Oyo State Governor, Engnr Seyi Makinde says for the nation to be set on the path of economic growth and development, there is the need to strategize on how to increase our spending on infrastructure.
Goalpoacher reported that Makinde stated this while Flagging-Off the construction of Airport-Ajia -New Ife Expressway with Spur to Amuloko Road Project this Tuesday.
He said what the state get monthly from the Federal Allocation is not enough to pay salaries of workers, therefore, we need strategies on how to improve on infrastructure
Makinde noted that the 21km Airport Road Project which was flagged-off today is a result of his administration to come up with strategic ways of reducing infrastructure deficits tagged the Alternative Project Funding Approach.
“You may have read the Mckinsey report on Nigeria’s infrastructure requirement which said that as a nation, we need to invest over $31 billion every year for at least ten years for us to bridge our huge infrastructure deficit. If we put that number in perspective, $31 billion is equivalent to over N11 trillion annually, that is larger than our national budget for 2020.”
“This deficit occurred because as a nation, we have steadily reduced how much we spend on building and repairing infrastructure while increasing how much we spend on recurring expenditure like payment of salaries. Therefore, if we are to put our country back on the path of economic growth, we must strategise on how to increase our spending on infrastructure.”
“Th is what we are doing here in Oyo State. The twenty-one-kilometre Airport – Ajia – New Ife Express Road with a spur to Amuloko which we are here to flag-off today, is a result of our administration coming up with strategic ways of reducing our infrastructure deficit. We call it the Alternative Project Funding Approach (APFA). ”
“As I explained during the budget signing last week, APFA is our way of funding some infrastructural projects in the state by having the contractors fund the projects with their own money while the state repays them over a period of time. What this entails is that the contractor carries the projects’ risk. At the same time, we get quality delivery and quick completion of projects.”
“And so for projects under the APFA, because of the nature of spending on the projects, we decided that it would be best to open up the bidding process a little more so that contractors outside of Oyo State can bid as well. We reached this decision because we are looking for private entities who have the wherewithal to complete the projects on schedule while at the same time, passing the tests of quality assurance.
In the case of this twenty-one-kilometre Airport – Ajia – New Ife Express Road with a spur to Amuloko, the contract was awarded to Messrs Peculiar Ultimate Concerns Ltd at a total cost of Eight Billion, Five Hundred and Twenty Million, Nine Hundred and Nineteen Thousand, Seven Hundred and Seventy-Six Naira, Forty-One Kobo (N8,520,919,776.41). We have given them the mandate to complete the road in twelve months, and they have promised to deliver.
Good people of Oyo State, the contractors for this project from neighbouring Osun State, are willing and able to deliver on these projects. They will be bearing the risk of getting this project done in a timely manner while we pay them over the next twenty-nine months. That comes down to roughly N300 million a month. So while they will complete the project in one year, we have the option to repay in over twice the time.”
“We will continue to actualise named capital projects through budgetary allocation and have the additional option of carrying out other infrastructural projects outside of the budget using the Alternative Project Funding Approach. So you can look forward to other projects under this approach.
Let me state that even when we are forced to look outside Oyo State for persons to execute the projects under APFA, we still put the interests of our people first. For example, Peculiar Ultimate Concerns Ltd has agreed that the construction labour will come from Oyo State, and we are holding them to that agreement.
Please permit me also to use this opportunity to re-address the criticism that trailed the cost of this contract. Some people had asked why the Airport-Ajia road costs more per kilometre than the Moniya-Iseyin road. Let me restate that when we want to make such comparisons, we should ensure that we are comparing apples to apples and not apples to oranges. One of the roads may appear longer, but when you visit the site, you will find that the Airport-Ajia road has more hydraulic structures, what you will call bridges in lay man’s terms. We will be embarking on the expansion and rehabilitation of these bridges as well.
Our administration means business. We will drastically reduce the infrastructure deficit in Oyo State in the shortest possible time.
And this is how economies work: Investors will only go where they can be assured of profits. If we do not develop basic infrastructure like roads, it will affect the cost of production, which in turn means less profit for investors. So, we cannot be seriously discussing attracting investment into Oyo State when a majority of roads and other infrastructure are in a state of disrepair.”
On his part, the Managing Director of Peculiar Ultimate Concerns Limited, Adeleke Olanrewaju said he was glad to be part of the success story in Oyo State and want to express his sincere appreciation and gratitude to Governor Seyi Makinde for providing the enabling environment for business and investment to thrive. Adeleke assured Makinde that the project would be delivered within the period of 18-months.
