‘Why infrastructural projects require special funding to aid delivery’
This was the view of the Managing Director of Hortigraph Nigeria Limited, Murtala Abubakar while speaking at the unveiling of the Standards Organisation of Nigeria’s (SON) Metrology Institute in Enugu, recently.
As the contractor to a part of the project, Abubakar explained that infrastructural projects in the country are often delivered within the agreed timeline due to financing gap that often keeps contractors at sites beyond agreed period, while widening the budget of the project.
Indeed, a recent report by PricewaterhouseCoopers Limited showed that Nigeria’s infrastructure projects are most times behind the scheduled date for delivery by at least two years while budget estimates are double the original estimates.
Abubakar noted that in addressing this key challenge of financing, the cost of funds should be addressed adding that, financial instruments required to attract additional infrastructure financing to the country like, bridge equity, secured loans, refinancing/secondary transactions, as well as credit enhancement and other risk mitigation measures geared at attracting non-traditional funders such as institutional investors and international investment banks should be created.
He explained that his company, with many years of experience in key mass housing and infrastructural projects hopes to complete the metrology institute within the timeline of three years considering other major variables.
“As a civil engineering firm with at least 15 years experience in housing and government projects, the Nigerian Metrology Institute (NMI) is the first project that the firm would be executing for SON and we have commenced work to ensure that the timeline of three years is met while ensuring that the quality and standards of the project is not undermined.
“We are also working to ensure the sustainability and environmental friendliness of the project by ensuring that it complies with the Environmental Impact Assessment (EIA) requirements”, he added.
Already, PwC in its report had stated that, “Infrastructure plays a key role in economic growth and reducing poverty having a 5-25 per cent yearly return on investment as an economic multiplier.