My country people let us wake up from our slumber and face reality. Sentiment should be buried ,so we can have a better Nigeria. Pls read through this......... IN Nigeria, A kilometre of road costs n1bn against world bank’s N238m benchmark – Investigation DECEMBER 6, 2014 BY DAYO OKETOLA AND GBENRO ADEOYE 5 Comments Lagos-Abeokuta Expressway The cost of constructing a kilometre of road in Nigeria appears to be the costliest in the world, according to Saturday PUNCH findings. A careful assessment of road projects in Nigeria showed that averagely a kilometre of road costs N1bn. Saturday PUNCH investigation revealed that road projects were also constantly being reviewed with government increasing the contract sums either biannually or once in five years. Investigations showed that even in Africa, the cost of constructing roads in Nigeria is far higher than what is spent on constructing roads in other nations on the continent. For instance, while the contract for the 127km Lagos-Ibadan Expressway was fixed at N167bn or $1bn, a contract for the 1,028km Lagos-Abidjan road project was estimated to cost between N167bn and N240bn by the Economic Community of West African Countries. The six-lane project is expected to connect five major cities in the region namely Lagos, Nigeria; Cotonou, Benin Republic; Lome, Togo; Accra, Ghana and Abidjan, Cote D’Ivoire. Though the number of kilometres to be covered under this road project is eight times higher than Nigeria’s Lagos-Ibadan Expressroad project, the cost per kilometre is far lower than that of Nigeria. During a meeting with development partners on the 1028km project, the Commissioner for Infrastructure, Economic Community of West African States Commission, Mr. Ebima Nijie, said that it would cost the union between $1bn and $2bn (N170bn and N240bn) to construct the road. At the projected maximum cost of N240bn, the cost of the road per km will be N234m. Whereas the six-lane Expressway road contract awarded by the Federal Government at N167bn cost N1.3bn per kilometre. In the Limpopo Province of South Africa, a kilometre of paved road costs N33m or $194,000, while the maintenance cost stands at N7.6m ($45,000). A report on Road Infrastructure Development in Nigeria (2009-2013), which compared the cost of building roads in Nigeria to that of some other African countries, found the cost of constructing road in Nigeria outrageous. The report, which was published by the Centre for Social Justice, said a kilometre of paved road in Nigeria “is being constructed for an outrageous amount ranging from N400m to over N1bn.” “This opens up our roads to the charge of being over-invoiced and unnecessarily expensive due to bottlenecks in the system,” the report explained. Using a 2000 World Bank Benchmark for Road Construction, which was adjusted to match inflationary rates up to 2013, the group compared two road projects in Nigeria and South Africa. The World Bank had arrived at a benchmark from information it got from 1995 to 1999 for 40 countries. Based on the benchmark, the inflation-adjusted range of construction work for paved road projects in Nigeria and South Africa in 2012 and 2013 should approximately fall between $163,000 (N27m) and $1.4m (N238m). But while the CSJ report put the average cost of constructing 1km of paved road in the Limpopo Province of South Africa at N33m, it noted that a 9.52km Ibadan-Oyo State Capital township road in Nigeria was awarded at a cost $35m (N5.8bn), which is approximately N609m ($3.7m) per kilometre. “The sum largely exceeds the upper bound of the estimated benchmark of about $1.4m per kilometre as derived from the World Bank,” the report noted. In 2006, the Lagos State Government signed a 30- year concession agreement with the Lekki Concession Company to finance, build, operate and maintain the Lekki-Epe Expressway for the stated period before it would revert to the government. The concession model can otherwise be called BOT- Build, Operate and Transfer. The agreement meant that the company would spend N50bn to rehabilitate and expand the existing 49.4km road originally constructed by the Lateef Jakande administration and expanded in 1987 by the Mike Akhigbe military administration to six lanes. Under the model, the company would be free to toll the road over a period of 30 years as stated in the contract agreement to recoup its investment before the road is transferred back to the government. At a cost of approximately N1bn ($5.9m) per km, the Lekki-Epe Expressway project also far overshoots the World Bank benchmark. In a similar fashion, the Oyo State government recently awarded the contract for the dualisation of some major roads in the state at the cost of N29.3bn. The projects include expansion and sectional repairs on roads with a combined length of 10.3km at the cost N7.9bn: 4km Ibadan-Oyo Expressway/Iseyin-Oyo junction to Owode. The government also said it would dualise 6.2km Ibadan –Oyo-Iseyin/Okeho junction road in Iseyin at a cost of N6.1bn. The dualisation of the 7.4km Dugbe-Magazine- Eleiyele to Aleshinloye-Onireke/Agbarigo Road in Ibadan was also awarded by