Sequel to the approval granted Wednesday by the Federal Executive Council (FEC), Lagos State Government can now go ahead to secure two World Bank loans totaling N40 billion ($242.3m) for infrastructural development.
Briefing State House correspondents after the weekly Cabinet meeting presided over by President Goodluck Jonathan, Minister of information, Labaran Maku, said the first loan of $200 million from the International Development Association (IDA) is in support of the second Lagos State development policy operation.
Also, he said the second loan of $42.3million is additional financing for the Lagos-Epe secondary education project.
The approval was sequel to a memo presented by the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala.
Maku however explained that the Federal Government is only serving as a warrantor for Lagos state government in the negotiation of the loans with the World Bank .
According to him, the loan comprises of 0.5% commitment charge, 0.75% service charge and 1.25% interest per annum on the loans. The loans are to be repaid back in 25 years, with a provision for 5 years moratorium.
He spoke further, “The Coordinating Minister of the Economy/Minister of Finance brought a memo seeking council’s approval to obtain additional credit facility from the International Development Association (IDA) in support of the Second Lagos State Development Policy Operation.
“The objective of the project is to improve on public finance and sustainable manner and consolidate on the achievements recorded under the First Phase of the project.
“The project covers the construction of a 27km light rail, construction of schools and the construction of Adiyan Mini Water Works to provide 2million gallons of water per day.”
“Council approved that the ministry of finance obtain additional credit facility in the sum of $200 million from the International Development Association (IDA) in support of the second Lagos state development operation.
“Council also approved that the coordinating Minister for the economy should execute the financing agreement on behalf of the federal government; and direct the Attorney General of the Federation and Minister of Justice to issue the legal opinion required to render the credit effective”.
Maku also spoke on the second loan facility, “After deliberations, council approved that the ministry of finance obtain an IDA credit in the sum of $42.3m as additional financing for the Lagos-Epe secondary education project.
“Council approved that the CME should execute the financing agreement on behalf of the FG and direct the attorney-general to issue the legal opinion to render the credit effect”.
Another memo considered by Council was brought by FCT Minister, Senator Bala Mohammed. He said
Council approved N2 billion contract for operation, maintenance and training of staff for Wupa Basin Sewage Treatment Plant in the city.
“The training component in the previous maintenance contracts had offered opportunity for 22 members of staff of FCT Abuja Environmental Protection Board (AEPB) including engineers, scientists, technologists, technicians and others to acquire skills and experience in the operation and maintenance of sewage treatment plant. There was a budgetary provision in 2013 FCT Appropriation to fund the project.
“After deliberations, Council approved the award of contract for operation, maintenance and training staff for Wupa Basin Sewage Treatment Plant in favour of Messrs S.C.C (Nigeria Limited) in the sum of N2,006,071,928.73, with a completion period of 20 months” Senator Mohammed said.
On his part, the Minister of Transport, Idris Umar said that the Council approved N722.29million and €2.05million for consultancy services for Shore Protection and Rehabilitation of Escravos Breakwaters and Greenfield Port Development at Ogidingbe, Delta State.
He explained that the project is in line with government’s desire through the NPA to restore the structural stability of the Escravos Breakwaters constructed in the 1950s, develop a new port and build Central Processing Centres for the Fertiliser and Petrochemical Plants and infrastructural development to support the Gas-to-Energy Revolution in the Ogidingbe area.
On completion, he said the project will generate a total of 1,700 job opportunities for professionals and non-professionals during the planning and construction of the Escravos Port and related industrial development, breakwater and dredging operations while 10,000 jobs will be created during the operations phase on an annual basis for professionals and non-professionals.
The Minister assured that there is a budgetary provision of N50m in the 2014 budget and a proposal for the balance of N803.5m in the 2015 budget.
He spoke further, “Council approved the commission of consultancy services for the Shore Protection and rehabilitation of Escravos Breakwaters and Greenfield Port Development at Ogidingbe, Delta State, for the NPA/Ministry of Transport in favour of Messrs Royal Haskoninb DHV in the sums of N722.29 million and N2.05m inclusive of all taxes, the latter payable at the prevailing exchange rate at the time of payment with a completion period of eight months”.
