Ensuring Value For Money In Nigerian Highways Development Being Remarks By Babatunde Raji Fashola, San At The National Council On Works, Held In Kebbi
On behalf of the State Commissioners and other Members of Council, I express the appreciation of the Federal Government of Nigeria to the Government and People of Kebbi State for hosting our Council Meeting and for doing so under very hospitable circumstances, in Birnin Kebbi.
Apart from being the home of famous Emirates like Gwandu, Yauri, Zuru, Argungu to mention a few, Kebbi State has come to the centre stage in Nigeria’s developmental history, especially at this time when Governor Atiku Bagudu is providing visionary, developmental and progressive leadership.
Statesmen, not big men, as former Governors, former Chief Judges have rallied around their Governor and Government to pursue a common goal of development.
From Agriculture, to Roads, Housing to Power, whenever it is partnership for Development, Atiku Bagudu will be found making the strongest case for why Kebbi must be involved. This remarkable and inspiring leadership must be acknowledged.
It is in this environment of developmental focus that we converge for the 24th National Council for Works to discuss development around getting “Value for Money in Nigerian Highways”.
Ladies and gentlemen, I found this topic appealing to this Council because of some of the assumptions that have been made about Cost of Roads in Nigeria, the questions I have had to answer, posed by people who ought to know, and because I hope to generate a more informed conversation about the matter.
It is my expectation that in each State, we will be sufficiently interested to interrogate issues like the source of value, where it lies and how to get the best out of it.
Therefore, I would like to start by asking the question why Nigeria has bad roads after almost a decade of prolific receipts from oil boom when oil prices were at $100 per barrel.
The answer is partly because we did not invest our money in Roads in the way that the United Arab Emirates, Qatar, Saudi Arabia and Brazil, to mention a few oil-exporting countries, have done.
To the extent that Roads are assets that live for longer periods of time and deliver collective National Benefit in terms of movement of goods and services and contribution to the GDP, clearly, it is doubtful that we got optimum value for those oil incomes between 2007 and 2015.
In other words, instead of investing our oil receipts in Roads, and long-term assets, of infrastructure, we spent the money on recurrent items of expenditure.
This is clearly discernible from the Annual Federal Budgets of that era, where the maximum provision for Capital Expenditure struggled to exceed 20%, when they seldom went beyond the threshold of 15%; and what was ultimately released by way of cash was scarcely ever in excess of 50%.
The result of these, of course was that by 2015 when I took office, there were over 200 roads whose contract values were in excess of N2 trillion and for which payments had only cumulated to about N500 billion.
Some of these roads had been awarded for upwards of 10 (ten) years. Inadequate budget and funding had delayed their completion. Many sites had been abandoned, workers laid off, equipment grounded.
This was where the Buhari Government picked up. With significantly lower oil incomes, we got the contractors back to site one after the other. We raised the budget size from N4 Trillion to N6 Trillion in 2016 and increased capital spending to 30%; which was funded by borrowing to finance the deficit.
For those who wanted roads to be fixed and those who did not want the nation to borrow, there is no middle ground. You either borrow to invest in tomorrow’s infrastructure at today’s prices, or wait until you can do it tomorrow at tomorrow’s price.
Our reality today is that the roads that were awarded 10 years ago and were not funded then have to be funded at today’s prices of money, interest rates, and at today’s prices of cement, iron rod, laterite and labour wages.
Clearly, we lost not only the value of money not properly invested, we lost value in the cost of doing business without good roads. We lost value in productivity by men and machine that became redundant.
While we cannot recover what is lost, we must not lose what is ahead; in this regard, I am happy to say that the Buhari Government is investing wisely and sensibly in the infrastructure that will drive Nigeria’s tomorrow.
From Rail to Ports, Power and Roads, this administration is resolute in its determination to complete ongoing or abandoned projects. Today, there is no State in Nigeria where the Federal Government of Nigeria is not executing one Road Project.
Hon. Commissioner has confirmed in his address Roads being executed in Kebbi. He wants more , the Buhari Government is ready to do more. It is in your hands to bring him back.
Undoubtedly, we have done more with less. This is the meaning of value. But there are other challenges that we must work together to improve upon in order to remove avoidable costs from Road and related infrastructure development.
A) Land issues, compensation, and court cases compound the cost of construction.
