The Federal Executive Council (FEC) in its third sitting on Wednesday approved contracts worth N114.460 billion with N106 billion of it being the cost government had to bear for a faulty design of the East-West road projects which is expected to be completed by 2013.
The amount is meant for augmentation of East-West road project, section 1, 11 and 111 bringing the total sum from N138 billion to N245 billion. Justifying the increment of the cost of the project, Minister of Information, Labaran Maku who briefed jpurnalists at the end of the weekly council meeting alongside Zainab Ibrahim Kuchi, Minister of State Niger Delta and Onyebuchi Chukwu, Minister of Health, said the initial design of the project failed to take into account the difficult terrain of the region.
He therefore argued that for the project to meet the required standard, government had to review the entire road structure with the aim of redesigning the shoulders and the width of the roads to meet the required standard.
Make stated further that there was hardly any road or dam project that you give at the beginning that will not end up in review, adding that when the project was awarded in 2006, the cost by the original contractor, Julius Berger, was so much that government refused to touch it.
He explained that the duplication of the project, “is a landmark intervention of the Federal Government on infrastructure in the Niger Delta region.”
The minister noted that, “the augmentation of the project became imperative to adequately complete East-West road project, which by its location in the oil industry zone, is an emerging heavily trafficked road in Nigeria which calls for a stable road pavement that is less prone to frequent failure and disruption of traffic flow.”
To justify the huge augmentation of the project, Kuchi said work would have stopped on the project by the end of August 2011 had the FEC not approved the request for the N106, 968,419,582.65 augmentation of the project.
She also blamed militancy, incessant rainfall in the region as well as budgetary constraints for the slow pace of work and denied that the government at any point in time abandoned the work.
Kuchi said the project which is almost 40 per cent completed when fully completed will create 2000 additional jobs in line with this administration’s transformation agenda.
The ministers did not respond to the question on the actions taking against those who approved and supervised the initial design.
Breakdown of the cost of the three sections are Warri-Kaiama, in Delta State was increased from N64, 125 billion to N112, 166,400,493.60 billion while the Port Harcourt-Ahoada, in River State was increased from the original contract sum of N29, 922,478,839.19 billion to N48, 973, 303,132.78 billion.
The Ahoada-Kaiama section was increased from N44, 883, 718, 253.18 billion to N84, 759, 913, 053.64 billion bringing the total sum to N245, 899,616,680.02 billion from the original contract sum of N138, 931,197,097.37 billion.
The 2011 budget for the ministry of Niger delta affairs is N55, 207,384,358 billion while 51, 977; 575,020 billion is for capital project. For the East-West Road , N15.6 billion has been set outside for the project in 2011 appropriation. The council also approved the award of the design, manufacture, supply, installation and commissioning of two substations in Akure, Ondo State and Olorunsogo, Ogun state under the Transmission Company of Nigeria (TCN) Plc.
The Akure substation, a 2 by 150MVA, 330/132KV plus 2 by 60MVA, 132/33KV with a single Turn In/Turn Out and 2 by 330KV line bay extensions at Osogbo and Benin North sub-stations is at a total sum of $19,025,537.45 payable at prevailing exchange rate at the time of payment plus N1,573,779,429.43 only inclusive of a provisional of a provisional sum of N505,050,433.43 for per cent VAT on onshore payments, compensation and contingency, with a completion period of 24 months.
While that of the Olorunsogo substation, another a 2 by 150MVA, 330/132KV plus 2 by 60MVA, 132/33KV substation at Olorunsogo is also at a total sum of $15,129,749.22 plus N1,267,800,811.75 only inclusive of a provisional sum of N377,182,637 only, for per cent VAT on onshore payments, compensation and contingency, with a completion period of 24 months.
The minister of Information said the contract was in order to develop a strategic plan for reinforcing and expanding the sub-stations nationwide; adding, that it is in furtherance of the federal government plan of providing adequate, reliable and stable national grid that can handle the expected new generation capacity from PHCN and Independent Power Producers, a number of transmission sub-stations were identified by the TCN for implementation within the short/medium strategic plan.
Another approval granted by council was the contract for the design, procurement and implementation of enterprise resource planning software for the Federal Inland Revenue Service (FIRS). The contract, Maku argued was necessary for a successful progression from Business process re-engineering of finance and accounts functions and conversion from a cash-based accounting systems to an accrual based system.
This he further said will pave way for full automation of FIRS finance and accounts functions, with the main objective of attaining effective financial management, accounting and reporting in line with the requirements of the FIRS Act of 2007. He also stated that the “proposed automation of finance and accounts functions will interface with the Integrated Tax Administration System ( ITAS) to make tax administration easier and also tax compliance cheaper for improved revenue collection
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