2021 Budget Defence: Nigerian govt owes contractors N69 billion – Minister of works, Fashola
The Minister of Works and Housing, Babatunde Fashola has revealed that the Federal Government of Nigeria owe contractors carrying out works for the ministry a whopping N69 billion.
He gave the revelation at the 2021 budget hearing before the joint Committee on House on Thursday in Abuja.
“The Federal Government of Nigeria has outstanding liabilities of N69 billion to contractors executing various forms of projects in the housing sector”, he said.
The Joint Committee of the Senate and House of Representatives on Thursday in Abuja, met to scrutinize and allow the Minister defend the 2021 budget estimates of the Ministry, but Fashola maintained the capital component of the Budget was meant to complete the ongoing projects in 2021.
He said the liabilities were incurred from 29 contractors executing projects in the urban and regional developments department of the ministry.
“Others are 59 from Engineering Services, while Public Building and Housing Development have 794.
Giving a run down, he said, Lands and Housing Developments 10, Public-Private Partnership 11 while Special Project Unit has 11 contractors.
Explaining the 2020 budget performance, the minister explained that about 1,786 National Housing projects out of 3,926 which were initiated by the Federal Government have been completed.
He added that the 2021 budget would be anchored on the completion of the remaining 2,140 housing units under the national housing program in 34 states of the federation and the FCT.
Fashola also said six Federal Secretariats were under construction in Bayelsa, Anambra, Ekiti, Osun, Zamfara and Nasarawa states.
On the issuance of Certificate of Occupancy(C of O), the minister said a total of 3,950 C of Os and 1,246 consent were issued and granted to Nigerians from Jan 2018 to Jan 2020.
According to him, some of the requests for the C of Os dates back to 1996, noting that the issuance would further accelerate economic growth and development in the sector.
He said the major factor militating the timely completion of housing projects was insufficient budgetary provision for the projects to sustain annual cash-flow requirement levels.
Fashola also said there was a need to complete all ongoing projects before embarking on new projects.
Meanwhile, on the performance of 2020 budget, by the ministry, Fashola said out of the N72 billion appropriated for capital projects, N48 billion had been released to the sector representing 67.41 per cent of the sum appropriated.
For the overhead cost, he said N72 million, was released, representing 61.05 per cent of the N118 million appropriated.
On the 2021 budget estimates, Fashola said, N76 billion was proposed as capital, while N188 million was for overhead cost and N5 billion was for personnel cost.
Earlier in his opening remark, Chairman, of the Committee, Sen. Sam Egwu(PDP Ebonyi) said the committee expects the minister to provide detailed explanation on the performance of the 2020 budget and proposal for 2021.
Some members of the committee who spoke expressed concern over the huge amount of outstanding liabilities due to contractors in the sector.
They emphasised the need for the government to settle such liabilities given the importance of the sector to economic development of the country.