How we saved $53m from $128m contract awarded, by Wike

The Minister of the Federal Capital Territory (FCT), Nyesom Wike, yesterday disclosed how his administration was able to save $53 million for Nigeria from a contract of $128 million approved by the immediate past administration of President Muhammadu Buhari

He said the administration of President Bola Tinubu met the contract for the operation of the Abuja Metro Light Rail at $128 million.

Speaking before the Senate Committees on FCT and FCT Areas Councils, he said 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 N1.1trillion 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 learned 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, saving about $53 million for the government.”

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

Commenting on the delay or non-completion of public projects, the minister said most government contracts were “inflated”, adding that he owed no one 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 N1.1trillion statutory budget for 2024 is N506.5 billion (44%) higher than the revised 2023 budget of N641.2 billion.

Wike attributed the difference in the increase to “the expected loan from the commercial bank in the sum of N500 billion”, which he said would be applied to new and ongoing projects in the territory.

The Personnel Costs component is N140.9 billion, up from N99.5 billion in 2023 or a difference of N41.3 billion (29%).

The minister told the lawmakers the additional N145.1billion 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 N406.2 billion, the budget size for this year is N726.3 billion 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 for us”, he added.