LAGOS-CALABAR COASTAL HIGHWAY AND THE CDK CONNECTION: FACTS, REACTIONS, CONTROVERSIES

 

Construction of the Lagos-Calabar Coastal Highway has begun despite fiscal and due process concerns. Indifference, as usual, seems to be the response of President Bola Tinubu’s administration to the challenges. The 700-kilometre stretch of road infrastructure, which will span eight years to complete, will gulp a staggering N15 trillion.

This figure is however only tentative, given the country’s inflationary spiral. The project might well have significant economic benefits for the country on the long run but there are real questions involved, especially as regime spokespersons have repeatedly reiterated the fact that our economy is bankrupt, of which there is no question.

The pilot phase of the construction has started at the Eko Atlantic City and it will terminate at Lekki Deep Seaport, for which N1.06 trillion has already been released. It is a highway of 10 lanes, which will cost N4 billion per kilometre, and would be the first of its kind in Africa, says the Minister of Works, David Umahi.

His zealousness in its implementation brooks no dissent, and sometimes it gets spiteful. The first set of victims, whose properties were demolished to pave the way for the construction, were paid N2.75 billion in compensation last week.

The national mood is already astir on the Lagos-Calabar Coastal Highway, with the circumstances surrounding its award.

Adherence to due process has been queried by some critics, causing waffling in official quarters. The point has to be made: the project did not go through a competitive bidding process, which is imperative for such a huge venture, in line with the 2007 Public Procurement Act, as enunciated in Section 16 (1) (1) and (d), to create transparency, accountability and value for money.

The minister however even admitted, the award sidestepped the public tender competitive bidding process. This raises the question of how the cost was arrived at. The act is a breach of existing extant laws.

Many questions come to mind, begging for answers.

Was it a favour to a friend of the administration?

Or is the government bidding farewell to the transparency and accountability of public tender and the competitive bidding process?

In addition, why was the Environmental and Social Impact Assessment (ESIA) phase of the project not done before work began?

A letter dated 18th April that emanated from the Ministry of Works, soliciting residents living in the Section 1 and 11 areas of the highway in Lagos, to attend a workshop organised for a scoping study that will generate this all-important data, after the project implementation had commenced is enough proof of this..

Former Vice-President Atiku Abubakar, Monday, accused President Bola Tinubu of conflict of interest, because his son, Seyi, was on the board of CDK Integrated Industries, a subsidiary of the Chagoury Group, owned by one of the president’s business allies, Gilbert Chagoury.

Atiku said the development constituted a conflict of interest, given the Chagoury Group’s involvement in the gigantic Lagos-Calabar coastal highway contract being carried out by the Tinubu government.

The former vice president criticised the contract as hurriedly awarded and executed against the country’s procurement laws.

The presidential candidate of the Peoples Democratic Party (PDP) in the 2023 elections, disclosed that CDK Integrated Industries was into the manufacturing of ceramic tiles and sanitary towels.

Citing a report by a Paris-based Africa Intelligence News Agency, where it was revealed by the Corporate Affairs Commission that Seyi was officially a business associate of Chagoury, Atiku said it was not surprising that the Chagoury Group had become the biggest beneficiary of the Tinubu largesse.

Reacting to Atiku’s statement on Monday, the Special Adviser to the President on Information and Strategy, Bayo Onanuga, admitted Seyi joined the Board of Directors of CDK in 2018, more than six years ago. He is representing the interest of an investor company, in which he has interest. He is not a board member because his father is a friend of the Chagourys.

The Lagos-Calabar Coastal Highway project is the most expensive single project ever embarked upon by the Nigerian government. The fact that it is happening at a time Nigeria is facing its worst economic crisis ever is a red flag. This project that is being done in excess of $13bn was awarded without a competitive bidding.

Manufacturing firms have in recent times been posting heavy losses while some are exiting due to poorly implemented exchange rate unification policy with even Aliko Dangote describing it as a huge mess at the recent annual general meeting of Dangote Sugar Refinery.

The IMF in its latest report stated that Nigeria will by the end of the year become the 4th largest economy in Africa behind South Africa, Egypt and Algeria, a disgraceful development for a nation which was the largest in Africa in 2015.

Tinubu’s men would rather want Nigerians believe this is positive development by positing that the IMF rating happened because of the devaluation of the Naira and President Tinubu’s determined effort to set the economy on the path of sustainable growth. As if devaluation of National Currency has a positive effect on Nigerians,

The awarding of the Lagos-Calabar coastal highway was rushed, the environmental impact assessment report was not even completed; the right of way for the 700 km stretch of the highway project was not secured, It was converted from a PPP to a government funded project within the twinkle of an eye.

