TUESDAY, 24 AUGUST 2010 00:00 FROM MARTINS OLOJA

 

Convinced at last that it cannot raise enough funds through the normal yearly budget to build critical infrastructure, especially roads and bridges, the Federal Government is set to raise a whopping N500 billion worth of bond, staggered up to 2015 to make impact in the transportation sector.

 

The Guardian learnt at the weekend that the administration which is desperate for a visible impact in the power sector is also persuaded that Nigeria may not become a big player unless the roads and bridges that the country’s area of 923, 768 sq kilometres are of global standard.

 

It was learnt that when the Federal Government is through with the deal to be perfected by the Debt Management Office (DMO), the fund will be efficiently used as a shortfall in the Federal Ministry of Works’ requirements for the completion and construction of critical roads and bridges infrastructure.

 

A top administration official who confided in The Guardian and one other newspaper at the weekend, said the deal was borne out of a recent strategic paper commissioned for impact in the transportation sector.Specifically, The Guardian obtained the policy support document entitiled: ‘Financing Nigeria’s Critical Infrastructure: A Road Map for Putting Domestic and Global Capital to Work.’

 

The Guardian confirmed that in the new deal, N120 billion has been proposed for the remaining of N2010, N159.64 billion for 2011, N118.36 billion for 2012 and N65.95 billion beyond N2013.

 

According to inquiries in the Presidency, the brains behind the new funding deal have listed six reasons why the Federal Government should opt for alternative funding formula for development of critical infrastructure. They are:

• Having a good road network is potential contribution to attaining the objectives of the Vision 20-20-20;

• there is urgent need to address the situation of the continued deterioration of the federal road network and front loading of projects;

• based on the current budgetary constraint, many of the critical economic routes are only partially funded or not at all;

• with the current funding rate, it will take an unacceptably long period of time before some of these construction and rehabilitation projects will be completed and therefore the nation will be deprived of the corresponding expected economic and social benefits;

• immediacy of the need to re-build our roads precludes our ability to await complete establishment in the short term of an enabling environment for Public Private Partnership (PPP); and

• federal roads and bridges listed for federal bond funding and the estimated costs per year from 2010 to 2012 are feasible.

 

It was learnt that the proposal followed a very detailed memorandum  presented to the president by the Minister of Works, Senator Sanusi Dagash recently.It was gathered at press time that because of the negative implication of failure of projects and the perception of government as a failure in the areas of critical infrastructure, the bond memo is receiving urgent attention and a definite announcement is expected very soon.

 

In order to achieve this specific objective, it was also learnt that the Federal Government will soon tinker with the structure of the Federal Road Maintenance Agency (FERMA) to “reduce bureaucracy in the affairs of road construction and maintenance”.It was not clear at press time how the lump sum will be raised shortly but it was said that the details would be worked out between the DMO and the banks.

 

Source:Guardian