The Minister of Works, David Umahi, recently addressed concerns regarding the absence of the Lagos-Calabar Coastal Highway from the 2025 budget. He explained that this omission was a mistake. Many stakeholders were worried about the exclusion of this significant road project, which is worth billions of naira.
In a video shared on X (formerly known as Twitter), Umahi clarified that the budget mistakenly listed the Lagos-Port Harcourt Highway instead of the intended Lagos-Calabar Highway. He mentioned that he is in discussions with the committee chairman to rectify this issue.
However, in a previous interview with DANDALI, Dr. Chukwuma Katchy, the Managing Partner of KPT Associates Ltd, pointed out that the Lagos-Calabar Coastal Highway is structured as an EPC + F project. This means it is an Engineering, Procurement, Construction, and Financing project. In this model, the contractor is paid either at the end of the entire project or after completing certain phases, so it doesn’t need to be included in the budget every year.
Babatunji Adegoke, the treasurer of the Nigerian Society of Engineers, also weighed in on the situation. He suggested that the omission might be related to the same EPC + F structure. He explained that in this arrangement, the contractor is responsible for the entire project, which includes the design, buying materials, and building the road, as well as part or all of the financing.
Adegoke noted that the Minister has stated that the Federal Government will fully fund the first phase of the highway. This seems to go against the usual EPC + F model, where contractors typically share in the financial investment. He proposed two possible explanations for this situation: either the government is using a different procurement model for the first phase, taking on all the financial responsibility while the contractor only handles the engineering and construction, or the government’s funding is part of a larger EPC + F agreement for the entire highway project.
He further explained that if the government has already fulfilled its financial commitment for the first phase, the contractor would then be responsible for the remaining funding. However, Adegoke expressed concern that the lack of clear communication about how the project will be funded and procured makes it difficult for people to understand why it was left out of the budget. This lack of clarity can lead to confusion among those involved in or affected by the project.
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Femi Oyedele, the Managing Director of Fame Oyster & Co. Nigeria, also commented on the situation, stating that the Lagos-Calabar Coastal Road project was not included in the 2025 budget because it is a Public-Private Partnership (PPP) using the EPC + F model. He explained that in this arrangement, the development partner, Hi-Tech Construction African Limited, will finance and build the road and will recover its investment through tolls collected from users of the road.
On the other hand, Adewunmi Okupe, the Chief Executive Officer of Ace hiTeck Construction Co. Ltd, expressed suspicion about the omission, suggesting it may have been intentional. He claimed that while the project should have been a Public-Private Partnership, the Federal Government has already spent over N1 trillion on the first phase without consulting the National Assembly. He alleged that the project was later redefined as EPC + F in October 2024 to bypass the normal bidding process, allowing the government to choose a contractor without competition. Okupe believes that including the project in the current budget would spark debates, which the government is trying to avoid.
He predicted that the government would continue to raise funding issues for the project without following a transparent process, and that it is unlikely any private company will genuinely join the project, suggesting it is being handled for the benefit of a select few.
Additionally, it was reported that the Federal Ministry of Works has a total capital allocation of over N1 trillion in the proposed 2025 budget. However, BudgIT, a civic-tech organization, pointed out that the Lagos-Calabar Coastal Road, which is currently under construction, was not included in this budget. They raised concerns that if funding for this project is eventually needed, it might require diverting money from other important projects, which could disrupt their progress and undermine the budget’s reliability. BudgIT also criticized some of the budget’s projections as unrealistic and highlighted the government’s failure to provide detailed breakdowns for the budgets of various ministries, departments, and agencies.
