From: IHEANCHO NWOSU, Abuja
Chairman of the House of Representatives Committee on Inter and Intra-party affairs, Honourable Fort Dike, in this interview rules out a hasty treatment of Petroleum Industry Bill (PIB) submitted to the National Assembly by President Goodluck Jonathan , as he declares that it is undergoing thorough scrutiny.
He told Daily Sun that the rationale is to ensure that it meets the expectation of different interests in the strategic industry. Dike also spoke on other national issues including the controversy over poor budget implementation , poor state of roads and how Nigeria can emerge out of her current doldrums.
What can you say accounted for the face-off between the House of Representatives and the Executive on budget?
The House of Representatives is not having issues with the Executive for witch-hunting purposes. We are concerned that in the structure of the Nigerian budget, only a meager part of it specifically, say in the 2012 budget, 28 percent, but generally 25 percent of the entire budget, is dedicated to capital expenditure which is the component that addresses the provision of welfare for the citizens. And remember that the Constitution of Nigeria says that the primary purpose of governance shall be security and welfare .
So, we are concerned that in the over-all structure of Nigeria budget, that constitutional responsibility, the Executive devotes only 25 per cent leaving 75 per cent, that is three quarter, to service recurrent expenditure and debt service. Even that meager 25 per cent that is now put in the budget as an Appropriation Act, which is a fundamental law is not implemented. And we look for reasons for non-implementation, we cannot find. The revenue projections are always exceeded; the oil revenue are exceeded, the tax revenue which is collected by the Federal Inland Revenue Service, is exceeded too.
The customs revenue too are exceeded. So, if the revenue side is being met, there should not be any reason for non-implementation. These are the issues we have; none or partial implementation of budget. And we find that the manner of releases are not only sub-optimal in terms of amount released, but the time of releases is equally wrong.
When you release the fourth quarter allocation in mid-December, and turn round to ask them to return the amount released to the treasury by the end of December because of non-utilisation. Is it fair? That is why we resolved to go on oversight duties to assess the level of compliance with the 2012 budget before we now begin to consider 2013 budget proposal because there is no need to be considering 2013 budget proposal when the budget for 2012 is yet to be executed.
Now, how would you describe the recent oversight duties carried out by the House on Capital Projects execution? What were your findings?
As leader of one of the teams that carried out oversight duties to assess the level of performance of the 2012 budget as far as the road infrastructure is concerned, we took full appraisal of the contract awarded by the Federal Ministry of Works particularly in the South-South zone where my team went to determine how those contracted had been executed. In the process we also saw State governmentsí interventions in those roads, made efforts to determine how well those interventions had been carried out because they are also asking for refunds of their money. One, we saw that some contractors were performing while others were not generally.
But we discovered a very fundamental issue. The issue that most of the contractors who are not performing and even those that are performing had.
The issue is the amount of budgetary releases every year. Most of them said budgetary releases for their road contracts were about one-tenth to one-fifteenth of the entire budgetary allocations for the contract value. So what has happened generally, is that the Federal Ministry of Works probably for political reasons have awarded more project contracts than it could handle in terms of receipts of budgetary funds.
So, with so many projects in their hands, every year they allocate a mere one-tenth to one-fifteenth of the contract value to the projects as budgetary allocation for that year. So this is sufficient only for asmall part of the projects and the contractors abandoned the projects. One thing that is clear is that with such meager releases, it will take up to ten years to finish a road project. By the time you will even attempt to finish it, the previous aspects of the roads that had been completed would have been damaged and gone.
So, we are in a vicious cycle of not fully completing road projects. The second issue that arose is that most of the contractors have challenges of lack of capacity to the extent that if the contracts had been given to more competent contractors, they would not have had such challenges. Most of the contracts were given to local contractors because they wanted to encourage them, but such contractors abuse that privilege, because they lack the capacity. In Engineering practice, if you lack capacity, you engage a technical partner to help you execute a project. But these local contractors who lack capacity did not engage more competent technical partners. This is an issue. Another issue that arose is that in the attempt by the Federal Ministry of Works to get contractors going, they had a policy of giving contractors between 15 to 30 percent mobilisation fees. And they do not begin to deduct mobilisation fees until work had reached 30 percent completion. Our local contractors get this money and go away. So you have in many projects, problem of contractors not working on site even after the mobilisation have been received. And let me tell you that the structure of guarantee which the Ministry of Work is using is pre-insurance bond. And you and I know that the rate of recovery after you terminate a contract is very low. So, this is also an issue. Finally, most performing governors, good governors, do not wait for the Federal Government to come and complete their roads most especially those States that have money like Akwa Ibom. Most of these States are so much in a hurry that they do not go through the process of procurement and approval from the Federal Ministry of Works. But from what we are able to gather, there is an outstanding N36 billion for those ones that went through Federal Government approval. And N182 billion for those who did not go through Federal Government approval. This is now an issue which has to be looked at. So do we now encourage a policy that encourage State Governments to do Federal Government roads and be refunded or should we not encourage it? If we want to encourage it, we must have a clear process in place that will make us have budgetary provisions in† place every year for the refund of monies for those projects handled by States.