No personal interest in N15trn coastal highway project – Umahi

The Minister of Works, Dave Umahi, has said that contrary to insinuations in some quarters, there is no personal interest in the Lagos-Calabar Coastal Highway project, which has remained a subject of controversy of recent.

Speaking when he appeared on some television stations yesterday, Umahi said that the project will cost a tentative sum of N15.356 trillion, and is expected to be completed in eight years. 

He also said the contract was awarded on a counterpart-funding basis and not on a public-private partnership as widely claimed. 

Umahi and former Vice President Atiku Abubakar, candidate of the Peoples Democratic Party (PDP) in the 2023 presidential election, have been attacking each other over the Lagos-Calabar project, including its propriety at this time, cost, as well as the purported relationship between the contractors, Gilbert Chagoury’s Hitech with President Bola Tinubu. 

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Atiku in another statement issued yesterday, hours after Umahi had spoken on some of the television platforms, insisted that due process was not followed in the award of the multi-trillion naira project, which he described as “a highway to fraud.” 

Umahi during his appearance on Channels TV’s “Morning Brief” yesterday, simply said “I’m not aware of that”, when asked to explain the alleged connection between the contractor, Hitech, the Chagoury Group and President Tinubu. 

When prodded further during another appearance on Arise News’ “Morning Show”, the works minister said, “I won’t have much to say because you can’t place something on nothing.” 

According to him, “When you said that the project is about personal interest, there is a contradiction there because the former Vice President Atiku Abubakar said that the Jonathan administration wanted to do that project and put a cost at about $12 billion. So, whose interest was that administration promoting and wanting to do the project?” Umahi asked. 

“And then, you now come again and said that the Buhari administration renegotiated on I think $11.1 billion; whose interest was the administration promoting? I think they wanted to do that project; I think he may be right in saying that there is a difference between the Federal Ministry of Works and the NDDC (Niger Delta Development Commission). But it is all the federal government’s project. So, there is actually a design from the NDDC but I can’t confirm the costing. But I want to take its cost to run figures. I am here to run figures. That is about that issue of personal interest,” he said. 

It did not meet due process – Atiku 

In his latest statement, the third in a series on the coastal highway project, which was issued yesterday, Atiku described the 700km Lagos-Calabar Coastal Highway as “wasteful”, and “a highway to fraud”.

In the statement signed by his spokesman, Paul Ibe, the former vice president said, “Umahi had announced that the project would be fully funded by Hitech, and based on this, there was no competitive bidding. He (Umahi) then turned around to say that Hitech could only raise just 6% of the money for the pilot phase. This smacks of deceit. 

“Umahi had during his media rounds at select TV stations on Thursday (yesterday) said the road project would cost N15.6 trillion ($13bn at exchange rate of N1,200/$1) while the rail, which will pass through the road will be costed separately. The minister had also said the project would not be PPP, but the government would be providing 15%-30% counterpart financing”, the statement observed. 

Atiku said the tentative cost was the equivalent of the total budgets of all 36 states of the federation combined. 

He said, “The total budget of all 36 states of the federation for 2024 stands at about N14 trillion. If you add that of the FCT, the entire budget of all sub-nationals is N15.91 trillion. This is scandalous. Worse still, they have already awarded the contract but are still not sure of the level of the counterpart funding component of the federal government! 

“Umahi had said in September 2023, said that Gilbert Chagoury’s Hitech had the money to construct the highway and that it would be PPP. Hitech was to build, operate, and transfer it back to the Nigerian government after years of tolling. 

“It was reported by every media organisation, including those owned by Tinubu. It was on the basis of this proposal that Hitech was picked. Why did Umahi then turn around to claim that it was not to be a PPP but that the government would pay 15%-30%?”, he asked.

The former vice president said that in the 2024 budget, the project was captured as the Lagos-Port Harcourt Coastal Highway and was put at a cost of N500m. 

“Although the National Assembly approved N500m for the project this year, the Tinubu administration has released N1.06tn. That is more than 200 times what is in the Appropriation Act. This is what happens when the National Assembly fails in its duties”, the former VP decried. 

Atiku said it was curious that the N15.91 trillion announced by Umahi did not include the cost of the railway component. He therefore wondered how much the project would cost if the railway component is included. 

“If N15.6 trillion is for the road component alone, then the total cost could be far higher when the railway is included. We want to know the cost of the railway,” he said. 

Atiku also tackled Umahi for admitting that the project was given to Gilbert Chagoury’s Hitech construction company without a competitive bidding. 

“The essence of a competitive bidding is so that Nigerians can get the best value for money. It is so that you can compare prices and pick the company that can afford the project. 

It is wrong for him to have concluded that only Hitech could handle this project when such a project has been done by other reputable firms in the United States, China and South Africa. 

“He claims he didn’t know there was a business relationship between Gilbert Chagoury and Tinubu, but this is another lie because Tinubu has publicly acknowledged this fact,” the statement alleged. 

Our correspondents report that during his earlier appearance on Channels TV yesterday, Umahi said, “I don’t understand what you mean by due process. Yes, due process was followed. People are concerned about whether it was appropriated for, and I say yes. 

“In the 2024 Appropriation, you will find Lagos-Calabar coastal road and it is appropriated for. In appropriation and procurement, what is in the appropriation may not necessarily be what is in the procurement but the most important thing is that it is appropriated for and it followed due process. 

“The due process is that we did our in-house evaluation of what we submitted. Some people said that this project is PPP (Public–private partnership), it is not PPP. It is EPC+F, which is Engineering, Procurement, Construction plus Finance. In EPC+F. There is a commitment in terms of funds from the federal government, depending on the negotiation”, the minister said. 

On the bidding process of the project, he said, “I am an engineer. I work by reality and not by sentiments.

“In the Procurement Act, which is a law, you are allowed as a ministry to invite contractors that have special skills in a particular kind of work and negotiate with them and give out the job to them. We did that on the Third Mainland Bridge project.

“When it comes to the coastal road, we looked at the problem of ocean surge and the pedigree of the companies that have the capacity and track record of doing that, we looked at the Eco Atlantic in Lagos and remembered how Hitech was the only company that was able to solve the problem of flood that was taking off Victoria Island.

“They (Hitech) have the pedigree and track record of the ability to contain the ocean surge problems. 

They also have a proven track record of reinforced concrete road pavement”, he said.