Tinubu presidency, Chagoury and the N15.6trn highway controversy
The relationship between President Bola Tinubu and Gilbert Chagoury, the owner of the company awarded the N15.6 trillion Lagos-Calabar coastal highway project, has continued to raise questions about the propriety of the deal, especially amidst other priority projects competing for attention all over the country.
While there is consensus in many quarters that the coastal highway will serve as a signature project in terms of economic development when executed with all sense of appropriateness, pundits, however, believe a lot of issues did not add up, hence the barrage of questions around the motive and propriety of having the project at this time.
The federal government had confirmed not only the award of the contract to Hitech Construction Company, owned by the Chagoury family, but also gave approval for the release of N1.06 trillion for the first phase of the project, a development that experts have revealed contradicted the model adopted for the project.
The Infrastructure Concession Regulatory Commission (ICRC), which regulates privatepublic contracts, mandates the government to advertise all proposed projects so that interested contractors can submit bids, after which the Federal Executive Council, presided over by the president, is expected to make the final decision.
But the final decision was said to have been made without recourse to the ICRC provision, making several Nigerians, including former Vice President Atiku Abubakar, the presidential candidate of the main opposition party, the Peoples Democratic Party (PDP), question the seeming lack of due process in the award of the contract to Hitech.
While the Minister of Works, Dave Umahi, had explained that the reason for awarding the contract to Hitech without competitive bidding as laid down by the laws of the country was because of the company’s “track record”, the explanation and his revelation that each kilometre of the 700km-long road would gulp N4 billion further left many Nigerians befuddled.
The minister had also said that the contract was awarded on a counterpart-funding basis and not on a public-private partnership, as widely claimed.
Heart-rending revelation
According to a document by the World Bank on the cost of road infrastructure in low-and
middle-income countries, the average cost of a new four-lane highway is $2.1 million (N2.4 billion at N1,160/USD). But there is no available data to compare the cost based on the specifications (11 inches of concrete with 20 millimetres of reinforcement for the 10-lane highway) that the federal government stated for the Lagos-Calabar coastal highway.
An analysis of the cost indicates that the cost of this project massively dwarfs the total capital budget of the ministry of works in the 2024 budget, which stands at N617, 853,474,192, with economists saying the LagosCalabar coastal highway might end up being a white elephant because of its long-term prospects.
Umahi’s contradictory policy assertions raise further questions
Since the President Tinubuled administration introduced the
project in 2023, the Minister of Works, Umahi, has been seen to make several contradictory policy assertions that many have said breed suspicion about the urgency of the project and raise questions about why it was awarded to Hitech in the manner in which it was awarded.
At the onset, Umahi had said the project would be run in two phases with multiple sections, each made up of three sections. Section one covers 47.47 kilometres, section two covers 57 kilometres, and the third section is about 50 kilometres. He announced in October 2023 that the project, approved in favour of HiTech, was being procured under Engineering, Procurement, Construction, and Financing, popularly referred to as EPC+F, a construction industry contracting agreement where contractors design, procure equipment, construct, and finance a project.
He said the project would be executed as a public-private partnership (PPP) and would be tolled upon completion, with the contractor already securing the necessary funding.
He, however, backtracked on the funding part in February, saying the federal government had approved the sum of N1.06 trillion for the first phase because the contractor had encountered hitches in funding.
Though he insisted while reacting to Atiku’s concern about the project that the 700km road project will cost N2.8trn with each kilometre gulping N4bn per kilometre, he had in February said the N1.06tn approval for the project by the FEC was to cover 47.47km, under 10 lanes.
He was quoted as saying: “Today, we have procured the first section, which is 47.47km under 10 lanes, and FEC graciously approved the contract for N1.067 trillion with no objection.
“FEC also approved that the second section be procured, to be funded by the federal government, which is about 57km and that runs from Lekki Deep Seaport to the boundary between Ogun and that section two of phase one.”
New ambitious project amidst several abandoned projects
In January, the Minister of Works stated that the federal government did not have the N1.35 trillion asking price by Julius Berger Construction Company to complete the Abuja-Kaduna section of the Abuja-Kaduna-Kano highway.
The road, which was one of the legacy projects of the immediate past President Muhammadu Buhari administration, was supposed to be completed in 2021. However, the completion did not see reality till the administration ended in 2023, even though a large chunk of the Zaria-Kano axis was completed.
Speaking with one of our correspondents, an economist, Prof. Ndubisi Nwokoma, stated that while the Lagos-Calabar coastal highway has a long-term effect, it is not critical in a short time.
According to him, there are more pressing projects that the government should focus on instead of dissipating energy on the Lagos-Calabar coastal road, which he said would end up being a white elephant.
“In a short time, I don’t think it is something very critical. There are more critical issues that need to be addressed in the short term. The economy needs to be revived. We are happy the foreign exchange market is responding to treatment, to use that terminology.
“Those are more critical issues. People need to eat and survive. The cost of living is very high. There are other questions people would want to ask. There is the East-West Road, which has not really been receiving attention the way it ought to. I am talking about the old East West Road, which is having problems from one regime to the next.
“We have existing roads across the country that are in very bad shape, existing roads that would open up the economy and enhance production. This one, to me, is like an elephant project. The benefit would come in the long term, and I don’t think there should be too much hullabaloo about it.
“It is better we stabilise as a country and people have some measure of quality of life, the plan should not be thrown away, but the