How Tinubu’s govt saved $53m on Abuja Light Rail project

How Tinubu’s govt saved $53m on Abuja Light Rail project

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The Minister of the Federal Capital Territory (FCT) said on Monday that the administration of President Bola Tinubu met the contract for the operation of the Abuja Light Rail at a whopping $128 million.

He told the Senate Committees on FCT and FCT Area Councils that the administration was forced to demand details and urgent reviews of the sum because there was no way the Federal Government could afford to pay such an amount.

Wike, who appeared before the committees to defend the N1.1 trillion statutory budget of the FCT for this year, told lawmakers that the contract was signed by the government of his predecessor, former President Muhammadu Buhari.

Narrating the encounter between him and the contractor, CCECC, the minister said he got to learn that the cost of operations also covered personnel training for 29 months.

He stated, “This was projected by the last administration. We did a review and brought it down to $75 million; in the process, we saved about $53 million for the government.

Wike added, “It had to do with the Metroline. The cost for the construction is different from the cost for the operation, where CCECC is insisting we train our people for 29 months, and it was approved by FEC before this administration for $128 million.

“I told CCECC, you have made your money in construction, and you don’t want this job to go on; convert $128 million; how much is it?

Obviously, you are saying that this thing will not work and that it is sabotage.

“I looked at it, and I told my team to call the contractor for us to sit in an argument. We argued back and forth, and I insisted no; it is better we leave the contract. To cough out $128 million from where? At the end of the day, the committee recommended $63 million, and I said okay.

“By the end of the day, we came up with $75 million because of the additional work, and since we are preparing for the opening on the 29th, there are 12 stations where we have to put them in order.

“That is why it became $75 million, and I have told them to prepare the agreement and let them go and start working. There is no way for the cost of operation to train our people to gulp $128 million; it is unbelievable.

“I had made it known to the council, and if they had not agreed, there was no option but to tell the President (Tinubu), there is nothing we can do; we cannot go on with the project.

“$128 million at what Naira to a dollar? Calculate it. Even $75 million calculates it.”

Commenting on the delay or non-completion of public projects, the minister spoke of his belief that most government contracts were “inflated,”  adding that he had no apologies for taking that stance.

According to Wike, contracts are inflated deliberately because the government doesn’t pay on time, thereby giving contractors and others on the project chain the window to call for variations.

An idea he said he had opted to implement was to use internally generated revenue (IGR) sources to part-fund some projects while awaiting the releases of main capital budgets, and in that way scuttle the plots by contractors and their collaborators in the system to seek variation at the slightest opportunity.

The N1.1tn statutory budget for 2024 is N506.5bn (44%) higher than the revised 2023 budget of N641.2bn.

Wike attributed the difference in the increase to “the expected loan from the commercial bank in the sum of N500bn,”  which he said would be applied to new and ongoing projects in the territory.

The personnel costs component is N140.9bn, up from N99.5bn in 2023, or a difference of N41.3bn (29%).

“The increase is to accommodate the emoluments of the appointed mandate secretaries and other political appointees of the administration, payment of staff promotion arrears, peculiar allowance, staff wage award arrears, and AEPD Conraiss arrears (11 months),”  he explained.

From N135.4m in 2023, the overhead costs of the FCT jumped to N280.5bn (24.44%) in 2024.

The minister told the lawmakers the additional N145.1bn would be spent on FCT Security Services, Loan Repayment, Logistics Support to Security Agencies, Operation and Maintenance of Wupa Sewage Treatment Plant, Maintenance of Dump Sites in Satellite Towns, Water Treatment Chemicals, and Welfare Packages (FCT Staff Palliative).

Compared to N2023, when the capital allocation was N406.2bn, the budget size for this year is N726.3bn or a 63.28% raise.

Wike also spoke on the challenges of managing land allocation in the FCT, disclosing that up to 1,500 cases were instituted against the administration, a reason it had also earmarked N5.5bn for legal services in 2024.

Among other issues, Wike revealed that the administration was battling cases of multiple allocations of the same land to different individuals and organisations.

“This time around, we are ready to take on them head-on; we are going to engage senior lawyers.

“We won’t rely on FCT civil service lawyers because these ones also collude with those causing problems,”  he added.

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