Lagos-Calabar Road Project cost over N15trn –Umahi

Lagos-Calabar Road Project cost over N15trn –Umahi

.You lied on Project, it’s a Highway to fraud, waste, Atiku tells Minister

The Minister of Works, Engr Dave Umahi, has sisclosed that the Lagos-Calabar coastal road project will cost a tentative sum of N15.356 trillion and that the project will be completed in eight years.

The minister stated this when he featured on Channels Television’s Morning Brief programme on Thursday.

He said that the contractor handling the project, Gilbert Chagoury’s Hitech Construction Company Limited (Hitech) did not do any competitive bidding for the project, rather, the contract was awarded to the company based on its track record and not on sentiments as being insinuated in some quarters.

When asked to throw light on the cost of the project, how it was approved in line with the Public Procurement Act and if due process was followed, Umahi said, “I don’t understand what you mean by due process. Yes, due process was followed. People are concerned about whether it was appropriated for, and I say yes.

“In the 2024 Appropriation, you will find Lagos-Calabar coastal road and it is appropriated for. In appropriation and procurement, what is in the appropriation may not necessarily be what is in the procurement but the most important thing is that it is appropriated for and it followed due process.

“The due process is that we did our in-house evaluation of what we submitted. Some people said that this project is PPP (Public–private partnership), it is not PPP. It is EPC+F, which is Engineering, Procurement, Construction plus Finance. In EPC+F. There is a commitment in terms of funds from the Federal Government, depending on the negotiation.”

On the bidding process of the project as the contractor handling the project, Chagoury, has a close relationship with President Bola Tinubu, the minister said, “I am an engineer. I work by reality and not by sentiment.

“In the procurement act which is a law, you are allowed as a ministry to invite contractors that have special skills in a particular kind of work and negotiate with them and give out the job to them. We did that on the Third Mainland Bridge project.

“When it comes to the coastal road, we looked at the problem of ocean surge and the pedigree of the companies that have the capacity and track record of doing that, we looked at the Eco Atlantic in Lagos and remembered how Hitech was the only company that was able to solve the problem of flood that was taking of Victoria Island.

“They (Hitech) have the pedigree and track record of the ability to contain the ocean surge problems. They also have a proven track record of reinforced concrete road pavement.”

On the cost of the project, Umahi who earlier said that former Vice President Atiku Abubakar did not understand figures, noted, “If you use a dollar to N1,200, his argument comes up to about N19 billion per kilometre. A standard carriageway is 11.55 metres, which is 7.3 inner shoulder of 5.3, outer shoulder of 2.75. We used this 11.55 to do our analysis.”

When asked the exact amount the project will cost the Nigerian government under the EPC+F arrangement and the completion period of the project, the minister said, “We are looking at eight years, life tenure of Mr. President.”

He said tentatively, the cost of the project is about N15.356 trillion but added that “I cannot append my signature to that because it can come down and it can go up depending on the situation.

“It is going to be a tentative figure. I am proud of myself that this project is the most prudent project that I’m starting.”

The media had reported how the multi-billion firm awarded the construction of the Lagos-Calabar Coastal Highway, Hitech Road Construction Company, a subsidiary of Hitech Construction Company was owned by a Nigerian-Lebanese developer with alleged criminal records, Gilbert Chagoury.

Hitech is a division of the Chagoury Group, a business conglomerate owned by Chagoury, a known business partner of the Nigerian President, Tinubu.

Eko Atlantic in Lagos is also the brainchild of the businessman.

.You lied on Project, it’s a Highway to fraud, waste, Atiku tells Minister

However, the Presidential candidate of the Peoples Democratic Party (PDP) in the 2023 election, Atiku Abubakar, has described as wasteful and a highway to fraud the claim by Works Minister, Dave Umahi, that the 700km Lagos-Calabar Coastal Highway will tentatively cost N15.6 trillion.

 

Atiku also knocked Umahi for altering the initial plan of the project after Gilbert Chagoury’s Hitech had been awarded the contract without any competitive bidding.

 

He said, “Umahi had announced that the project would be fully funded by Hitech, and based on this, there was no competitive bidding. He (Umahi) then turned around to say that Hitech could only raise just 6% of the money for the pilot phase. This smacks of deceit.”

 

Umahi had during his media rounds at select TV stations on Thursday said the road project would cost N15.6 trillion ($13bn at exchange rate of N1,200/$1) while the rail which will pass through the road will be costed separately. The minister had also said the project would not be PPP, but the government would be providing 15%-30% counterpart financing.

 

Responding to Umahi’s revelation, Atiku said the tentative cost was the equivalent of the total budget of all 36 states of the federation combined.

 

He said, “The total budget of all 36 states of the federation for 2024 stands at about N14 trillion. If you add that of the FCT, the entire budget of all sub-nationals is N15.91 trillion. This is scandalous. Worse still, they have already awarded the contract but are still not sure of the level of the counterpart funding component of the federal government!

 

“Umahi had said in September 2023 that Gilbert Chagoury’s Hitech had the money to construct the highway and that it would be PPP. Hitech was to build, operate, and transfer it back to the Nigerian government after years of tolling.

 

“It was reported by every media organization, including those owned by Tinubu. It was on the basis of this proposal that Hitech was picked. Why did Umahi then turn around to claim that it was not to be a PPP but that the government would pay 15%-30%?”

 

The former Vice President noted that in the 2024 budget, the project was captured as the Lagos-Port Harcourt coastal highway and was put at a cost of N500m.

 

“Although the National Assembly approved N500m for the project this year, the Tinubu administration has released N1.06tn. That is more than 200 times what is in the Appropriation Act. This is what happens when the National Assembly fails in its duties,” he added.

 

Atiku said it was curious that the N15.91 trillion announced by Umahi did not include the cost of the railway component. He therefore wondered how much the project would cost if the railway component is included.

 

“If N15.6 trillion is for the road component alone, then the total cost could be far higher when the railway is included. We want to know the cost of the railway,” he said.

 

The PDP presidential candidate also lambasted Umahi for admitting that the project was given to Gilbert Chagoury’s Hitech construction company without a competitive bidding.

 

He asked Umahi to stop trying to deceive Nigerians with the claim that only Hitech was competent enough to do the project, wondering if it is the same that has been grappling with the execution of its projects in Lagos.

 

The former Vice President stated, “The essence of a competitive bidding is so that Nigerians can get the best value for money. It is so that you can compare prices and pick the company that can afford the project. It is wrong for him to have concluded that only Hitech could handle this project when such a project has been done by other reputable firms in the United States, China and South Africa.

 

“He claims he didn’t know there was a business relationship between Gilbert Chagoury and Tinubu, but this is another lie because Tinubu has publicly acknowledged this fact.”

 

Atiku also accused the works minister of attempting to deceive Nigerians as regards the appropriation for the project.

 

He called on members of the National Assembly to be alive to their responsibilities instead of acting like an annexe of the presidency.

 

The PDP candidate stated, “Until I exposed the dubious nature of this project, no member of the National Assembly thought it wise to investigate. The total cost was never made known until now. The fact that there was no bidding was never made known until I blew the whistle.”

 

The former Vice President also knocked Umahi for claiming that no money had been released yet to Hitech, which he described as another lie.

 

“On March 31, 2024, Umahi came on Channels Television’s Sunday Politics programme where he pointedly said that money that the sum of N1.06tn was released to Hitech. Only for him to say on TVC on April 11 that the same money had not been released. Which one is true, and which one is false?”