The Federal Executive Council (FEC) has approved ₦873.23 billion for the Federal Ministry of Works for the execution of three budgets across the country.
Minister of Work, Dave Umahi, who disclosed this to journalists at the State House, Abuja, after the week’s FEC meeting, also explained that the ministry’s concrete roads policy is not responsible for the rising cost of cement.
Speaking on the approvals his ministry obtained from the memoranda it presented to Council, Umahi said there was an approval of an additional N757bn as augmentation for the dualisation of the 489km Obajana-Benin Road, N2.23bn for the Isheri-Ogun Road, and N114bn for Outer Marina shoreline protection.
“Today we’ve got augmentation approved for Obajana in Lokoja to Benin Road, a total of 244km and 489km dualized. Recall that in 2012, this project was awarded to four contractors: CGC, Mothercat, Dantata & Sawoe and RCC, at a total cost of N122bn, and that was for light rehabilitation.
“Around 2018, the past administration reviewed the project and dualised it and that’s why you have a total of 489km and have now gotten ‘No Objection’ from BPP. When I came on board in August, we were supposed to present the no-objection to FEC in line with due process, and we decided to review the project, one, to determine whether the dualisation was desirable in view of the economic challenges, and two, to see the texture of the soil and what to do.
“So we had to restore the project now, but we didn’t increase the cost. We got approval for argumentation from N122bn to N897bn. The contractors were off-site because they would not be working and they would not be paid based on the new basic rate. So we got them back to the site, and today we got approval.”
The Council also approved N2.23bn for the Federal Roads Maintenance Agency for the rehabilitation of the road from Isheri North to Ogun State.
“Now, under FERMA, we got approval for the construction of Isheri north, Lagos route, which is to connect Ogun State. This is an alternative route to Lagos-Shagamu Road, and we’re going to toll this Lagos-Shagamu road when it’s completed. But by law, you can only toll a federal road when you have an alternative.
“This approval of about N2.23bn to connect Isheri North to Ogun state. It is a breakthrough that has freed the Lagos-Shagamu for tolling,” he revealed.
Explaining the Council’s approval for the N114bn Outer Marina shoreline protection, Umahi said, “The shore protection was done over 50 years ago with sheet piles, and we had to take the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on a tour with Julius Berger through the entire shoreline of 3.92km.
“We took the tour with Julius Berger, CCECC, CBC and BuildWell, and demanded for them to inspect and then give us their proposal. Only BuildWell and CCECC brought their proposals.
“Whereas CCECC was quoting on 3.2km at N134bn, BuildWell was quoting on 3.9km at N114bn. We sent the two to BPP and BPP found merit in BuildWell because of cost and, of course, the latest technology in doing shore protection using interlocking concrete, which will not be subject to rusting. So we got approval for Build Well in the sum up N114bn”, he explained.
Umahi said the shoreline protection project was necessary given its proximity to the recently inaugurated Red Line and other existing structures in the area. He added that his ministry sought to leverage the low-water levels of the dry season to drive piles down the shore.
The Minister also spoke on insinuations that cement prices had been skyrocketing because of his ministry’s concrete road construction policy, saying the cost of production for cement companies, rather than his ministry’s policy, has sent cement prices upwards.
He also explained that concrete roads will not phase out traditional asphalt roads, but is only an alternative for sites with high water tables and poor conditions.
On the claim that concrete road projects are driving cement prices up, Umahi said, “this assertion is highly misplaced because the policy has not even taken off”.
Fielding questions on the issue, Umahi cited recently released documents showing that Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc spent N598.14bn on power during the full year ended December 31, 2023.
“I just got a document this morning where three companies producing cement, Dangote, BUA, and Lafarge, said in 2023, the total cost of their gas rose by over 42 percent. So, if the cost of their gas rose by 42 percent and then the import duty exchange rate also gone up, it is expected that the cost of cement would go up.”
“But Mr. President has discussed with them, and I think there are a couple of incentives being made available to them that should reduce the cost of cement. In Sokoto, where I visited recently, the BUA Executive Director said that the ex-factory was N6000 and that was down from 8000.
“We are getting there because Mr. President has directed them to reduce the price and they have to comply, and I think Mr President has also offered them some incentives.
“So it’s not because we are going from asphalt to concrete. And we are not totally leaving the asphalt. It is just an alternative, especially where we have a very high water table and then a very poor sight condition,” he said.