Govt, surveyors seek new templates for project costing
As the vagaries in exchange rate continues to affect prices of construction materials, the federal government has called for a new template, which will ensure proper costing of projects and prudent management of available resources.
Speaking at the 2016 National Project Cost Reduction Summit organised in Abuja, by the Quantity Surveyors Registration Board of Nigeria (QSRBN), the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the move has become inevitable in view of current fiscal constraints arising from fall in the price of oil and Government revenues.
He identified factors responsible for high cost of project implementation in the country to include price fluctuations due to vagaries in exchange rate, which in turn affects prices of construction materials; change in site condition, most time due to inadequate feasibility studies before project commencement, irregularities among project supervisors; and poor data used for feasibility studies.
According to him, addressing high cost of project implementation can be a panacea for inclusive and sustainable national development.
He noted that as a way of ensuring value for money, the Ministry in preparing the 2016 budget adopted a novel approach known as ‘Zero Based Budgeting ‘as against the envelope /incremental budget system that had been in place. The Zero-based Budgeting Approach (ZBA) is a method of budgeting by which all expenses must be justified for each year.
He stated that in a bid to free up resources for capital projects, the government in the 2016 budget raised the share of provision for capital projects to 30 per cent from about 12per cent in the 2015 budget and also re-prioritized the projects for implementation with infrastructure projects including power, roads, housing, transport among others being allocated over 30per cent of the total resources for capital projects.
He explained that the emphasis on infrastructure rests on the fact that such projects can contribute to poverty reduction, job creation and equity in the society, adding that it is in consideration of pervasive influence of infrastructure on inclusive growth, among others, that the Ministry coordinated the development of the National Integrated Infrastructure Master Plan to raise the stock of available infrastructure.
His words: “Sound public procurement policies are among the essential elements of good governance. The Public Procurement Act 2007 established the Bureau of Public Procurement charged with the responsibility to among others, provide legal and institutional framework and professional capacity for public procurement in Nigeria.
“Experience in the last 2016 budget preparation process showed the need for uniformity in the prices for similar items submitted by the Ministries, Departments and Units. The Bureau will therefore, need to provide standard price list for items for consideration during budgeting process. The support to achieve value for money in this regard may not be over-emphasized.
“Driving development through better infrastructure is, therefore, key to sustainable development. The present administration, as we all know, was elected into office on a change mantra. This presupposes that the Administration will be doing away with old and unsustainable ways of doing things and, therefore, will be entrenching good governance practices.
“As to addressing suitable choice of projects sites, the Ministry will popularize among the MDAs the use of the Nigeria Assets Decision Support System (NADSS) developed with the technical support of the Nigeria infrastructure Advisory Facility (NIAF) to aid decision on project sites as well as check cost escalation that may arise from wrong choice,” he said.
Meanwhile, the President of QSRBN, Mallam Husaini Dikko has stressed the need to develop templates for determining costs of buildings, Roads/Highway, Bridges, Railways, Dams and other Civil Engineering projects in Nigeria.
According to him, the absence of these templates often places project costs at large, subject it to the whims and caprices of administrators and politicians who see it as a loophole to siphon public funds into private pockets.
QSRBN President said that high cost of construction arising from corrupt inflation of prices/costs, contract padding and other corrupt devices is the major cause of poverty and under-development in Nigeria.
He observed that costing template will provide the tool for benchmarking costs of all types of construction projects across the country.
Dikko noted that National Project Cost Reduction Summit is designed to find solution to the irritant challenge posed by corrupt practices and other ignoble tendencies by participants in the construction project delivery in Nigeria.
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