B) Conflicts, security breaches, pose risks to construction workers, which escalates costs in many ways, such as insurance, payment of security personnel, delays to project completion, to mention a few;
C) The absence of uniform Public Sector Procurement Prices;
D) Proper project planning, development and supervision;
E) Post-construction maintenance of scheduled and unscheduled natures to achieve asset life cycle expectation and performance; ( Bridges – Tamburawa, Tatabu, Third Mainland, Niger Bridge, Koton Karfe , Ijora, Isaac Boro).
F) Dispute resolution mechanisms as a means of achieving cost efficiency in road construction and achieving value for money, must be interrogated;
G) Government Treasury Operations and Payment Systems, review and reform will contribute to achieving better value for money in Road Development Project.
H) Increasing local content in Nigeria Road Construction and implementing Presidential Order 5.
Ladies and Gentlemen, these are only some of the items of avoidable costs around which we should have a conversation and a resolution if we are to achieve better value for money.
Each one of them is a full subject of debate in itself.
It is my expectation that many sections of the construction industry will rise up to the challenges inherent in improving each of the areas I have highlighted.
I make myself ready to contribute and participate upon reasonable notice.
Thank you for listening and I wish us very fruitful deliberations.
Babatunde Raji Fashola, SAN
Honourable Minister of Power, Works, and Housing
I am pleased to welcome you to the 24th Meeting of the National Council on Works holding in Birnin-Kebbi, Kebbi State.
2. As you are aware, the theme of this year’s National Council Meeting is “Ensuring Value-for-Money in Nigerian Highways Development”. The theme is apt and timely, considering our collective resolve to address the challenges in road development in the country within available resources.
3. In order to ensure that this target is achieved, it has become necessary for all the critical stakeholders to consider and provide contemporary policies that will support the attainment of the above target.
4. It is quite instructive that the theme was carefully chosen to ensure prudent spending of available financial resources in Highways development in the country due to the huge investment governments at all levels are making in road development.
5. The Meeting is significant as it will afford us the desired opportunities to identify challenges in the highways sector and develop strategies towards addressing them. We are therefore, expected to explore various realistic means of proper utilization of funds and other resources meant for road projects, to enable quick service delivery, which in turn will fast-track national growth and sustainability. May I also stress on the need to ensure that all our recommendations align with the objectives of the Economic Recovery and Growth Plan (ERGP) of 2017-2019 which focuses on restoring economic growth, ease of doing business, investing in our people and creating a competitive economy. The achievement of these objectives largely lies on the availability of good road network across the country.
6. Distinguished delegates and officials, the timing of this meeting therefore, is very significant as it affords us the opportunity to think through and make necessary provisions in our various Budgets for the year 2019 and beyond as well as take necessary steps that will ensure money spent on roads impacts on the Nigerian economy, positively.
7. On this note, I once again welcome you all and wish you fruitful deliberations.
8. Thank you.
Introductory Remarks By The Director, Planning, Research & Statistics, Federal Ministry Of Power, Works & Housing (Works & Housing Sector), Dr. Famous S. Eseduwo At The 24th National Council Meeting On Works At Birnin-Kebbi, Kebbi State
Let me start by appreciating God all-mighty for making this 24th National Council Meeting on Works, holding here today at the Presidential Lodge Conference Centre, Birnin-Kebbi, Kebbi State, a reality. As the coordinator of the Ministerial Planning/Organizing Committee for this important perennial event, I also joined the Permanent Secretary, Ministry of Works, Kebbi State in welcoming you to this week-long meeting with the theme, “Ensuring Value-For-Money in Nigerian Highways Development”.
I wish to also express our sincere gratitude to his Excellency, Senator Abubakar Atiku Bagudu, the Executive Governor of Kebbi State, the government and good people of Kebbi state, for providing the enabling environment for this year’s National Council Meeting On Works.
I like to also appreciate our Honourable Minister Of Power, Works & Housing, His Excellency, Babatunde Raji Fashola, SAN, the two Honourable Ministers of State, Power, Works & Housing, Hon. Mustapha Baba Shehuri and Surv. Suleiman Hassan Zarma, mnis, as well as the Permanent Secretary, Mohammed Bukar, the directors and staff of the Federal Ministry of Power, Works & Housing (Works & Housing Sector) for their invaluable support in bringing together this meeting.
The Nigerian highways development problems are numerous and road is a common good that requires a going concern of everybody. As man cannot live without food, almost at the same scale, man cannot live without road, comfortably. We use road every day virtually for everything that keeps us going.
This underscores government’s continuous efforts to fix highways within available resources over the years. The rationale for this national council meeting on works, therefore, is to identify the unsettling challenges in the road sub-sector and come up with implementable strategies towards improving highways development in Nigeria within available financial, human and material resources.
