Ladies and Gentlemen, Our memories will recall that on 11th November 2015, Mr. President Muhammadu Buhari GCFR, concluded the process of constituting his cabinet by administering the oath of office on ministers.
I was assigned to consolidate a newly merged ministry of Power Works and Housing, shortly after which I briefed members of the public and the press about our plans, in my maiden press briefing tagged "Setting The Agenda."
While some of the assumptions may have altered somewhat about the timing of the budget, a budget was eventually signed into law on Friday 6th May 2016 (6 months ago) and we have set about implementing the budget of N260.082B with releases of N70B made in June (for Quarter I) and N60B made in October (for Quarter II).
It is now exactly a year since we were sworn into office, and I believe it is an appropriate time to acquaint you with our progress of work.
Because 3 (THREE) ministries are involved, I will dwell on summaries in order to manage time, but from time to time I will highlight some details whenever they are necessary to explain a point and to reinforce our commitment to remain accountable to you, our employers.
This ministry as we all know is responsible for civil Works especially the construction of roads, bridges, buildings and other similar civil engineering undertakings.
As I mentioned during my briefing on the agenda setting, we had inherited about 206 road projects already contracted out; with outstanding completion costs in the region of N1.5 Trillion.
Although the works ministry share of the 2016 appropriation was N260 Billion, which was a lot more than the 2015 budget of only N18 Billion that the last administration left, it is a drop in the ocean against the liabilities that were outstanding to contractors.
Our interactions with contractors showed that many of them had not been paid for an average of 2 to 3 years before we resumed, and this explained the stoppage of works, by the contractors, the layoff of workers, and consequently poor condition of many roads.
With limited resources against liabilities, with debts already owed, we had to make difficult choices of deciding which of the 206 roads under contract we should start with, and how many.
Our choices were informed by the realities of our economy and the size of our resources,
We resolved that all roads are economic roads but that some were more urgent and more impactful than others.
So our choices were determined by roads that carried the heaviest cargo, to allow farmers, businessman, industries and travelers move their goods and themselves across the country in order to drive productive activity.
Secondly, we chose roads that support our energy sufficiency and put our resources in roads leading to and from petroleum tank farms so that we can move petro, diesel and kerosene across Nigeria.
We also chose roads that led to and from our major sea and airports so that maritime business can go on, to drive the economy.
Therefore, we re-mobilized contractors back to work on roads across the 6 (SIX) Geo-Political zones, with the list provided in Annexure I to this brief which I will leave with you.
Some important roads in this category are:
- The Port Harcourt- Aba Road, where mobilization was delayed until Monday 31st October because of rains, and the difficulty of establishing a works yard.
- Sokoto – Tambuwal - Makera-Kontagara Road where work is going on, - (Sokoto-Kebbi-Niger States)
- Ilorin-Jebba Road, - (Kwara State)
- Loko-Oweto Bridge, - ( Nasarawa/Benue States)
- Shagamu- Ibadan , - (Oyo-Ogun State)
- Shagamu – Lagos, - (Lagos-Ogun State)
- Ogbomosho-Oko-Ilogbo-Osogbo , -(Oyo-Osun State)
- Funtua-Katsina , -(Katsina State)
- Wukari-Akwana , - (Taraba State)
- Abriba –Arochukwu – Ohafia , - (Abia State)
- Abuja – Lokoja – Airport , - (FCT/ Kogi State)
- Oji-Achi-Obeagu-Mmaku-Awgu-Ndeaboh-Mpu-Okpanku , -(Enugu State)
- Ajase Ipo – Offa – Erinle – Osun State Boundary , - (Kwara State)
- Ikot Ekpene Border- Aba – Owerri Dualisation , - (Akwa Ibom/Abia and Imo States)
We also paid consultants who are supervising these roads and had been denied payment for 2 to 3 years. This has helped to recover lost jobs, and put some money back in circulation, as part of a government strategy to build out of this recession.
As I said during our first briefing, our short-term objectives are to complete uncompleted road contracts, restore motorability back to as many roads as possible, improve journey times and reduce the cost of travel for commuters.
This has clearly started on the roads I have spoken about; and the results will accrue as progress on the works improve over time and the roads are completed.
