ENUGU, Nigeria (VOICE OF NAIJA) – The House of Representatives has resolved to launch an investigation into the procurement process of the Lagos-Calabar coastal highway.
The House has also called on the Ministers of Works, Finance, and the Attorney General of the Federation and Minister of Justice to ensure that all guarantees and credit enhancement instruments related to the Lagos-Calabar Coastal Road Project are presented to the National Assembly for approval.
Additionally, the House has mandated its committees on Procurement and Works to thoroughly investigate the procurement process of the contract for the Lagos-Calabar Coastal Highway.
The motion, titled “Urgent Need to Investigate the Procurement Process and Award of Contract for the Lagos-Calabar Coastal Highway,” was presented by Hon Austin Achado (APC-Benue), during plenary in Abuja.
Achado while moving the motion noted that the contract’s award did not follow due process and lacked approval from the National Assembly, necessitating a comprehensive investigation into the procurement process.
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He said the Federal Ministry of Works has executed an Engineering Procurement Construction and Finance (EPC+F) contract in favor of Hitech Construction Company Nigeria Limited for the 700km Lagos to Calabar Coastal Road and Rail Project. The estimated cost stands at N4.329 billion Naira per kilometer, employing reinforced concrete technology for a carriage width of 59.7 meters, including 10 lanes, shoulders, rail, service ducts, street lights, drainages, and shore protection.
Furthermore, Achado noted that the laudable project with the prospect of providing easy access for movement of goods and services across the nation, has a financing structure, as announced by the Hon Minister of Works.
This requires the Federal Government of Nigeria to provide 15°o to 30°o co-financing, while the private sector counterpart will 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.
Concerns were raised by the lawmakers regarding the procurement strategy’s compliance with the Public Procurement Act 2007, particularly Section 40(2), which mandates open competitive bidding.
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 2005, 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.
He therefore, highlighted violations of the Infrastructure Concession and Regulatory Commission Act 2005, emphasizing the necessity for transparency in the bidding process.
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Moreover, the absence of disclosure regarding the private partner’s financing sources, structure, and competitiveness was deemed problematic, potentially creating contingent liabilities for the Nigerian Government.
The House expressed further distress over the project’s contingent liabilities, which contravene the Debt Management Office (Establishment) Act of 2023, stipulating the need for National Assembly approval for external loan guarantees.
The House has instructed its committees to furnish a report within four weeks.
He said, “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.