The restructuring that saved Delta from financial quagmire — Gov Okowa
Explains what prompted ego aria kaka axiom of his govt
People castigated me because of Ogbe-Ijoh, Aladja crisis
Asaba Airport contractor failed Deltans
By Emma Amaize, Regional Editor, South-South, Festus Ahon and Ochuko Akuopha
DELTA State Governor, Senator Ifeanyi Okowa, has given an insight into how his government has been managing the finances of the state, saying that it was very complicated when he came in, but he embarked on some shake-up that made the payments on services and payback of loans to fall from N5.2 billion to N2.5 billion monthly.
Governor Okowa, who fielded questions from reporters at his last quarterly press briefing of the year, said it was the thorny financial situation that brought about the ego aria kaka (there is no money at all) axiom that his government became known for in the state.
He spoke on diverse issues, including Paris Club fund and withdrawal of the contractor handling the Asaba International Airport project, saying the state has suffered enough on the project..
On the management of finances, he said: “When we came in, we met a very difficult state. Many states were affected and as at today, if you to look at the allocation from Federal Allocation Committee, FAC, you know that deductions from FAC right in Abuja before the balance of our money is given to us, Delta state has the highest exposure and the highest deduction. “
“When the money hits our Zenith Bank account, there are further deductions that are made to service ongoing exposure, so obviously, where there was the cry of no money, everybody should understand. What I came here to do is to see how I can stabilize governance by moving government forward, but when there is no money, there is no money,” he stated.
The governor shed more light. “16 months from February 2016 to June 2017, more than half of oil in the state was stopped because of the Focardos Trunk Line that was destroyed. I continually made it clear to the people that this is the difficult situation that we have. There were two months, that was May and June 2016, when we received as low asN3 billion and N2.5 billion as allocation from FAC.”
“The luck that we had as a state is that we were able to quickly do some restructuring on our own before the Federal Government through the Central Bank of Nigeria, CBN, also facilitated the restructuring of debt of states. Through that restructuring, our payments on servicing and pay back of loans dropped fromN5.2 billion a month to about N2.9 billion a month of which about N2.5 billion of that takes place directly in Abuja.
We thank labour unions
“Our salary exposure, including salary for DESOPADEC, is over N7 billion; and when you have allocation of N3 billion or N2.5 a month, obviously, it is a huge challenge, but we must thank the labour unions. Everything was exposed to them, we did not hide anything, we agreed that what we should start doing was to pay next salary only.
“When we began to anticipate that the peace process was working and that things were going to improve ahead of time, I also started telling Deltans that because of the peace that has returned and in fact, the repairs on the Focardos Trunk Line, we were expecting an improvement in our allocation from the month of September. So it is a question of openness, it is not that we are where we are expected to be, but by September, we are expected to be better than where we were in the past and we also made it known to Deltans.
We’re no longer screaming ego aria kaka
“We are not shouting ego aria at the moment, but when there was no money, there was no money and that was it. Apparently, from the month of September, we started noticing some improvement. Improvement means we should be able to pay salaries, we should be able to pay contractors and I must appreciate our contractors, who worked even under that very serious condition.
“Some jobs were awarded and we did not anticipate that we were going to run into this crisis and they continued to work under that serious situation and all those contractors we have to keep paying and also award more contracts. We are managing our finances in the best way possible to ensure that there is continuity and I believe that it paid off for us and things are working,” he said.
The governor indicated, “We are hoping that there would be an improvement, but obviously we are better off today than where we were in 2016 and we are hoping by the grace of God that we will be better off in 2018.”
What Buhari told govs on Paris Club fund
Reacting to a question that President Buhari read a riot act to governors to pay workers with the Paris Club fund, he said: “I actually think in the first instance that President Buhari was wrongly quoted. The president can advise governors, but the president does not read riot act to governors. I was in that meeting where we went to pay him a visit and we talked about the issue of the Paris Club fund.
“The Paris Club funds are actually money owed state governments by the federal government, so it is not a question of the state governments being given money. It is a pay back, what he said to us that day was that he would have wanted all the money released to enable us pay all the salaries before December. However, he said the Minister of Finance, Minister of Economic Planning, and the Central Bank Governor needed to sit with the governors to work out a process for the payment – that was how he put it,” Okowa disclosed.
He added, “By God’s grace, we have been having releases from the Paris Club and the last release will make it 50 percent of the payment. The other 50 percent as agreed is supposed to be paid in the year 2018, also in tranches. The first 50 percent have been paid in four different tranches and that is the situation and we have been spending it to pay salaries, 50 percent for payment of salaries and 50 percent for capital projects. We know that we still owe a little money to workers, not workers’ salaries. We do not owe workers’ salaries but some of these deductions, I think we have just about N2 billion, which should be paid this week so that all that is due to workers and all that is due to contributory pensioners can be paid this week,” the governor explained. .
According to him, “N2 billion to Delta state may not sound very big , but to other states, it is a huge sum of money because there are some states in the federation that their total salaries is below N2 billion and their pension liability is also very small unlike this state. This state alone spends about a billion naira on pension alone, which is about 60 to 70 percent of the total salaries in some states. It is something that we have already met and we cannot change the situation because people are there and they have to be paid.”