the state government at the cost of N7.1bn. Also in Oyo State, a flyover bridge of N550m that was recently inaugurated in Ibadan, the state capital, along with improvements done on about 1.2km long service road, which included putting streetlights, cost the state about N3bn. The Lagos State government also spent N29bn to construct the Lekki-Ikoyi suspension bridge, which is about 1.4km. A 2013 report by Paul Collier et al for the Departments of Economics, Universities of Oxford and Gothenburg, compared the unit costs per km of asphalt overlays of between 40 to 59mm across various countries of the world. The report examined activities between 1996 and 1998 and between 2005 and 2007. Between 1996 and 1998, the unit cost per km of asphalt overlay in Nigeria was $95,100 (about N16m) while it was $42,900 (about N7m) in Ghana and $50,700 (N8,6m) in Mexico. Out of the 22 countries examined within the period, only three countries had a higher cost of asphalt overlay than Nigeria. While the costs of asphalt overlays in Paraguay, Bulgaria and India between 2005 and 2007 are $31,100 (about N5m), $40,700 (N6.9m) and $35,900 (N6.1m), respectively, the cost of such activities in Nigeria within the same period was $73,000 (N12.4m). The report explained that though building a road in more rugged terrain would likely involve higher unit costs of construction and maintenance, it also identified the role of corruption in having high unit costs of construction in many countries. Despite the high cost of constructing roads in Nigeria, the roads, according to Saturday PUNCH findings, are usually riddled with pot-holes soon after construction. Findings also revealed that on many occasions, contracts for roads were revieved upward. For instance, the 196km Abuja-Abaji-Lokoja Federal Road Project in Nigeria, which was estimated at an initial sum of N42bn ($326.5m) in 2006 rose up to N116bn ($731m) in 2011, an increase of over 170 per cent. With the increase, the cost of the project per kilometre was approximately N591m (approximately $3.7m), which also far exceeds the Wold Bank upper bound benchmark cost estimate recommended for constructing a kilometre of paved road. The project was being funded by the Subsidy Reinvestment and Empowerment Programme, which was set up to ensure the proper management of the funds that would accrue to the Federal Government from the partial removal of subsidy on petrol. Relying on a world bank assessment which compared contract procurement and implementation processes in the road sector across 13 countries in Sub-Saharan Africa including Nigeria, the CSJ report singled out Nigeria as the country with the highest cost overruns. The research examined cost overruns in the Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Malawi, Mauritania, Mozambique, Madagascar, Nigeria, Tanzania, Uganda and Zambia. It found Nigeria with the highest cost overruns, “where the contracts increased their original value by 39.7 per cent on the average during implementation.” The average cost overruns in Ghana were 34 per cent; about 18 per cent in Mozambique and Tanzania; and none in Ethiopia, Uganda and Kenya. So like the Abuja-Abaji-Lokoja Road project which was reviewed from N42bn to N116bn in the course of the construction, many Nigerian road projects fall into the same category, with high cost of overruns. For instance, the Ibadan-Ilorin Road Project was awarded in early 2000 to PW and Reynolds Construction Company in three phases. Ibadan to Oyo, a distance of 45km was awarded to PW at N15bn; Oyo-Ogbomoso, which is another distance of about 45km was jointly awarded to both companies at about N15bn also; while the last phase, Ogbomoso to Ilorin, which is also about 45km, was awarded to RCC at about N16bn. This brought the total cost of the contract to about N46bn. Two years later, the two construction companies asked for a 37 per cent variation for the middle section they were meant to handle together but government only agreed to a 15 per cent variation. When the Federal Government failed to reach a conclusion with the companies on the issue, it cancelled the contract. However, some months later, RCC got the contract for itself for N47.5bn, pushing the cost of the entire road project to about N78bn. Later, a British firm of quantity surveyors reportedly described the middle section of the road as being inflated by about N32bn (about $188m). Similarly, the dualisation of the 553km road from Kano to Maiduguri was awarded in 2006 at the cost of N172bn. But five years after, when the contract was meant to have been completed, it was re-awarded at a cost of N285bn. In May 2014, former Ogun State Governor, Gbenga Daniel, during the inauguration of the state’s Labour Party Secretariat, accused the current administration of Governor Ibikunle Amosun of subjecting the people of the state to hardship with his urban renewal programme. He alleged that the Abeokuta-Siun Road project, which had cost N1.9bn in 2006, was re-awarded by the current administration for expansion at a cost of N60bn. Daniel also said that the Ilishan-Ago Iwoye Road, which required N300m to