The federal executive council (FEC) has approved N28.1 billion for the augmentation of road and infrastructural projects in the Wasa District of the federal capital territory (FCT).
The council gave the approval on Wednesday in a meeting presided over by President Muhammadu Buhari in Abuja.
Speaking to journalists after the meeting, Mohammed Bello, minister of the FCT, said the augmentation was a ripple effect of inflation, which has overtaken the initial approval of N56 billion for the Wasa district projects.
“The initial contract for that project was awarded in 2014 at the sum of N56 billion but as time went by and due to inflation and some other factors, we had to vary the contract and the price to reflect current realities and that is the reason why the augmentation request was presented to council and council approved,” he said.
Bello said the total project sum was N85 billion with a completion period of 42 months.
The council also ordered the buyers of two seized properties in Lagos to pay the government the cost of the prevailing price in 2001 when they were purchased.
Babatunde Fashola, minister of works and housing, said N18 million and N20 million were to be paid for the Lagos-based properties earlier purchased for N5 million and N2 million, respectively.
He said the government was short-paid in the transaction.
“They were properties sold as a result of prosecution for narcotics by NDLEA. So, they were proceeds of drug crimes, but the valuation process followed the NDLEA Act instead of the Financial Regulations Act. So essentially, those policy proposals were approved by the government,” he said.
“The addresses of the properties, the first one is a four-bedroom bungalow with two room boys’ quarters at Adeniyi Jones in Ikeja Lagos, and the other one was a five-bedroom duplex with two room boys’ quarters at Amadasun street, GRA Ikoyi, so they were sold for N5m and N2m respectively in 2001.
“At that time, the valuation we got was that if they were properly valued, they should have been sold for N18m and N20m respectively.”
He noted that the NDLEA Act of the time gave precedence to the directives from the ministry of justice and regulations were made according to powers under the act.
“But they did not take cognisance of the procurement law and the financial regulations of the time,” he said.
“So, we are now saying, going forward, the financial regulations must take precedence. So, those are all proposals that will come as a new law when the Ministry of Finance finishes with them so that you cannot have different regulations for the disposal of assets that have been forfeited to the government. They must be subject to one superior procedure.”
The minister also said the council approved a policy recommendation to extend the usage life of government assets such as plants, equipment, land, property and machinery.
“The purpose of the policy memorandum was to seek better enforcement of the financial regulations of the government, especially the revised 2009 regulations with regards to valuation process for plants, equipment, land, property and machinery, and also how they are disposed of when they reach the end of life,” Fashola said.
“This policy is premised on Executive Order 11 that enthrones maintenance as a conscious government policy. And we think that because of that, government assets should last longer than the life cycle usually prescribed in the existing financial regulations, such as four years and nine years for other classes of machinery.
“The other context behind the policy was also to help the government manage expenditure in the face of revenue challenges on certain items of governance. For example, if you slow down the depreciation policy on vehicles, your replacement rate slows down as well.”
He added that with the new approval, the depreciation threshold for vehicles would change from four to six years.
“Plant and machinery would also have a 10-year depreciation period instead of the existing timeframe in the financial regulation,” he said.
“Also, the ministry proposed a strategic percentage depreciation rate per year for vehicles with two-litre engines and those above two litres.
“We also proposed that heads of the ministry as accounting officers must sign off now on request for valuation of properties, especially when agencies are trying to buy properties.
“We’ve seen that sometimes ministers are not even aware that proposals are being made for the acquisition of some type of assets. Essentially, the council approved all of the policy recommendations. They should go to the Ministry of Finance, who is in charge of making the financial regulations to effect the necessary regulation.”
On his part, Timipre Sylva, minister of state for petroleum resources, said the council approved the sum of N2.044 billion for the construction of internal roads and facilities at the Gas Hub in Bayelsa state.
The minister added that the Port Harcourt Refinery would be completed and resume production by December this year.