Hon Minister for for Works and Housing, Babatunde Fashola has disclosed that states in the country could lose federal road projects in their states over what he described as ‘unreasonable demands for compensation’ by some communities having the roads.
In an interview gotten from Nigeria’s Vanguard, the minister explained that it was the duty of governments at the state level to settle such issues once a land has been identified as suitable for a federal road project to pass through. He added that the Land Use Act vests powers over land on states.
While admitting that said some federal road projects were being delayed because funding had been secured and contractors engaged but, could not move to site because communities were making demands for compensation, the former Lagos state governor however, commended some state governors for taking the initiative in settling such issues and paving way for projects to go on as planned.
“Compensation as I told you is a state responsibility, so there is nothing to lose my mind about, Fashola said.
“The president has made it clear. This has to be on a collaborative basis, we’ve designed the projects, we have found the funding, and they give us the right of way after all it is one country.
“You control the land and any state that does not give the right of way, we take the view that the project is not interesting to you, we will move the resources somewhere else”.
While speaking on how the rising global inflation is impacting ongoing projects, the minister noted that while it was true that a reasonable margin of profit is factored into project costs taking into consideration possible inflationary trends, the current inflationary trend which was not peculiar to Nigeria was not envisaged.
“Our contractors have of course raised these issues, we know them, we know that for example our provisions for variation in prices, didn’t contemplate this astronomic increases so it will be unreasonable in some cases to expect the contractor to go on and so in some places we are making adjustments increasing the provision for the variation of prices.
“We are also telling the contractors, if you are planning to make 10 percent profit, you may be in a better position now to make 3 percent and move on to the next project that we can re-cost in today’s reality or we don’t want you laying off staff, which will be the easiest thing that a contractor will do.
“But the hardest thing for a contractor to do is to shut down his machines; he doesn’t want that to happen either. So, they’ve been reasonable largely, we are having reasonable interactions, they have to give something, that is why I talked about people who want a road, who don’t want to contribute lands.
“Contractors are in some places saying okay, ‘I will just try and finish this, I know there is no profit on this, if I can break even, pay my staff, I will make my profit from the next project’ because they are also Nigerians.
“So, in these challenging times, everybody has to sacrifice something, all the answers can’t come from the government alone, especially as it concerns revenue, there are trade offs here. If we have no economic business, everybody suffers, anything that we can get to do while this bad weather is blowing around, let’s continue to do it, so that is it”.