billion;

Fuel Supply Accrued interest and Foreign Exchange differentials N514.29billion; Part of State Governments Claims N487.85billion and Ministry of Health Outsourced Liabilities N9.04billion.

Others are: Major Contractors N596.51billion; Export Expansion Grant (EEG) Scheme N350.12billion; Judgement debt N112.96billion; DISCOS N26.71billion; and GENCOS N495.67billion.

According to the minister, some of the benefits of the programme is to provide stimulus to the economy and unlock investment across a number of sectors currently having liquidity issues.

It would also provide an immediate a positive impact on the non-performing loan ratios of banks which will in turn, increase the banks capacity to lend.

It would also enable the Federal Government to formally recognise and account for its true liabilities in line with the International Public Sector Accounting Standards (IPSAS).

The Finance Minister said that for compliance with the Fiscal Responsibility Act, the President, forwarded the Programme for the approval of the National Assembly (NASS), noting that as at December 2018, the NASS had approved the Issuance of Promissory Notes to two creditor categories from the Programme:

She said that N488,743,526,204 billion refund to 21 State Governments for projects executed on behalf of the Federal Government, regretting that refunds to 4 States – Bauchi, Delta, Kogi and Taraba, were not approved.

“Payment to Oil Marketing Companies (OMCs) for Fuel Supply Accrued Interest and Foreign Exchange Differentials amounting to N348,003,054,975 billion.

She listed the beneficiaries to include contractors; export claims amongst others.

Three categories of Transaction Parties are to be appointed for the implementation of the Programme. They are: An International Accounting Firm operating in Nigeria (for verification of the liabilities); Financial Advisers (for the structuring of the Promissory Note); and Legal Advisers (for legal advisory services and litigations that may arise).

She said that the Bureau of Public Procurement (BPP) has issued Due Process “No Objection” for the appointment of the successful bidders and their respective Fees and Expenses as detailed in Table 1 as follows: Joint Financial Advisers: Zenith Bank/Zenith Capital N14,294,331.50;

Coronation Merchant Bank/Access Bank N14,294,331.50; UBA/United Capital N14,294,331.50; Joint Legal Advisers are SimmonsCooper Partners-N53,703,771.80; D.D. Dodo & Co. N53,703,771.80; Perchstone & Graeys-N53,703,771.80 making a total of N368,651,505.57 million.

The council authorised the DMO to issue Appointment Letters to the Transaction parties and execute relevant Contracts with them on behalf of the Government; and the HMF to take all necessary actions required for the implementation of the programme as approved.

On her part, Hajia Aisha Abubakar, the Minister of Women Affairs and Social Development, said that FEC had also approved the revised estimated total cost for the completion of the Ministry of Women Affairs and Social Development Headquarters in Abuja.

Abubakar said that the building was initially conceived to be the National Children’s Library and Resource Centre which was approved in 2006.

The minister, however, said that the design was contrary to the guidelines of the Abuja Master Plan which stipulated that the development of the Central Business District should have a minimum of five suspended floors.

“Therefore, we had to make a request for the revised estimate to redesign to comply with the FCT Master Plan and got approval to convert it to the Ministry of Women Affairs and Social Development headquarters.

“So, today, we got approval in the total sum of N851.6m revising the project from the initial approval of N1.79m,’’ she said.