FG Demands Proof of Funds from Highway Development Partners
By Patience Ikpeme
The Federal Government has instructed private sector partners involved in its Highway Development and Management Initiative (HDMI) to furnish concrete evidence of their financial capacity to execute the road projects assigned to them.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, conveyed this directive, received from his counterpart, the Minister of Works, to representatives of the participating consortiums during a meeting held in Abuja on Wednesday.
According to Mr. Edun, the Minister of Works, Engr. Dave Umahi, wants to ensure that as part of the partners’ submissions and requests, they provide verifiable proof of funds. This measure is intended to assure the regulatory body, the concessionaire, and the government that the finalization of the agreement will promptly lead to mobilization for service. Mr. Edun clarified the rationale, stating, “You do not just take money and have it lying down where it will be costing you.”
Mr. Edun further stated that, “Subject to that obvious qualification, we would like to hear definitively about your readiness to fund and implement the concession agreements.”
Also present at the meeting, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, assured the consortiums of the government’s commitment to supporting the private sector. He stated, “We are here to listen so that we can make haste quickly. The government is determined to support the private sector so that your investors, those who you approach for funding, will have a rest of mind that reforms have been put in place and will stay the course.”
Mr. Kola Karim, Head of the MOTA-ENGIL/AFC consortium, acknowledged the critical importance of documentation in assuring global and local financial institutions of the fundability of these projects. He requested Mr. Edun’s assistance in “making sure we have an enforceable C2 type documentation to make sure it’s simple enough for global investors who wants to support this initiative,” adding, “I can confirm to you there’s a lot of them. Our consortium is the Africa Finance Corporation, Mota Engil so you can understand these are global institutions attracting capital for this type of project is very, very real.”
Mr. Karim expressed concern over the protracted timelines experienced in engaging with potential investors. “The time frame it has taken and it is taking from the investor side that we’ve been talking to and having meetings with is taking way too long,” he lamented.
He expressed the consortium’s appreciation for the government’s intervention, stating, “So we’re very happy all of us with your intervention and Mr. President’s directives, but it is important we sustain it so we know we’re serious. As you know sir, capital is looking for returns, but it’s not going to wait endlessly for Nigeria to get serious. So this is what I want to proffer as a solution.”
Mr. Karim proposed that the government assist in expediting the necessary documentation to facilitate funding and mobilization for each contracting party to commence work on site, thereby realizing the aspirations of the President and the government. He specifically requested the finalization of addendums to the concession agreements, noting that “first we’re very grateful that one of the addendums, the addendum has been signed for one. We think it should be done for all the others, so that way we all have the relevant documentation that’s needed to then progress into a situation where the handover date is agreed and positioned and all the concessionaires take over the concession and move to site.”
Dr. Jobson Oseodion Ewalefoh, Director General of the Infrastructure Concession Regulatory Commission (ICRC), affirmed the government’s commitment across all its arms to the success of the HDMI project, driven by the President’s directive to finalize the deals and commence work swiftly. He cited the handover and mobilization for the Benin-Asaba road as evidence of this commitment.
However, Dr. Ewalefoh addressed the consortium’s concerns regarding documentation constraints, stating, “You must understand that government is about public trust. We must ensure that we are able to ascertain that the needed capacity, expertise and investment is available to carry out this transaction.”
He added the ICRC’s readiness to support any suggestions or concerns regarding the speed and efficiency of moving to site. He also cautioned against repeating past issues, noting, “You must understand that there are a lot of litigations from other project because of concessioners not able to mobilize the necessary funds or the capacity of the agreement that’s signed to move to site. So we are concerned to ensure that those things do not repeat itself again.”
Dr. Ewalefoh acknowledged the delays experienced since the project’s launch in 2021, stating, “It’s painful, I must say, that this project in 2021 was launched and this is four years into five years now. We are yet to mobilize to site and we already launched HDMI 2. So I think this is a necessary step for us to resolve all gray areas concerning this agreement. So I think we’re all here to listen to you.”
He concluded by offering the ICRC’s support in addressing any areas of negotiation or concern, ensuring transparency and equitable treatment among all parties involved in the HDMI initiative.
