Minister of Works, Engr. David Umahi, has disclosed that the pressure on the Naira in the foreign exchange market and the removal of fuel subsidy have negatively impacted efforts of government to complete inherited road projects.
As a result, the Minister summed up that the administration of President Bola Tinubu will now need over N19 trillion to complete inherited road projects.
Umahi, speaking at a media briefing in Abuja two days ago, explained that the new estimate represents an increase of N3 trillion from the N16 trillion initially projected in August 2024.
At a previous press conference on August 23rd, Umahi had noted, “The funding gap to complete all inherited projects was about N13 trillion as of May 2023. This will exceed N16 trillion when all projects are reviewed in line with current market realities, due to the removal of fuel subsidies and the floating of the Naira.”
During the recent media briefing, the Minister elaborated on how these factors continue to affect project delivery.
He stated, “The President inherited a total of 2,604 projects as of May 29, 2023, with an initial estimated cost of N13 trillion and an outstanding debt to contractors of N1.6 trillion. When you consider the cost variations due to the Naira float, the review now places the total ongoing projects at over N19 trillion.”
Umahi added that President Tinubu has prioritized funding these projects, seeking both internal and external sources, including loans, due to his commitment to improving Nigerians’ quality of life. The President’s focus on infrastructure is based on the transformative economic benefits roads and bridges offer.
The Minister also highlighted a looming consequence for Julius Berger, the contractor for the Abuja-Kano road project, warning that the Ministry would revoke the contract if the company fails to mobilize to the site by the end of a seven-day ultimatum, set to expire on Wednesday. He noted that negotiations between the Ministry and the contractor spanned 17 months and that it was time for definitive action.
