The Nation Newspaper

Tag: infrastructural

  • Infrastructural development and contractor impunity: A case study

    Infrastructural development and contractor impunity: A case study

    Consider with me the following three theses:

    First, infrastructural development is key to economic breakthrough even in an era of dwindling resources.

    Second, Nigerian governments have not been unmindful of the importance of infrastructural development as evidenced by the various budgets and development plans since the beginning of the republic, and especially in the last 16 years.

    Third, unfortunately, the terrible disease of impunity that has hitherto characterised government activities and projects, especially in the last dispensation, also afflicts contractors working for government on infrastructure, including especially federal roads. Thus even when the government has discharged its responsibilities and mobilised contractors with funds, nothing tangible gets done with contractors abscondingwith mobilisation funds, leaving projects uncompleted and in some cases unbegun.

    The first thesis is uncontroversial and doesn’t really need justification as has been attested to by experts and confirmed by the experience of other nations. The United States is a good example of a nation that invested in infrastructure right from the beginning of its birth and maintained its dominance by reinvesting in infrastructure. Even during its most trying period at the depth of its economic depression, the visionary leaders of the US attacked the enemy and dug the nation out of economic doldrums with massive public work investment.

    The link between infrastructural development and economic development is fairly straightforward. Though nations emerged from agricultural settlements, no nation can develop to its full potentials and take care of its population on the basis of subsistence agriculture alone. But for a successful revolution in agricultural development, a good network of roads is minimally essential for obvious reasons. So is a good system of irrigation. We cannot forget the need for power at least for the sustenance of irrigation and for the maintenance of a good storage system, which ensures food availability through the seasons. This is purely elementary. But we have not even got the elementary and rudimentary nature of the linkages right. Hence our predicament in the matter of sustainable development of agriculture even in the 21st century.

    If we choose not to be in a rush to advance and therefore we limit ourselves to agriculture and its infrastructural needs, it is clear that we are far behind in the reconciliation of where we are with where we ought to be. We have land masses that remain largely uncultivated mainly because farmers are condemned to middle-age methods of farming and even when they endure the drudgery, they are faced with the daunting task of evacuating their harvests to urban markets and many of the produce perish in the process.

    Second, our government is not unaware of the importance of infrastructure for economic advancement and national transformation. Our development plans in the 60s and 70s up until the mid-80s were meant to accelerate the pace of development with emphasis on infrastructure. Since 1999, there have been noticeable efforts in the same direction, culminating in the 2010 discussions between the African Development Bank Group (AfDB)and the administration of former President Goodluck Jonathan.

    As reported by the Bank in its prepared report, the government of Nigeria requested the bank to “prepare a report on the state of infrastructure in the country.” Among others, the Bank noted that “investments in infrastructure are critical to advances in agriculture, which is one of the key pillars of the Nigerian economy, and human development, including the delivery of health and education services to the poor.” The Bank then provided an assessment of the status of infrastructure in the transport, power, information and communication technologies, and water and sanitation sectors. It prepared an action plan for the country to achieve the goals set by 2020. That was six years ago. Needless to add, we have hardly started the implementation of the plan.

    One of the action plans with regard to the transport sector was that “about 145,000 km of the existing network (equal about 75 per cent of the total network) would be rehabilitated and selectively upgraded, including rehabilitation and upgrade of the tertiary network that serves rural communities. Some 7,993 km of existing federal primary and secondary roads will be dualised, with all of the primary roads completed and 1,685 km of the secondary roads in the federal network.” Due to space factor, I limit myself to just these two of the identified Action Plans.

    Shortly after, in July 2012, the government tasked the National Planning Commission with the responsibility to coordinate the preparation of a National Integrated Infrastructure Master Plan (NIIMP) for the country to be implemented over a period of 30 years. That coordination had hardly taken off before the government was sent packing.

    Now to the third thesis. At a retreat organised by the presidency on the implementation of the plan, former President Jonathan himself zeroed in on one of the major reasons for the failure of all the efforts toward the development of infrastructure in Nigeria. He observed that greed and corruption were the twin evils that militate against the development of Nigeria. I make bold to suggest that contractor corruption and impunity and governmental connivance are at the center of the evils that befall Nigeria and have drawn it backwards since its birth as a nation, and especially since the beginning of the Fourth Republic.