In the medium to long term, we intend to cover more roads as our resources permit, and increase our maintenance capacity of road assets to ensure that we do not neglect our highways again in the manner we have done over the years to our collective detriment.
The first step to maintenance is to restore the authority of all the states controllers of works, to charge them to take responsibility for all federal roads within their states posting, and to bring up an annual budget that will be submitted to Parliament.
This will help us decentralize authority over road maintenance, vest responsibility on the people who are on ground and closer to the Roads so that they can resurface damaged roads, clear over-grown vegetation, enforce axle-load compliance, install signs and lane marking and gradually restore our highways back to contemporary quality.
2017 AND BEYOND – WORKS
Going forward in 2017, we have developed proposals for the budget to intervene in critical roads in the 6 (SIX) Geo-political zones that lead to and from major food producing states based on information supplied by the Ministry of Agriculture.
We plan to do the same for states that produce minerals from mining activity, and for states where we have strategic fuel depots.
For decades, we have paid almost no attention to bridges built across the country as though they are indestructible.
We are beginning to see erosion, stress, and in some cases failures and near collapse in Kano (Tamburawa), Lagos (Ijora), Kogi (Lokoja) Ogun (Long bridge on Lagos-Ibadan) Kaduna (Jaji) and other places.
Although we have started some work in a few places, we have only about N2 Billion to work in the 2016 budget.
We have nonetheless developed a 3 (THREE) year plan to cover 42 (Forty-Two) bridges that will require about N277 Billion authorization by Parliament over the period.
I must also point out that we received representation from parliamentarians about roads in their constituencies and from the monthly FRSC reports all of which have been factored into our next three-year plan.
How far we go, how much we get and how much we can do, now depends on how much money the country can get, and how much she gets approval to spend.
Following the privatization in 2013, the ministry is now largely a policymaker, and regulator through NERC [Nigerian electricity regulatory commission] and is now only directly responsible for expansion and maintenance of the transmission line through (TCN) and completion of projects started before the privatization which were uncompleted and about which I will share a few details.
The story in power is not different from that of works in terms of uncompleted projects in transmission.
As I said in my meeting briefly, we inherited over 100 transmission projects for which contractors were not paid for about three years.
This not only resulted in stoppage of work, laying off of workers, but left projects uncompleted.
But it also resulted in contractors abandoning over 800 containers, which contained transformers, switches, panels and other equipment needed as materials to complete transmission projects because they could not pay for them.
To compound the situation there was no provision in the budget of 2015 to pay them as only N5 Billion was budgeted for the Ministry of Power.
All this has changed. The ministry has N24 Billion for 2016 and has started paying contractors and getting the necessary approvals for them to return to work.
Examples of these are in Sokoto, Maiduguri, Okada, Alagbon, Damboa, Nasarawa, Gurara, Osogbo, Kashimbilla, Kumbotso, Ikot Ikpene to mention a few.
This puts a lie to the narrative that the transmission grid is static at 5000 MW and is not expanding because these projects add to the capacity.
Furthermore, with the budget we have started paying the shipping companies and warehouse owners who kept custody of the containers, and the report I received last week indicates that a first batch of about 400 containers will be released to contractors to go out and do their work.
In addition to transmission, we are working to complete uncompleted power generation projects to deliver on the incremental power program of our roadmap of incremental, steady and uninterrupted power.
Some of the projects that should start coming to conclusion in 2017 are the 215 MW Kaduna Power, 40 MW Kashimbilla Power (Hydro), 40 MW Gurara I Power (Hydro), 29 MW Dadin Kowa Power (Hydro), 10 MW Katsina Power (Wind) 1,125 MW (14 Solar projects) and the 240 MW Emergency Power Project for Afam (Gas).
We are working with the generation companies to increase their power generation capacity through repairs and maintenance.
Egbin has restored all its turbines even though it has suffered a gas outage as a result of vandalization.
Kainji, Jebba and Shiroro have increased the number of functional turbines, so they are producing 300 MW extra power during this year's rainy season, more than they did last year.
As at 5 November 2016, reports reaching me from the control center showed a peak generation of 4010 MW, and this is without the 3000 MW lost to gas pipe vandalization.
I am aware that efforts are in progress to repair and restore the damaged gas pipelines, and also to fast-track emergency gas supply.
