Why Lagos-Calabar road project not in 2025 budget – Umahi

The Minister of Works, David Umahi, has explained that the non-inclusion of the Lagos-Calabar Coastal Highway in the 2025 budget was an error, amid concerns by operators over the exclusion of the multi-billion naira project in the appropriation bill.

In a video clip on X (formerly Twitter), the minister said, “What you have in the budget was Lagos-Port Harcourt Highway, it is supposed to be Lagos-Calabar Highway, so we are interfacing with the committee chairman in this regard.”

However, in an interview with Saturday PUNCH earlier, the Managing Partner, KPT Associates Ltd, Dr Chukwuma Katchy, said the road project is an EPC + F project that does not need to be included in the budget.

He said, “It is an Engineering, Procurement, Construction, and Financing (EPC + F) project. The contractor is paid at the end of the project or the end of a phase. So it doesn’t have to be in the budget annually.”

In a similar vein, the treasurer of the Nigerian Society of Engineers, Victoria Island Branch, Babatunji Adegoke, said the omission of the Lagos-Calabar Highway project from the 2025 budget might be linked to the use of an EPC+F (Engineering, Procurement, Construction, and Finance) model for its execution.

He said, “In an EPC+F arrangement, the contractor undertakes the entire project scope, encompassing design, material acquisition, construction, and a portion or whole of the financial investment.

“The Minister of Works has announced that Phase 1 of the Highway will receive full funding from the Federal Government. This appears to diverge from the traditional EPC+F framework, where contractors usually contribute to project financing.

“Two plausible scenarios could explain this discrepancy: An alternative procurement model may be employed for Phase 1, with the government assuming the entire financial burden and the contractor solely responsible for engineering, procurement, and construction, and the government’s funding might constitute its ‘counterpart contribution’ within an overall EPC+F agreement for the entire Lagos-Calabar Highway.”

According to Adegoke, it implies that the government has already discharged its financial commitment for Phase 1, leaving the remaining funding responsibility to the contractor.

He added, “The absence of a clear articulation of the procurement and funding strategy for the project hinders a comprehensive understanding of its budgetary exclusion.”

“This lack of transparency can generate confusion among stakeholders.”

Also, the Managing Director of Fame Oyster & Co. Nigeria, Femi Oyedele, said the Lagos-Calabar Coastal Road project was not included in the 2025 budget because it is a Public-Private Partnership called Engineering, Procurement, Construction plus Finance.

He explained, “Under this project finance method, the development partner, Messrs Hi-Tech Construction African Limited will finance the road, construct, and finance the project.

“The development partner will recoup its funds through tolling of the road.”

Meanwhile, the Chief Executive Officer, Ace hiTeck Construction Co. Ltd, Adewunmi Okupe, said he believed the omission was deliberate.

He disclosed, “The project is supposed to be a Public Private Partnership, but the Federal government has unilaterally paid over N1trn for the first phase of the road without consulting the National Assembly.

“The project was later represented as EPC+F in October 2024. By that act, the normal bidding process was avoided so that the contractor could be handpicked for the project and the funds could be used anyhow. Including it in the current budget will open a new era of debates, so the FG is cleverly avoiding that.

“The government will still bring the issue of funding up later but it will still follow the same unilateral process, and this will go on until the project is completed. It is not likely that any private consortium will ever come into the project in reality. This is the project for the ‘boys’.”

It was earlier reported that the Federal Ministry of Works had a total capital allocation of N1,065,171,466,605 in the 2025 budget proposal.

However, it was highlighted that the Lagos-Calabar Coastal Road which is under construction was not included in the budget as further observed by BudgIT, a civic-tech organisation while raising fresh concerns over the 2025 budget.

In a statement released on its X handle, BudgIT highlighted, “This omission implies that if funding for this project materialises, it will likely necessitate reallocating funds from other critical projects, potentially hindering their implementation and impacting the budget’s credibility.”

According to the group, some of the projections in the budget were unrealistic, faulting the failure of the government to provide a breakdown of the budget of some ministries, departments, and agencies.