    Every year there is budget earmarked for road development, including reconstruction, rehabilitation, pavement, etc. of federal and state roads. However, in the most successful scenario, we may have a third of these partially implemented and none fully implemented. Not that the contractors are not funded. Usually, they and the monitoring authorities have a deal, which ensures that should the contractors abscond with the funds, they are not pursued or forced to complete the project for which they received funds. This is why abandoned projects litter our streets and the masses are suffering in silence. This is why we hardly see contractors punished for failure to discharge their contractual obligations even after receiving funds.

    The Okeho-Iseyin Federal Road is a case study of an abandoned project six years after it was awarded in 2009 to a contractor (name withheld) for about N1 billion for the 30 km road. The stipulated completion time was SIX MONTHS! And we have the contractor to thank for having partially completed 8 km in SIX YEARS. Prior to this latest experience, there hadn’t been any good report on the performance of the Federal Government and the incompetent contractors that it decided to have handle the fixing of the road. For hardly had they completed the job than the road started disintegrating even before they packed they equipment.

    In the current case, the ministry and its zonal office did not deem it necessary to sack the contractor company and in the last six years, it has been a frustrating experience of a most incompetent and inefficient execution of the project. The contractor has often abandoned the site such that one would conclude that the government had sacked him. Then he would reappear with an assembly of some old and dilapidated equipment that would suggest that it couldn’t be a Federal Government project. And yet, this is a billion Naira federal road rehabilitation project! The question is: why is an incompetent contractor handling a federal road? And why is the government not caring enough to ensure that its resources are not squandered and the people do not suffer undue neglect?

    Last year, Governor Abiola Ajimobi moved to fix the road. But as word reached the contractor, he cunningly moved his equipment back to site. Shortly after, he disappeared. Three weeks ago, the contractor resurfaced again with piles of laterite on the road, another clever gimmick to hold on to the project and continue with its shoddy job or to avoid the scrutiny of the new Minister of Works known for his conscientiousness and spartan discipline. It is time to either terminate the contract and give it to a competent contractor or force its efficient and satisfactory completion. For apart from its internal developmental benefits, the road is a major portion of the Oyo-Iseyin-Okeho-Wasimi Road, which when fixed, will facilitate trade with our Benin Republic neighbours.

  • ‘Why infrastructural projects are delayed in Nigeria’

    Nigeria recorded over $93 billion in infrastructure deficit over the years, and for government to attract additional infrastructure financing for increased delivery of projects, it needs to renew its focus on delivering financial instruments, Managing Director of Hortigraph Nigeria Limited, Murtala Abubakar, has said.

    Speaking at the unveiling of the Standards Organisation of Nigeria (SON) Metrology Institute in Enugu, Abubakar said infrastructural projects in the country are often not delivered within the agreed timeline due to financing gap that often keeps contractors at sites beyond agreed period, while widening the budget of the project.

    Indeed, a recent report by PricewaterhouseCoopers Limited showed that Nigeria’s infrastructure projects are most times behind the scheduled date of delivery by at least two years, while budget estimates are double the original estimates.

    Abubakar noted that in addressing this key challenge of financing, cost of funds should be addressed, adding that financial instruments required to attract additional infrastructure financing to the country like, bridge equity, secured loans, refinancing/secondary transactions, as well as credit enhancement and other risk mitigation measures geared at attracting non-traditional funders such as institutional investors and international investment banks should be created.

    He explained that his company, with many years of experience in key mass housing and infrastructural projects, hopes to complete the metrology institute within the timeline of three years considering other major variables.  “As a civil engineering firm with at least 15 years experience in housing and government projects, the Nigerian Metrology Institute (NMI) is the first project that the firm would be executing for SON and we have commenced work to ensure that the timeline of three years is met while ensuring that the quality and standards of the project are not undermined.

    ”We are also working to ensure the sustainability and environmental friendliness of the project by ensuring that it complies with the Environmental Impact Assessment (EIA) requirements,” he added.

    Already, PwC in its report had stated that, “infrastructure plays a key role in economic growth and reducing poverty having a 5-25 per cent yearly return on investment as an economic multiplier.

    “Those countries that have been most successful in developing and maintaining infrastructure have established programmes of prioritised investment opportunities with a number of features, including clear political support, proper legal and regulatory structure, a procurement framework that can be understood by both procurers and bidders, and credible project timetables,” he said.

