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GOVERNMENT yesterday approved a fresh N27 billion ($200 million) World Bank loan for the provision of potable water in Lagos and Cross River states.
GOVERNMENT yesterday approved a fresh N27 billion ($200 million) World Bank loan for the provision of potable water in Lagos and Cross River states.
It, however, revoked the N1.58 billion Gombe-Biu road contract while vowing to impose "necessary sanctions" on the project handler for non-performance. The contract was awarded in 1999.
Minister of Information and National Orientation, Mr. Frank Nweke Jnr, while briefing State House correspondents after the weekly Federal Executive Council (FEC) meeting said the new loan would be facilitated by the International Development Association (IDA).
Repayable in 35 years, he explained that the loan has a 10-year moratorium with an interest of 0.75 per cent and a commitment fee of 0.5 per cent from the states.
Besides, Governors Bola Tinubu and Donald Duke would be required to issue Irrevocable Standing Order (ISO) of payment to the Federal Ministry of Finance to enable the ministry make deductions for payments from the states' monthly allocations from the Federation Account.
The minister said also that the loan would be used to provide water to Lagos metropolis and Calabar and environs, under the second phase of the National Urban Water Sector Programme.
Three states namely Kano, Kaduna and Ogun, Mr. Nweke noted, had already benefitted from a similar loan under the first phase of the scheme.
Asked why government guaranteed the facility in contrast to its resolve to curtail external borrowing by states, Mr. Nweke pointed out that FEC had considered streamlining of procedures on foreign loan in line with the Fiscal Responsibility Bill now before the National Assembly.
He noted that terms of the loan were not as stringent as those attached to previous loans which led to the heavy debt burden the country has faced.
"Government is committed to streamlining the procedures for obtaining any such credit from any multilateral agency. In this specific instance, the state governors were signatories to this credit and it has received council approval. If you look at it, it is coming for almost next to nothing. Some of the credits that got us into trouble in the past were obtained at very outrageous rates," he said.
Mr. Nweke also revealed that the meeting, chaired by Vice President Atiku Abubakar, approved revocation of the N1.58 billion Gombe-Biu road, awarded to Messrs Sinocon Limited in 1999.
The firm which was mobilised to the tune of N336 million, he noted, has done only 10 per cent of the job and scored the performance as "totally unacceptable."
He vowed that "necessary sanctions" would be imposed on the contractor, adding that if need be, the matter may be referred to the Economic and Financial Crimes Commission (EFCC).
Nweke said the administration will not condone latitude from any local or foreign contractor that failed to perform after collecting mobilisation fee.
He said FEC also approved N134.3 million engineering design consultancy for "B6, B12 and circle roads" at the Federal Capital Territory (FCT).
The project is expected to be completed in five month's time.