The Ministry of Works is seeking a budget allocation of N657 billion for the fiscal year 2024, as revealed by Minister Engr. Dave Umahi during an address to the joint committee on works in Abuja on Monday. The proposed budget includes allocations for the ministry and its affiliated agencies.
The breakdown of the proposed budget indicates that the Capital Budget for the Ministry of Works itself is set at N566.47 billion, while its parastatals, including the Federal Road Maintenance Agency (FERMA) and the African Regional Institute for Geo-Special Information Science and Technology (RECTAS/AFRIGIST), account for an additional N51.28 billion and N104.04 billion, respectively. This totals to N617.85 billion allocated to the parastatals.
Further details reveal that the Overhead Budget Proposal for the Ministry is N668.12 million, with the parastatals, FERMA, and RECTAS/AFRIGIST requiring N22.03 billion and zero allocations, respectively, resulting in a total of N22.70 billion for overhead costs.
In terms of personnel costs, the proposal sets aside N12.60 billion for the Ministry and N4.08 billion for its parastatals.
The Minister emphasized the significance of the proposed budget, highlighting that 693 new projects have been included, aiming to enhance road network connectivity and improve traffic circulation on the Federal Road network. The primary objective is to boost socio-economic activities in the country.
According to him, “The primary objective is to enable the Ministry achieve its mandate in providing a quality Federal Road network that serves as an environment to aid socio-economic growth of the country.
“The main challenge to highways development in the country remains inadequate funding. As at date, government is committed to highway contractors to the tune of about N13.835 trillion with a total of about N1,507,873,365,516.02 unpaid certificates for executed works.
“Secondly, the dearth of younger Engineers/Technical Officers in the Ministry as a result of embargo on employment is affecting effective project supervision at the sites. It is expected that more sources of funding of highway projects be explored as well as lifting the embargo on employment of needed Engineers/Technical officers at middle level to enhance supervision of projects.
“Our Ministry has set up six committees to review all debts, approved and unapproved variations on prices of basic rates, and all augmentations that occurred before May 29th 2023 and from May 30th 2023 till date.
Engr. Umahi further stated that, “The provision of an Emergency Fund of about 30% of the Budget Provision will cater for unforeseen emergencies that regularly occur on the road network especially during the rainy seasons;
“An increase of the Ministry’s present budgetary allocation to about N1.5trillion to complete at least 10 selected critical roads and bridges in each of the six geo-political zones of the country;
“Urgent review of all certified debts to contractors and if possible, convert same to Promissory Notes to contractors so that we can get properly focused in using any fund appropriated to us to pursue the Ministry’s set objectives;
“Inflation- Many contractors are presently out of sites because they have exhausted their contract VoPs and needed the projects unit rates to be reviewed. It will be good that all VoPs and augmentations of all the projects are reviewed and those that are owed be converted to Promissory Notes, while unit rates regime will take effect on contractors in line with the current realities of the construction industry.
“More eligible companies should be encouraged to key into the Road Tax Credit Scheme to increase the number of private sector interventions. This means front-loading their tax liabilities to solve our present challenges;
“Raising of Bonds from the Capital Market to finance road development in the country;
“Creation of an enabling environment by fixing the roads so that the deployment of the Highway Development and Management Initiative (HDMI) can be effective.
“That appropriations for projects be such that no projects when started should last for more than four years,” he said.
