Presenting its final report to President Goodluck Jonathan at the Presidential Villa, Abuja on Thursday, the committee headed by Mr. Ibrahim Bunu, mentioned the Ajaokuta Steel complex which has been ongoing for 30 years as an instance of one of such abandoned projects.
It said, “There are many uncompleted projects where trillions of Naira has already been spent, and abandoned, prominent example of which is the 30- year- old multi-billion dollar Ajaokuta Steel company Project.”
According to the committee, “as at now, $4.5bn (about N675bn as at Thursday) which have been spent (on the steel complex) lie wasted.”
The committee therefore urged Jonathan to address the issue of the Ajaokuta Steel Project in line with his transformation agenda.
It stated in a summary of the report made available to journalists in Abuja that out of the N7.78tn spent on the projects, N2.696tn had been paid to contractors.
The PPAC was set up by President Goodluck Jonathan on March 4, 2010, and charged with the responsibility of assessing all ongoing Federal Government projects in the country.
The report noted that the actual number of ongoing projects could be 20 per cent higher than the reported 11,886.
It added that the total sum involved in their execution also surpassed the N7.78tn contained in the report of the committee headed by Mr. Ibrahim Bunu.
But the report did not give the exact number but it stated that the actual amount could be in the neighbourhood of N8tn.
According to the report, “the figures (11,886 ongoing projects being executed in the sum of N7.78tn) represent the total responses received from the ministries, departments and agencies (MDAs), some of whom for reasons best known to them, failed to respond to the committee’s request for data on ongoing projects.”
The committee noted that “corruption in the handling of projects by many self-seeking officers and contractors has led to massive inflation of costs and undermined the legitimacy of their monitoring and supervision responsibilities.”
Besides corruption, the committee identified “widespread institutional mediocrity”, inadequate budgetary allocation and high cost of financing among the ills plaguing the execution of capital projects in the country.
Part of the report reads, “Following the committee’s indepth assessment of many of the projects, we take no joy in confirming that there is indeed evidence of large scale, widespread institutional mediocrity, deficiency of vision and a lack of direction in project management, which result in poor conceptualisation, poor design and faulty execution.
“Needless to add that, this has resulted in avoidable losses of billions of Naira to the Federal Government.”
Highlighting the problem of inadequate budgetary allocation, the report noted that, “as a matter of routine, contracts are awarded without securing the required funds in the annual budget to ensure their timely execution.”
The report said, “Now, with N8tn commitment, and on the basis of the prevailing allocation of about N1tn for capital projects annually, it will take the next eight years or so for the Federal Government to complete existing ongoing projects, provided there will be no inflation within the period.”
In addition to corruption, the other factors, according to the report, include “consistent delays in payment to contractors leading to massive claims for overhead costs, interests and additional costs and poor coordination between government officials at all levels in the planning and execution of projects.”
Others are “ poor planning and conceptualisation of projects resulting in costly variations and inefficiency in the implementation and management of projects, and lack of adequate and efficient municipal services such as the provision of electricity, transport, security and water supply, all of which contractors have to arrange privately.”
The committee also reported that almost all ongoing projects were not subjected to and taken through the normal project cycle of conceptualisation, planning, the undertaking of full economic, social and environmental impact analyses, design and procurement, contract execution and on to maintenance.
Also, the report said that in most instances, the Bureau for Public Procurement Act was undermined and subverted at the Ministries, Departments and Agencies as evident in numerous cases where, after bids were received, it took between six months to two years or even five years, before a project was finally awarded.
The PAC added that on several occasions, ‘No Objection Certificates’ issued by the BPP were revoked without any justification.
It said, “There were also cases of disqualification of duly pre-qualified contractors in questionable circumstances, including the mutilation and substitution of bid documents, thereby rendering such bids non-responsive.
“On the other hand, in many other situations, contractors were allowed to draft contract agreements, which, not unexpectedly, they did in their favour against the interest of government.”
Suggesting remedies for the unsavory situation, the PPAC recommended, among others, “the need to streamline and downsize the ongoing projects to a manageable proportion through a well thought out realisation process.”
The committee also urged the government to prioritise and classify the ongoing projects into three.
The three, it said, should be, “Those to be completed immediately due to economic impact or nearing level of completion; non-commercially viable but socio-economically relevant projects that should be completed using low interest funds from appropriate international financial institutions; and those that are not commercially-viable, which “should be left to find their own level within the transformation agenda.”
As a way out of the problems, the PPAC recommended effective planning and coordination between government, contractors and consultants, crackdown on corruption, and enforcement of compliance with standards and specifications.
A statement from the Director of Information in the Office of the Special Adviser to the President on Media and Publicity, Mr. Musa Aduwak, said Jonathan expressed the concern after the Presidential Projects Assessment Committee presented its report.
“The huge number of on-going projects all over the country is of concern, considering the financial implications,” he said.
By Ihuoma Chiedozie, Abuja Courtesy Of: Punch
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