My Ministry Owes 3,504 Contractors N69.9bn – Fashola
Minister of Works and Housing, Babatunde Fashola, on Thursday, said his ministry owes 3,504 local contractors in the housing sector N69.9billion.
Fashola disclosed this when he appeared before the National Assembly Committee on Housing to defend his ministry’s 2021 budget proposal.
The Minister sought the assistance of the lawmakers on how to defray the liabilities because the N76.4billion allocated to the ministry in the 2021 budget would be grossly inadequate to execute its proposed 186 projects across the country.
Fashola asked for understanding of the lawmakers to assist defraying the liabilities.
He said 2,601 of the contractors being owed N33.9billion executed zonal intervention projects popularly referred to as constituency projects.
He urged the lawmakers to identify the affected projects in their constituencies that had attracted huge liabilities and pick them as their special intervention programmes for 2021 instead of proposing new ones.
However, lawmakers rejected the idea and asked the Minister to propose a separate budget for the purpose of paying the debts owed contractors that handled the building of schools under the special intervention programmes.
Fashola said: “As pointed out, if you look at page six of my presentation the big ticket items there is this housing project of N30billion. The next one is special projects.
“What is special project? Your constituents. Because in Nigeria we don’t feel comfortable when we are discussing in public.
“Special projects are your constituents and those are the people on whose behalf you are here.
“They are the primary schools, the mathematics centres, the skills centres…that is what it is. So we have to make a choice.
And that is why we are saying instead of starting new ones next year let’s look for possible solution.
“Let’s behave like the very smart people that we are and so instead of starting a new one next year, let’s use next year’s appropriation to finish this so that we can pay those small contractors and there will not be default in the system.
“That is why we are here. But if we choose to say no, it is Ministry of Works problem, it is not Ministry of Works problem. It is Nigeria’s problem.”
At this point, Chairman, Senate Committee on Housing, Sam Egwu (Ebonyi North), interjected, saying money should be appropriated specifically for completing such projects.
Egwu said: “On this issue we have said on these areas that you appropriate it in the budget so that the money will be meant specifically for completing the projects and so that they don’t remain abandoned.
“Nobody is suggesting that you abandoned it. We are just saying that instead of using the money for the current year to pay liabilities, you appropriate money for it from the beginning so that money for that will be used to clear outstanding debts.
“I am not trying to stop what you are saying but it is not necessary for us to dwell on something we have already got a possible solution to.”
Fashola said: “Mr. Chairman, with great respect, you have the gavel but I listened to everything and you made the directives that we are not going to 2021 until we answer questions on the 2020 appropriation.
“And I took notes because I thought what the members were saying was important and you then asked me to respond to them. If you wish me to stop I will.
“Mr. Chairman, that was the biggest item in the debate, this was what seven people discussed and now you are asking me to summarize it.”
Fashola said his ministry would concentrate on the completion of the 2,140 units of houses under the National Housing Programme spread across 34 states and the Federal Capital Territory.
He also said that the ministry has plans to complete the ongoing federal secretariats in Anambra, Bayelsa, Ekiti, Nasarawa, Osun and Zamfara.
He added: “The major factor militating against the timely completion of projects is insufficient budgetary provision for projects to sustain annual cash-flow requirement levels.”
He urged the lawmakers to consider a possible legislation that would ensure proper maintenance and operation of public buildings in a way to generate employment and additional revenue for the country.
He also said there is need to amend the Public Procurement Act to ensure that contractors in the housing and other allied sectors gets 50 per cent mobilisation fee instead of the present 15 per cent which has become rather insufficient to kick start any major housing project in the country.