May 10, (THEWILL) – The House of Representatives has directed its appropriate Committee to investigate the procurement process of the multi-billion Lagos-Calabar coastal highway project initiated by the President Bola Tinubu-led administration.
This followed the adoption of a motion of urgent national importance moved by Austin Achado at a plenary session on Thursday.
The House directed the Minister of Works, Minister of Finance, the Attorney-General of the Federation and Minister of Justice, to ensure that all guarantees and credit enhancement instruments for the Project were sent to the National Assembly for approval.
In addition, the House of Reps mandated committees on procurement and works, to investigate the procurement process of the contract for the project.
THEWILL recalls several concerns raised by former Vice President, Atiku Abubakar, over the procurement process of the Coastal Highway Project. The 2023 Presidential candidate of the Peoples Democratic Party (PDP) had alleged, among others, that the award of the contract did not follow due process.
While moving the motion titled “Urgent Need to Investigate the Procurement Process and Award of Contract for the Lagos-Calabar Coastal Highway”, Achado noted that the award of contract did not follow due process and that it also did not get the approval of the National Assembly, hence the need to thoroughly investigate the procurement process of the contract.
He pointed out that the Federal Ministry of Works has executed an Engineering Procurement Construction and Finance (EPC+F) contract, in favour of Hitech Construction Company Nigeria Limited, for the delivery of the 700km Lagos to Calabar Coastal Road and Rail Project estimated at a rate of N4.329 billion per kilometre, using reinforced concrete technology for a carriage width of 59.7metres, to include 10 lanes, shoulders and rail with additional designs of service ducts, street lights, drainages and shore protection.
According to the lawmaker, the laudable project with the prospect of providing easy access to the movement of goods and services across the nation, had a financing structure, as announced by the Minister of Works, which required the Federal Government to provide 15 percent to 30 percent co-financing, while the private sector counterpart would provide the balance, and to toll the road when completed for a minimum period of 15 years, to ensure full recovery of all debts and equity applied for the delivery of the project.
Achado, however, expressed concerns ”that the procurement strategy may have violated the Public Procurement Act 2007, section 40(2) which requires that where a procuring authority adopts to use restrictive tendering approach, it should be on the basis that the said goods and services are available only from a limited number of suppliers and contractors and as such, tenders shall be invited from all such contractors who can provide such goods and services.”
According to him, “The procurement strategy adopted by the Federal Ministry of Works for the award of the contract violates the Infrastructure Concession and Regulatory Commission Act 2905, as Section 4 of the Act outlines that all approved Infrastructure projects and contracts for financing, construction and maintenance must be advertised for open competitive public bid, in at least three national dailies and Section 5 of the Act further clarifies that any direct negotiations with only one contractor could be allowed, only after exhausting the provisions of section 4.
“The Federal Ministry of Works in promoting the project has provided a rate per kilometre for the planned works but has not provided the private partner’s financing sources, structure and competitiveness, as this is likely to create contingent liabilities to the Nigerian government.
“Disturbed that the contingent liabilities accruing to the Federal Government of Nigeria on this project violate the Debt Management Office (Establishment) Act of 2023, as Section 22(3) states that the minister shall not guarantee an external loan unless the terms and conditions of the loan shall have been laid before the National Assembly and approved by its resolution.
“The guarantees issued to cover the debt financing component of this project do not have the approval of the National Assembly.”
When put into voice vote by the Speaker, Tajudeen Abbas, the motion was unanimously supported by members and was referred to the appropriate House committees for proper legislative action.
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