The Niger Delta Development Commission has perfected an enduring arrangement with multi-national firms and corporate organisations in the country on the execution of development projects in the oil producing areas to avoid cases of abandoned projects by contractors.
Chairman of the board of the commission, Senator Ewa Henshaw, stated this during the defence of the agency’s N322.6bn 2014 budget before the Senate Committee on the NDDC, in Abuja on Wednesday.
Henshaw lamented that over 4,000 uncompleted projects worth trillions of naira were currently scattered all over the nine mandate states of the agency.
He said the development informed the decision of the board and management of the intervention agency to partner with some reputable multi-national firms and established firms in the country for infrastructure development, health care delivery and power generation among others.
He also said that the partnership with the private firms to co-fund the uncompleted projects and the newly introduced ones, would leverage on the funds available to the commission, and ensure their timely completion.
He expressed confidence that the latest arrangement will solve 80 per cent of the problems bedevilling the activities of the commission in the area.
He also hinted that the agency planned to abolish the 15 per cent mobilisation fund for contractors stressing that the prsctice caused the series of abandoned projects in the area.
Under the new practice, Henshaw said projects awarded would be adequately funded and completed within 24 months.
Henshaw said, “We have decided to lay an agenda for NDDC that will enable us implement flagship legacy projects within the subregion. What this means is that we will tackle very important jobs and developmental projects in the areas of road, power, health sector and the environment.
“We recognise the difficulty that we confront with funding but we have been careful in trying to identify the sources of funding that will finance this year’s budget.
“In addition to that we have also decided to focus more on partnerships, partnerships that will help us augment funding for the development of the subregion.
“For example, on roads, we are looking at construction companies that will co-fund major projects with us so that we can leverage on what we have in terms of the available funds and then programme to ensure that this projects are completed in a timely and businesslike manner.
“We are also exploring partnerships that will facilitate power generation because we believe that if we are able to achieve substantial increase in the provision of power, then we believe that at least 50 per cent of the unemployment problem within the region will be solved.
“We are also looking for partnerships for intervention in the health sector that will directly affect the health care delivery system and the efficiency within that system.”
He drew the attention of the senate committee to a number of challenges that the agency was having in the current way that the budget was being prepared.
He said, “The first and perhaps most important is the issue of provision of 15 per cent in the budget. What I mean is that if you have a project, say N2bn project that can be completed within 12 or 24 months.
“The current practice is that only 15 per cent which is what is required for the advance payment is provided for in the budget. Usually what happens, is that the contractor will quickly go beyond 15 per cent value of work done within 12 months but there is no further provision in the budget to continue to pay for the work that he is doing.
“The result is delay and even abandonment because after the 15 per cent the contractor now has to wait for next year’s budget.”
Henshaw said the implication of that was that a project that can be completed within 12 to 24 months now begin to take up to seven years to complete because of the approach in funding that is incorporated in the budget.
He said, “So we need to change our approach from now, we will look at the total sum required for the completion and we will try to provide at least one-third to ensure that throughout the year beyond the 15 per cent mobilization the contractor can continue to work and he can continue get paid.”
Henshaw added that funds would henceforth be diverted from low performing contractors to pay those who were fast in the execution of their contracts.
Chairman of Committee, Senator James Manager, raised the alarm that Nigeria was currently enjoying fragile peace in the Niger Delta region and noted that the rapid development of the area remained the best way to avoid future crisis there.
He said, “If the Niger Delta region is happy, Nigeria is happy. If the Niger Delta region is unhappy Nigeria will be unhappy. You know the reasons why.
“I believe that every other part of Nigeria, it there is a problem, Nigeria will be in trouble. But this one is a very special one.”