Federal Gov’t To Settle N1.5trn Debt Owed Highway Contractors — Umahi

The Federal Government has announced its intention to pay off the N1.5 trillion debt owed to contractors responsible for constructing federal highways nationwide.

The Minister of Works, Sen. David Umahi, made this announcement during a meeting with the contractors in Abuja on Thursday.

Umahi, who provided insight into the government’s plans to clear the debts, said that a verification committee had been established to screen contractors’ certificates and recommend payments.

The minister also stressed the importance of contractors being serious in executing government projects.

Umahi assured the contractors that every verification with merit would be paid and mentioned the implementation of an automated payment system.

He urged contractors to provide proof of how the debts were generated, noting that payments would be on a first-come, first-served basis.

He said, “You are requested to come up with proof of how these debts are generated.

“The earlier you do it the better, the economic team and Federal Executive Council will expect us to give them facts; I assure you that every verification that has merit will be paid but it shall be on a first come, first served basis.
Umahi frowned at contractors closing up sites during the festive season when the traffic on the roads were high.”

The Minister expressed displeasure at contractors closing construction sites during the festive season, especially considering the high traffic on the roads. He warned that such behavior would no longer be tolerated, stressing the need for contractors to be serious and committed.

He added, “We are almost in the middle of January, most of you closed sites on Dec. 15, to reopen on the 15th of January, losing a most valuable one month that would not be allowed to happen again.

“That is not good, we have to agree, if you have to take off, you can take one week but to close site at the critical time of the season to observe festivities will not be allowed anymore.
“Going forward, we are going to track our projects. On our part we are addressing late payments; we mean business in 2024 and we want to work with contractors that are serious.”

Umahi revealed that the government planned to complete 150 kilometers of roads in each of the 36 states and the Federal Capital Territory (FCT). He specified that this target excluded palliative work and special projects, such as those funded by SUKUK, Presidential special funds, or the Tax Credit Scheme. The minister noted the government’s commitment to addressing late payments and urged contractors to return to work promptly.

The Minister warned that contracts for the Lokoja-Benin road might be terminated if contractors did not return to the site. He outlined the government’s target of completing a 5,550-kilometer road network and emphasized the need for serious contractors to achieve this goal. Umahi stated that only registered and certified Council for the Regulation of Engineering in Nigeria (COREN) members were allowed on sites.

Umahi noted the division of projects into 12 zones to remove bottlenecks delaying road construction, and he shared that the president had directed a review of the Federal Roads Maintenance Agency (FERMA) to enhance effectiveness. He encouraged controllers to clear highways of traders and emphasized that roads were not meant for such activities.

The Minister disclosed the government’s plans to introduce solar lights and hire retired police and military personnel to secure roads, aiming to make highways safe and reintroduce night travels.

He clarified that while asphalt was not banned, the government sought to moderate its escalating prices. Umahi also announced that the Bureau of Public Procurement (BPP) had approved 80% of palliative allocation and warned against obtaining unauthorized documents through illegal means.

The News Agency of Nigeria (NAN) reported that Umahi had earlier announced the Federal Government’s decision to stop using asphalt in road construction, which faced resistance from contractors, leading to delays in completing several roads, including the Benin-Warri dual carriageway.

NAN