  • Parents seek infrastructural development in Unity schools

    Despite the plan by the Federal Government to employ 1,000 teachers for the 104 unity colleges nationwide, parents are seeking infrastructural development.

    The challenges pupils face learning were the while focus of discussions at the Southwest zonal meeting of the National Association of Parents of Federal Unity Secondary Schools (NAPAFUSS) held at the Federal Science and Technical College (FSTC), Yaba, Lagos penultimate Friday.

    During the meeting, the Parent Teacher Association (PTA) chairmen of the 17 colleges underscored the importance of partnership with the government and management of the institutions to improve quality of education service delivery in the single and mixed sex colleges in the southwest.

    In an interview, the Southwest Zonal Coordinator of the association, Pastor Rufus Famuwagun, said many of the colleges need infrastructure and urged the federal government to enhance their facilities.

    “The standard of education in the unity schools is not the way we want it. There are still some problems with the underfunding of education by the federal government that is why we say we are not where we want to be. We don’t have enough teachers, lack of infrastructural facilities, buildings; so we always assist the schools in the employment of part-time teachers; building of infrastructural/hostel accommodations, etc. But we want the government to do more,” he said.

    Also speaking, the Acting PTA Chairman of the host school, Mrs Obi Igwillo, said the group would appreciate the absorption of part-time teachers the PTAs have employed into the Federal Civil Servive by the Federal Ministry of Education.

    She said at the FSTC, Yaba, the PTA pays the salaries of 35 of the 97 teachers part-time teachers employed by the school.

    “The FSTC, Yaba has 97 part-time workers. PTA pays for 10 and the school is asking us to pay for more. The PTA has other support workers so our bill runs into a million every month,” she said.

    However, principal of the college, Mr William Iweama, commended the Federal government’s invest in the unity schools.

    “Every month we get N5.5million to run the school; we get N3 million for feeding. It is just that education is expensive. A private school that wants to employ our kind of teachers will not charge less than N200,000 a month,” he said.

     

  • Fashola advocates rapid infrastructural development for Africa

    Fashola advocates rapid infrastructural development for Africa

    Lagos State Governor Babatunde Fashola (SAN) has advocated rapid infrastructural development in Africa to solve the continent’s development challenges.

    The governor noted that infrastructural deficiency has hampered the vast opportunities for economic growth on the continent.

    Fashola spoke in New York, the United States, at a special interactive session of the Goldman Sachs Growth Market Summit anchored by the Chairman, Goldman Sachs Asset Management, Mr. Jim O’Neil.

    The theme of the event was: Delivering Nigeria’s Growth Promise.

    The governor said there are several opportunities in Africa that have not been accessed because the infrastructure that could enable people, goods and services to move more easily are insufficient.

    He said: “I know that there are much more opportunities in-locked in Africa that are yet unreachable because the infrastructure that can facilitate easy movement of people, goods and services are still in short supply.”

    Fashola stressed that most African countries are also bogged down by leadership challenges.

    The governor said the continent, with its vast natural resources, including mineral and human resources, has the potential to develop more rapidly than most other economies of the world, if sufficient infrastructure, such as roads and good transportation, were put in place for easy movement of people, goods and services on the continent and beyond.

    He also blamed the slow pace of development on political instability.

    According to him, most African countries have suffered underdevelopment because of the level their governments function and the rapidity of change of governments.

    The latter, Fashola explained, does not allow sufficient time for any appreciable development.

     

  • Infrastructural Development: Money is not the problem, says Obi

    ANAMBRA State Governor, Mr. Peter Obi has charged Bishops and pastors in charge of construction of various missionary hospitals and institutions to double their efforts towards the completion of the various projects.

    Obi also gave the same charge to contractors handling different projects in the State ranging from roads to water projects.

    He said this yesterday during the routine visit to some of the hospitals, including St. Joseph Hospital, Adazi-Nnukwu; Iyienu Hospital, Ogidi; School of Medical Laboratory of immaculate Heart of Mary Sisters, Umuoji; Old People’s Home, Nkpor, Girls’ High School, Agulu, among others, where government is  building various structures.

    Obi assured them that money will not constitute any hinderance in the completion of the projects, as his government, through savings and prudent management of its resources of the State, has enough money for all ongoing projects in the State as well as those that will be started in no distant future.

