The House of Representatives on Thursday, May 9, asked the Minister of Finance and the Attorney-General of the Federation and Minister of Justice to furnish the National Assembly all guarantees and credit enhancement instruments for the Lagos-Calabar Coastal Road Project for approval.
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The House also resolved to investigate the procurement and award process of the multi billion Lagos to Calabar coastal highway.
In a resolution following a motion of urgent public importance by Hon. Austin Achado (APC, Benue), the House also asked the Ministry of Works to furnish the National Assembly with details of the procurement processes leading to the award of the contract
There have been series of controversies surrounding the award of the contract to Hitech construction for the over 700 kilometers road whose construction is expected tobe completed in five years.
Achado informed the House that the procurement process did not follow due process, adding that funding for the project was also not approved by the National Assembly.
Achado said the Federal Ministry of Works has executed an engineering procurement construction and finance 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 Naira per kilometer, 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.
He said this 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 Minister of Works, which requires the federal government to provide 15 to 30 percent 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.
He expressed concern that the Procurement Strategy used in the award of three contract may have violated the Public Procurement Act 2007, section 40(2).
The section he said 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 Achado, 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.
He said 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 while 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 said further that in promoting the project has provided a rate per kilometer for the planned works, the Federal Ministry of Works has not provided the private partner’s financing sources, structure and competitiveness, as this is likely to create contingent liabilities to the Nigerian Government
He said further that the Contingent Liabilities accruing to the Federal Government of Nigeria on the project violate section 22(3) of the Debt Management Office (Establishment) Act of 2023 which 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 Benue lawmaker alleged that the guarantees issued to cover the debt financing component of the project do not have the approval of this National Assembly.
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