Permit me to refresh our memories that the National Council on Works is the highest policy-making and advocacy organ in the Works Sector and as such, the stakeholders converged every year to deliberate on issues concerning road infrastructure. This is exactly why we are gathered here today. Thus, we are expected to kick-start the technical sessions any moment from now through the thematic group discussion methodology. The thematic groups were thought out of the memoranda received and summarized for this meeting. We have carefully broken down this year’s theme, “Ensuring value-for-money in Nigerian Highways Development” into five thematic areas which the chairman of the 1st technical session will announce to us very soon.
The National Council Meeting on Works, of a fact, is an inclusive approach to highways policy formulation, aimed at providing practical solutions to the existing road infrastructure development challenges in our country. This year’s thinking is to be guided by the perspective of “value-for-money”.
Let me on behalf of the planning/organizing committee sincerely apologize for any initial inconveniences you may have encountered on your arrival to Birnin-Kebbi, relating to issues ranging from hotel accommodation to intra-city transportation. Such challenges are often normal when a large number of persons visit a city for a programme. Nonetheless, please bear with us because it was due to circumstances beyond our control.
I want to assure you that all necessary arrangements have been put in place to ensure the success of this year’s council meeting. As we progress with the meeting, some of the preliminary challenges will sort out themselves. The secretariat is available for any possible assistance 24/5.
Please open your folders and flip through the programme to be acquainted with the sessions we intend to have from today to Thursday as well as the memoranda for the thematic group discussions and possible recommendations.
Once again, I welcome you to the thinking platform of this year’s national council meeting on Works which we are expected to deliberate on the summarized memos today and tomorrow towards making recommendations to the meeting of Permanent Secretaries holding on Wednesday.
Thank you and wishing you productive deliberations.
Welcome Address By The Permanent Secretary, Ministry Of Works And Transport, Kebbi State On The Occasion Of The 24th National Council On Works Meeting In Birnin-Kebbi, Kebbi State
On behalf of His Excellency, the Executive Governor, Senator Abubakar Atiku Bagudu, Matawalen Gwandu and hospitable people of Kebbi State, I humbly welcome here in Birnin-Kebbi, Kebbi State, “The Land of Equity”.
2. The theme of this year’s meeting is “Ensuring Value for Money in Nigerian Highways Development”, which literally means optimal use of resources to achieve the intended outcome.
3. A limited perception of the benefit derived from the huge investment in Highway projects, believes that, the ends will not justify the means, in terms of resources invested and the intended outcome. However, a wider perception of it shows that the benefit involved is numerous, among which are the following:-
(i) highway projects enhance free movement of people, goods and services, thereby fostering economic, cultural, agricultural and political development;
(ii) Highway projects, link various communities, regions and nations, thereby enhancing regional and international relationship;
(iii) Highway projects, promote peaceful co-existence between various communities, thereby enhancing social development.
This is to mention just a few.
4. The theme seeks for the use of technical knowledge and methods to achieve qualitative works on all Highway projects, ensuring value for money.
5. At this juncture, I would like to commend His Excellency, the Executive Governor of Kebbi State, Senator Abubakar Atiku Bagudu for hosting this important meeting for the first time in the history of the state.
6. The Honourable Minister of Power, Works and Housing, His Excellency, Babatunde Raji Fashola, SAN, also needs to be commended for approving the hosting right to Kebbi State.
7. The Organizing Committee of Federal Ministry of Power, Works and Housing will also not be left behind in the commendation for selecting a theme that encompasses all spheres of life, as no matter how small a business may be, one needs value for his investment.
8. As for the delegates, I wish you an interesting and fruitful deliberations and also call upon you to feel free and visit historic places in Kebbi State, being a home to two famous international festivals of fishing in Argungu and Uhola in Zuru.
9. Once again, I welcome you all to the 24th Meeting of National Council on Works.
GOD Bless Kebbi State
GOD bless Nigeria.
National Council on Works (NACOW)
OSINBAJO FASHOLA AMINA MOHAMMED AT THE GREEN BONDS CAPITAL MARKET INVESTORS CONFERENCE IN LAGOS
Hon Minister of Power Works Housing Mr Babatunde FasholaSANmiddle Minister of Environment Mrs Amina Mohammedleftand CEO Chapel Hill Denham Mr Bolaji Balogun right duringthe Opening Session of the Green Bonds Capital Market Investors Conference organized by the Federal Ministry of Environment with the theme Green Bonds Investing in Nigerias Sustainable Development at the Stock Exchange House Marina Lagos on Thursday 23rd February 2017