    Obi, who distributed cheques totally N100million to them, explained that government’s support for missionary schools and hospitals were informed by the fact that those institutions render quality services to the people of the State at subsidized prices.

    Besides, he said since the government started executing projects directly through the beneficiaries; the culture of endless variations has stopped. “I am even willing to deepen my collaboration with the Church and all organisations of goodwill.

  • NACCIMA condemns infrastructural decay

    THE Federal Government has been urged to formulate policies to support businesses, especially Micro, Small and Medium Enterprises (MSMEs).

    The President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. Herbert Ajayi, urged the government to adopt a bail-out mechanism that can reduce the harsh operating environment.

    He said: “The present state of power supply has continued to constrain capacity utilisation in industries and also increase cost of doing business.

    “The economy will move faster and record a higher percentage in implementation of projects, if security and power challenges are addressed. Many businesses, especially the MSMEs are groaning under the high tariff of electricity, while continuing to spend more on generating power through fuelling of generators.”

    Ajayi listed some of the challenges facing operators as high cost of infrastructure, insecurity and dumping of sub-standard goods in the country.

    He added that lack of adequately equipped enterprise zones, industrial clusters and parks at state and local government levels have also been hindering the private sector’s growth.

    Ajayi urged ministries and parastatals to take the lead in encouraging local production by patronising locally made goods.

    The economy, he said, is heavily import-dependent, both for industrial raw materials and finished products.

    NACCIMA has praised the Oyo State government for its transformation of Ibadan into a modern state capital, adding that it would attract foreign investment and facilitate industrial growth.

    Speaking when he visited Governor Abiola Ajimobi in his office in Ibadan, Ajayi said:

    “Our observation is that this state is moving very fast on the path of transformation. We also noticed that Oyo State, particularly Ibadan, the state capital, is getting cleaner and neater. We also want to congratulate you on the commissioning of Secretariat-Bodija Bridge, which will ease movement of people of the state and improve on their living standard.”

    He urged the governor to give priority to the Chamber and the Organised Private Sector (OPS).

    The partnership, he said, would fast-track the state’s industrial development and reduce unemployment.

     

  • FCC to partner NPC, Bureau of Statistics on infrastructural development

    FCC to partner NPC, Bureau of Statistics on infrastructural development

    The Federal Character Commission (FCC) will partner the National Population Commission (NPC) and Bureau of Statistics to ensure equitable distribution of infrastructural facilities in Nigeria.

    The commission has unveiled plans to embark on the monitoring and enforcing of equitable distribution of infrastructural facilities in the 36 states.

    Its Chairman, Prof. Shuaib AbdulRaheem, spoke to reporters at the weekend in Ilorin, the Kwara State capital.

    He urged the Federal Government to support the commission in implementing this plan to ensure fairness in the distribution of infrastructure in the country.

    Prof. AbdulRaheem said the commission had prepared its guidelines in embarking, monitoring and enforcing the distribution of infrastructural facilities, adding that its greatest challenge is to get funds that would enable it undertake infrastructure auditing in the country.

    He said the idea was to ensure that there was equitable distribution of infrastructure in the education, agriculture, health, communications and transportation sectors.

    “To achieve this plan, FCC will work with the National Planning Commission and Bureau for Statistics on how to advise the Budget Office and other federal ministries and parastatals involved in the provision of infrastructural facilities and socio-economic amenities,” the commission’s chairman said.

    According to him, in the last five years, the FCC has been educating and enlightening the citizens on the need to imbibe the federal character principles.

    Prof. AbdulRaheem said the FCC had adhered to its guidelines of ensuring that no single interest group in the public service constituted more than three per cent of the total work force in any organisation, adding that the commission had ensured equitable distribution and employment of graduates in the federal public service.

    He debunked the claims in some quarters that politicians have hijacked the functions of the commission in terms of employment, saying it does not play politics with the federal character principle.

     

  • Amosun’s infrastructural financing model

    Amosun’s infrastructural financing model

    “Rough waters are truer test of leadership. In calm water every ship has a good captain”—Swedish Proverb.

    Ogun State Governor, Senator Ibikunle Amosun, has again unveiled another financial masterstroke that promises to transform the infrastructure landscape of the state. The parlous financial position of his state compelled him come up with a novel idea that will enable him use other people’s money to develop his state.