The N500m that was approved by the National Assembly for the project was ignored, while over N1tn was released by Tinubu’s administration without approval from the National Assembly.

How the project will be financed is still mired in obfuscation. On 23 September 2023, Umahi disclosed that Hitech, the construction company for the work, would fund the project, precisely under the Public Private Partnership (PPP) scheme.

In a volte-face, becoming typical of the Tinubu Administration the Minister later said that the government will provide 50 per cent counterpart funding, in an Engineering, Procurement, Construction plus Finance (EPC+F) model.

This fiscal decision has also been reversed as Umahi revealed that discussions were ongoing for a possible reduction to 30 per cent of government funding.

It is unimaginable that the Tinubu-led federal government will undertake the construction of the Coastal Highway  project at a time that the country’s finances are heading south; and in the face of the dilapidated state of thousands of kilometres of existing highways, which are death-traps.

Nigeria is ranked 131 out of 141 countries by The GlobalEconomy.com on the quality of its roads.

The Muhammadu Buhari regime embarked on reconstruction of existing roads, instead of building new ones. But many are not yet completed.

A failed section of the road in Eleme, Rivers State, precipitated a fuel tanker fire late last month that burnt 120 vehicles and killed five persons.

On the Calabar-Ituh Road, Ningi’s committee spent six hours on a journey, which ordinarily should take one hour; and the senator decried: “I have never seen and experienced what we saw on that road anywhere. Thousands of trucks stuck in traffic with little or no motion.”

The Benin Sapele Highway and Benin-Auchi-Okene-Lokoja Road remain a nightmare for motorists, who perennially block them in protest.

The Benin-Sagamu Expressway rehabilitation, started by the Jonathan administration, is still unfinished work.

The Lagos-Badagry-Seme Highway, whose Lagos end will increase from four to 10 lanes, is begging for completion.

In the South-East, reconstruction work on the Enugu-Port Harcourt Highway stopped at the Aba end, due to the lack of funds, as the Buhari presidency wound up.

Work on the dual carriage Owerri–Aba road has been suspended.

These uncompleted projects, among others, left a N6 trillion debt hangover for Tinubu. The N300 billion 2023 supplementary budget the government provided to address this challenge is like a drop of water in a stream.'

 

The country’s education and health sectors are in absolute shambles, resulting in recurrent crises. There isn’t a single world-class healthcare facility in Nigeria. Our teaching hospitals are relics of the last century; while our universities remain underfunded, denied of the N220 billion annual revitalisation funds in demand since 2009, to make them functional and ideal citadels of research and innovation.

Nigerians are presently being ravaged by fuel scarcity as the federal government is unable to pay oil marketers the N200 billion outstanding bridging claims owed them.

Our seaports cannot compete with the best in Africa, which before now led to the loss of $7 billion annually to Cotonou and Ghana seaports, while the international airports are a laughing stock in comparison with their peers offshore.

Nigeria’s crude oil production has fallen to 1.23 million barrels per day, according to OPEC records in March.

As part of the government’s 2024 borrowing plan, the Senate, in December last year, approved $7.8 billion and €100 million.

The NNPC Limited has facilitated a $3.3 billion loan from Afrieximbank, under five-year tenure at an 11.85 per cent interest rate, which will be repaid through a crude oil swap, whose value has been seriously questioned by critics.

There are also two other loans from the World Bank: the first, a $2 billion facility secured to mitigate the hardship of fuel subsidy removal and a more recent $2.25 billion one that the Minister of Finance, Wale Edu, announced after his Washington trip.

The African Development Bank (AfDB), too, has offered the government $1 billion in credit.

These funds should not be frittered away on a white elephant project that will not positively impact the economy in the short and medium terms

In fact, the over N77 trillion debt and 96 per cent of total revenue to service it, alongside the criminal negligence of our roads, are sufficient red flags against this super highway now.

Nigeria urgently requires strategic thinking on how to improve her public finances. Nigeria’s revenue has plummeted, creating a foreign exchange shortfall with its crippling effect on the naira. At a time in which the economy is bleeding profusely, there must be better areas to plough our little resources into, not coastal roads.

The Tinubu regime should be shrewd in deploying public resources. A road project that will take eight years to complete offers no solution to the urgency of now.

From falsely claiming to have removed subsidies to secretly paying billions monthly based on the revelation of Nasir el-Rufai, the Tinubu administration has shown a lack of coordination and transparency, failing to even explain to Nigerians why there is petrol scarcity across the country.