Government has also recently provided a guarantee to ensure supply of gas to Calabar power plant, which has power and transmission, but no gas to operate efficiently.
On the distribution side, we continue to work with the DisCos to improve their customer service and in particular meters supply.
As you heard on a recent TV program hosted by Channels TV called 'The Crux' some of the local meter manufacturing companies attest now to improvement in orders to supply of meters.
As you will have also seen, I have been involved in meter distribution flag offs in Kano, Benin and Sokoto.
All told, while there is still work to do, and there is the big problem of liquidity to overcome, the promise ahead looks good, the plans are clear and our resolve to implement is unwavering.
2017 AND BEYOND - POWER
Going forward we intend to roll out our Rural Electrification Implementation program which Mr. President has now approved as required by the law.
Our objective is to improve access to power for rural communities.
You will have heard of our education intervention project, which is indeed a rural electrification implementation project.
We are using universities as one of the anchors because they are in rural areas and they represent a quick way to penetrate the rural areas and also expand to villages and towns in rural areas, close to the Universities.
We are starting with 37 federal universities, seven teaching hospitals, to which we plan to deploy 37 independent power plants of nine gas plants, and 28 solar plants to guarantee a cumulative 120 MW, to replace 1,105 generators that are producing a wasteful 210 MW.
We have done the audits and planning of all the schools and if we get financing authorization we can implement, to provide access to power to our people in the rural areas.
The second anchor of our Rural intervention is the use of small Hydro dams; that are in the rural areas to support agriculture and Agro processing by providing power.
The approval for the first 6 (SIX) is pending for consideration by the Federal Executive Council.
All of these sources of power, with embedded power from Paras Energy 40 MW gas in Lagos, the expected completion of Azura power in Edo, expected gas supply to Ihorbor Gas power plant, Gegeru power, Olorunsogo, Omotosho, Gbarain and others make me hopeful that we can get incremental power.
How well we do with making the incremental power steady and ultimately uninterrupted will depend on how we as a people resolve issues like vandalization, electricity theft, electricity conservation, invocation of court powers in utility regulation and of course strikes.
We have not yet started constructing houses. But tenders have been considered and over 500 contracts are now ready to be issued for work to start in earnest.
However, we have received land from 27 (TWENTY-SEVEN) states as at 24th October and more are still responding.
We have completed simple designs of one, two and three-bedroom bungalows for the northern states to respond to the cultural, climatic and land use peculiarities.
We have completed simple designs of one, two and three bedroom blocks of Flats for Southern states also in response to similar peculiarities.
We have identified inputs like doors, windows, tiles, paint, roofing materials that can be made locally and we have resolved to use only made in Nigeria inputs unless there is no local production capacity.
We have done some inventory of quantities of materials needed in order to provide investment information for local manufacturers to position to respond and supply in order to create employment and get factories back to work.
i) 22,288 - Doors
ii) 27,849 - Windows
iii) 3,502 - Water cisterns
iv) 3,502 Wash hand basins
v) 2,830 - Kitchen Sinks
vi) 261,299 - Sq. Meters of floor tiles
vii) 178, 680 - Sq. meters of wall tiles
viii) 561,119 litres of paint
ix) 342,960 Sq. Meters of roofing material
B) Skilled Labour
413,000 Man days
C) Unskilled Labour
440,000 - Man Days
While our planning and research continues, the above is at least indicative of the kind of attention and dedication we are demanding of our staff and the response we are getting.
2017 AND BEYOND - HOUSING
Going forward in 2017, we plan to build more houses first to stimulate jobs.
Thereafter, we plan to assess the affordability and the acceptability of our designs.
Thereafter, we plan to industrialize the production of the most affordable and acceptable designs.
We will then increase supply using private sector as developers while government will then concentrate on strengthening institutions like the Federal Mortgage Bank to deliver on its core mandate of providing mortgages to working class people to own their homes.
It is my belief that if we can achieve this, the size of our housing deficit will not appear that daunting again, because it will be a system that can respond every year, instead of once in a while, to repeat housing construction, delivery and acquisition.
How much we can then deliver will be defined by the size of our resources and our ambition, and not by the absence of a workable plan.
Ladies and gentlemen, I am done. I thank you for listening.
Babatunde Raji Fashola, SAN
Honourable Minister of Power, Works and Housing