complete along with its three bridges, by his administration, had also been re-awarded by Amosun for N11bn. He said, “During my eight-year tenure, we constructed a lot of roads. I constructed six lanes on Lalubu Road; we constructed drainage, walkways right and left and we commissioned them in 2008. “As I am speaking to you, there is no pothole on that road and it cost N100m per km. But this road from Ibara Roundabout to Onikokobo being built by this government gulped N800m per km. Even, some members of the state House of Assembly said government had increased the cost to N1.3bn per km. “Also, the pedestrian bridge at the new secretariat for workers, which I called Goodluck Jonathan bridge, is three times longer than the bridge this government constructed on Lalubu Road and it cost N50m, but I learnt that this government constructed a pedestrian bridge with air conditioner and it cost N260m.” Commenting on the issue The Collier report identified public work contracts, including roads, as subject to substantial levels of corruption. A civil engineer who was the past Chairman of the Nigeria Society of Engineers, Lagos Branch, Olatunde Jaiyesinmi, identified corruption as one of the factors contributing to the high cost of road projects in the country. Jaiyesinmi said too many actors are involved in the process of awarding government contracts in Nigeria. He said, “The contracts are usually overloaded in this country. So many interests are there and people who are not part of the construction work will take money here and there. So one cannot actually say that a road costs so much per km in Nigeria because there may be part of the cost that is not going into the construction of the road. “For example, in Nairobi, Kenya, there is a replica of the Murtala Mohammed International Airport, which is in Lagos. When they were constructed, the information that went around then was that the one in Nigeria cost twice as much as the one in Kenya. Kickbacks, contract loading and different political interests are some of the things responsible for the extraneous costs. “When you award a contract and there are so many interests, the interests take their share from the money and the remaining money may not be enough for the contractor to work and still make profit. “So what happens is that when a contractor gets a job of N100 and N30 is taken from it by the various interests, he is left with N70 to do the job. Since he wants to make his profit too, he will take N30 as profit. “Then he will use the N40 that is left to do the job. In such instances, nobody will say the contractor has not done the job well because the people that should be talking are the ones who have collected kickbacks. So they will not have the moral justification to say the road is bad.” The Vice Chairman of the Lagos Branch of the NSE, Oluwole Kolade, also said that government contracts are usually inflated to cater for some of the corrupt officials. He said, If it’s government work, the officials do inflate because they put their own (share) and in most cases, what gets to the contractor is not the figure that is quoted. If you’re talking about N1bn for a distance of one km, it may be like that. Everyone thinks that when there is a contract, it’s an opportunity for them to get their share of the national cake. It’s the Nigerian system.” However, both civil engineers identified other factors like design, the type of road being constructed and terrain as some other factors that determine the cost of road projects. “The design and type of road also determine the cost of construction. If a road is expected to be used by heavy trucks, the quality of the road must be high. If not, the road will collapse over time. The soil is also important. For instance, the cost of building a road in the Niger Delta or a riverine area will be more than the cost of building a road in Maiduguri, for instance, where the soil terrain is hard. All these factors will affect the cost of production.” Though construction experts identified difficult terrains as one of the reasons that could make a road project to be costlier than others, findings show that the terrains where the Nigerian roads highlighted in this report were built are no more different from what obtains in other parts of the world with similar climatic conditions. For instance, the CSJ said the costs of road project implementation in Nigeria should be benchmarked with other African and international prices. It said that taking into cognizance, “the cost of building roads in other countries like Ghana, which has nearly the same soil environment like Nigeria, with also a Volta Region which is swampy, will put extant costs in their proper context.” The report continued, “Existing laws and policies including those benchmarking the cost of road construction in Nigeria with other African countries reveals that Nigerian roads are the most expensive on the continent.” Copyright PUNCH. All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH. Contact: editor@punchng
Posted on: Sat, 06 Dec 2014 22:03:44 +0000
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