Nigeria: Akpabio Mounts Pressure for Release of N20 Billion for East-West Road

6 August 2020

The Ministry of Finance, Budget and National Planning has come under intense pressure by the Minister of Niger Delta Affairs, Senator Godswill Akpabio, to release to his ministry, the N20billion lifeline approved by President Muhammadu Buhari for the completion of the East-West Road, THISDAY learnt yesterday.

But finance ministry sources said the minister, Mrs. Zainab Ahmed, is insisting on due process and proper approvals before the fund could be released.

There have been concerns that the N20 billion might be misappropriated just like previous funds released to the Ministry of Niger Delta Affairs for the construction of the road as well as others that had been given to the Niger Delta Development Commission (NDDC), an agency under the ministry.

THISDAY had exclusively reported yesterday that Akpabio had been working round the clock to get his hands on the N20 billion working capital for the East-West Road whose completion has become open-ended, after costing the federal government some N433 billion since the Goodluck Jonathan administration.

To get the road completed once and for all, the Muhammadu Buhari administration had transferred the funding and project management to the Nigeria Sovereign Investment Authority (NSIA), also known as the Sovereign Wealth Fund (SWF), along with the Second River Niger Bridge, the Lagos Ibadan Expressway and the Abuja Kano Highway, at a reduced cost.

Accordingly, the NSIA and construction firm, Julius Berger PLC, had earmarked N100 billion for the completion of the East-West Road, of which N20 billion was allocated as counterpart fund by the federal government in the 2020 budget and was disbursed by the finance ministry to the NSIA. The balance of N80 billion was to be provided by the NSIA.

But Akpabio had insisted on the Ministry of Niger Delta Affairs executing the completion of the road and the entire N100 billion released to his ministry.

He was said to have gone as far as blackmailing the presidency to have the funds released to him on the grounds that the Niger Delta militants were protesting the process - in his usual tactic to get direct funding from the Buhari administration.

According to sources in the presidency, Akpabio and the management of NSIA have been at loggerheads since January this year over the refusal by the latter to release the N100 billion to the Niger Delta ministry and the conditions precedent that had to be met for the construction of the road.

The sources said the acrimony was so bad that Akpabio and the management of NSIA conversations often degenerated into shouting matches.

The terms stipulated by the NSIA, the sources informed THISDAY, were three-pronged and included the execution of a tripartite agreement, which the minister rebuffed. The first was the NSIA's refusal to assume the legacy debts of the East-West Road, which Akpabio wanted.

"There was no way that the NSIA can assume such legacy debts because it can erode the nation's investment in the SWF. These are debts that arose from accumulated interest and penalties owed previous contractors that had taken loans from commercial banks to execute portions of the East-West Road.

"The NSIA's preference was to ring-fence those debts so that they do not end up on its balance sheet, but Akpabio refused to accept that as a condition precedent," said one source in the presidency.

Another demand by the NSIA was over the commercial viability of the project.

The source explained: "As you know, all infrastructure projects taken on by the NSIA must be bankable because the NSIA is expected to make returns to its shareholders, comprising the federal government, the 36 states of the federation and the Federal Capital Territory (FCT).

"So the NSIA had insisted that the East-West Road must be tolled just like the Second River Niger Bridge, the Lagos-Ibadan Expressway and the Abuja-Kano Highway.

"Also, in order to recoup its investment, the NSIA had insisted that it would be responsible for appointing a tolling company to receive collections from the road. Again, Akpabio rejected this proposition from the NSIA."

A third condition was the establishment of a project monitoring team for the East-West Road to ensure that the funds are properly utilized for its completion and there are no cost overruns, explained the official in the presidency.

"Unfortunately, Akpabio rejected all three conditions given to him by the NSIA, which rendered their involvement impossible," he said.

The official went on to disclose that it was at this stage that Akpabio wrote to President Muhammadu Buhari and misinformed him that militants in the Niger Delta were protesting the involvement of the NSIA in the project.

Buhari, in turn, was said to have written a memo to the NSIA to explain why there had been a breakdown between itself and the Niger Delta ministry. It was only when the NSIA wrote back to the president that he became aware of Akpabio's antics to get the N100 billion transferred to his ministry.

After writing to the president, the NSIA took the further step of returning the N20 billion to the finance ministry and made it clear that it would have nothing to do with the East-West Road without a duly signed tripartite agreement that stipulates the terms under which the road will be completed and operated.

It is this same N20 billion that has been returned to the finance ministry that Akpabio has been pursuing with unconcealed fervor, even though he knows that the amount is insufficient to complete the road and has raised concerns that the money will be misappropriated like funds previously disbursed to his ministry and the NDDC.

THISDAY had reported that industry analysts had said the Ministry of Niger Delta does not have the technical capacity to deliver the project, warning that releasing the funds to Akpabio would be a waste, as what is required is the proper funding structure of the NSIA or the Federal Ministry of Works.

"In any case, releasing N20 billion only for a project requiring N100 billion will almost certainly see the waste of the funds in all sorts of consultancies or reviews of even another 'forensic audit'," said the source in the presidency.

The East-West Road project was first awarded in 2006 by the President Olusegun Obasanjo administration but was driven by the Presidents Yar'Adua/Jonathan administrations.

The project, a 657-kilometre dual carriageway, stretching from Calabar in Cross River State to Warri in Delta State, was, however, valued at N726 billion at the time and approved by the federal government at the height of agitations by youths in the Niger Delta.

In 2017, the Rivers State Government called on the federal government to declare a state of emergency on the failed portion of the road, especially, the Akpajo-Eleme axis, saying it had become a death trap and huge embarrassment to the country.

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