    An innovative financial system that would see well-placed construction companies undertake the construction of developmental infrastructure, especially roads, for the state on credit to be paid in instalments later. The arrangement is a Public-Private Partnership (PPP) scheme.

    The payment plan, which is a direct fallout of the confidence he has instilled in the state’s financial system would come in form of ‘promissory note’ (or Treasury bill) arrangement. The idea is akin to the popular ‘hire-purchase’ arrangement that commercial drivers enter into with auto-dealers whereby a vehicle would be released to commercial drivers on credit and the money for the vehicle is paid over a period of time.

    However, unlike in the case of the normal ‘hire-purchase’ arrangement where the auto dealer keeps a copy of the vehicle key and is at liberty to confiscate the bus if the driver defaults in the payment, the companies in this arrangement will not be able to do that hence the need for a law, making it mandatory for the state government to stick with the payment agreement no matter what, whether there is a change in government or not.

    This arrangement can also be likened to a situation where a worker buys a 32’’ LG Television set from his cooperative society on credit with a promise that payment be deducted from his monthly salary over a period of time.

    To allay possible fears of any default in the re-payment schedule, Senator Amosun has sent a bill to the State House of Assembly asking for the enactment of a law establishing a ‘sinking fund’-a pool of funds dedicated for a specific purpose- in the financial firmament of the state.

    The proposed law also seeks to set up a legal framework which must be adhered to whenever the government wants to access any loan in the state. The law would serve as an instrument for enforcing fiscal and financial discipline.

    The bill titled “A bill for a law to provide for the raising of loans through issuance of bonds, (treasury) notes and other securities, and for connected purposes,” spells out the steps and procedures to be taken by the government whenever it wants to access any loan, a sort of regulatory framework for taking loans. The bill also seeks the establishment of a ‘sinking fund’ by the state government. The ‘sinking fund’ will be made up of 15 percent of all Internally Generated Revenue (IGR) of the state and must be dedicated to the repayment for projects executed under the ‘promissory note’ arrangement.

    Interestingly, the ‘promissory note’ initiative presents the people of Ogun State with a ‘Win-Win situation’. It ensures that situations where funds meant for projects are diverted becomes a thing of the past, and ensures that the people will enjoy the infrastructure before the state will start paying for it. The law would equally serve as bulwark against the diversion of developmental funds.

    This novel idea would at least ensure that the people of Ogun State can always see what their money is spent on.

    The state Commissioner for Finance, Kemi Adeosun, at a recent media briefing, dismissed insinuations that the Bill sent to the legislature was to facilitate the state access to Bond. She explained, ‘it is like people in Ogun State are fixated with bond. But the bill we sent to the Assembly is not to ask for approval to take bond. Yes, bond is good as a long term financial instrument, but we are not going for it. That is not our intention. The finances of Ogun cannot sustain a bond presently. Our debt portfolio is high and our IGR is low. We inherited a debt profile of N87 billion in 2011 and as at today we have reduced it to about N60 billion; but our IGR is still very low and all these would be taken into consideration when they want to calculate the amount you can take as bond.

    “Again, the process that would lead to a bond is long and might not materialize until the final year of the administration”, the commissioner noted. She added the process of accessing a bond “include applying and getting approval from the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE), appointment of a legal team, financial advisers, trustees as well as the consent of the Federal Ministry of Finance, all these after we must have secured the approval of the state House of Assembly on the move.

    “With a Bond, you have to issue what is called Irrevocable Standing Payment Order (ISPO). With an ISPO, your allocation won’t come to you intact again. The debt would be deducted directly from Abuja. Before the allocation gets to you, the Federal Ministry of Finance deducts at source.

    “We are not running away from accessing a bond. We are not scared of the approval process either but we simply don’t think that a bond is the only option at the moment. We don’t think it is an appropriate and viable option for now. But with this ‘promissory note ‘arrangement, no ISPO is needed. All we need is the goodwill, a Memorandum of Understanding and a firm commitment from the government in the mould of this law we seek from the House of Assembly,” the commissioner stated.

    This novel idea promises to fast-track development across the three senatorial districts of the state as no fewer than six companies are already on standby to construct 10 roads for the benefit of the people. With the arrangement, the people of the state can practically eat their cake and still have it!

     

    • Balogun is an aide to governor Amosun