Asaba Airport contractor disappointed Deltans
Speaking on the termination of Asaba Airport contract, he said, “It is important that we realise that the state is bigger than any individual. We mounted a lot of pressure on the contractor handling the project, but with all that, the work was still very slow; we did a 50 per cent mobilization and the project was supposed to be completed within a period of four months. We made the mobilization in October, 2015, but the job is less than 25 per cent done and the contractor has pulled out. We, as a government, have accepted the withdrawal of the contractor from executing the job, in few months time, the job will be re-awarded to a credible contractor with a track record of project delivery. You would have thought that the state government would have determined the process. In managing a contract process, it is very important that you understand it holistically because if you manage it wrongly and a contractor takes you to court, the usual thing is that the contract will stop while you are in court. That is not what any Deltan wish for the Asaba airport. We have already suffered enough concerning that project.”
“We know the state of the airport and how several things were happening here and Delta state was actually becoming a hub around this area, but we also know how it is today, so we needed to manage the process and God willing, the contractor himself decided to withdraw.
“There was an advanced payment guarantee; we called for that guarantee around September, October because it was coming to an end. I believe that the process actually led to the contractor withdrawing because he knew the implication of that guarantee that we had called. Therefore, there must be reconciliation because we must recoup all the moneys at the end,” he said.
Governor Okowa, who explained why he asked the Attorney General of the state and others to scrutinize the contracts and agreements entered with the contractor, instead of calling the Economic and Financial Crimes Commission, EFCC, said the government wanted to tie all the loose ends.
His words, “There were six different contracts by the past administration, but this particular contract for the reconstruction of the runway and some ancillary facilities was awarded for just a little over N5 billion, so the mobilization was about N2.5 billion, that is 50 percent because that was the contract the previous government entered into.
“So the man was mobilized with N2.5 billion of the contract sum, but there were existing contracts, which included construction of the runway for the airport building, airport fencing and some other facilities that are in the place and also part of the contract was to bring down the hill which blocked views of airplanes coming in to land. We are looking at the whole thing but the one that is very critical to us is the reconstruction of the runway for which the contractor was mobilized with N2.5 billion. It was in October 2015 that the government gave him money, he was supposed to finish the project in March 2016, but we are now in December 2017,” he added.
151 road contracts awarded, 60 completed, others ongoing
On construction of roads, Governor Okowa asserted, “A lot has been done in terms of road development, 151 roads have been awarded by this administration and about 60 completed, we have commissioned some and others are awaiting commissioning.”
He said that projects were being executed at different parts of the state, especially the riverine communities like Burutu, Bomadi, Oporoza, Patani, Okerenkoko, Ogulagha, Obotobo, Sokebolo, Yokri, among others.
Okowa disclosed that the flooding in Asaba, the state capital was being tackled through the construction of storm drains, adding that due to the multi-billion naira nature of the projects that will take away flood waters from the Direct Labour Agency, DLA, Jesus Saves, Delta Broadcasting Service, DBS, Uwechue, and Okpanam Roads, the projects would be executed in phases.
He expressed confidence in the ability of the state interventionist agency, DLA in rehabilitating failed road portions, saying that government would release funds to the agency to carry out its functions within the dry season.
Reacting to comments on the ramshackle Maryam Babaginda Road, Asaba, also awarded to the unsuccessful contractor of the Asaba Airport project he said the Ministry of Works and Justice had invited the construction company to a meeting to know the situation of things.
He asserted that that road was important, but his administration has not been able to do much on it to avoid legal issues with the contractor awarded the project before his assumption of office as governor.
Senator Okowa, nevertheless, said the attack on the Direct Labour Agency, DLA, was not justified, as the agency was doing quite a lot of work. “Their work time is actually in the dry season and we just entered the dry season. I believe that in the course of this month, we will be giving them some funding to go back to the various roads to rehabilitate those roads that are already failing.”
I’ve been insulted over Aladja, Ogbe-Ijoh crisis
The governor revealed, “I have received a lot of insult concerning the Aladja and Ogbe-Ijaw crisis. If you understand the management of human beings and management of communal crisis, it is not something you can just take decisions anyhow because of the issues concerned, loss of lives ad properties. I want to really get to the root cause and be able to find solutions, which will bring peace to the people. This crisis has been on for more than two decades, we have been very proactive in trying to address the issues and the people who go there know that. We have had several meetings, we have had to set up committees to look at the whole thing and the White Paper is ready now. If you are having a court judgment, the court judgment does not give you peace in many instances. We want to be able to create situations where people are still able to live with each other,” he said.
Okowa noted, “It has been a very problematic situation to resolve. At a point, the leadership of both communities had to be reporting twice a week to the military base, they were busy shooting themselves and the leadership had to be locked up by the police.
“Now the white paper is ready, but it is my prayer that the white paper itself will be able to bring peace. The youths are not being reasonable, but the leaders are, and the traditional rulers, but unfortunately, they appear to have lost a reasonable control of the youths of both communities.
“That is the challenge that we have. I am aware that at a point in time, the palace of the Ovie of Udu was vandalized because he said he was seeking a peace process. That shows the level of trouble we have in the place. When communities begin to lose control over their youths, it can become very dangerous and you have to manage it in the best way possible.
“These are security issues and it requires a lot of intelligence to deal with it. We are only being pushed to take the course of the white paper because we have not been able to get the youths of those areas to listen to the voice of reason. In the white Paper, you have to take certain decisions and these decisions may not engender peace and then we now have to take decisions that need to be taken. The security agencies will then be directed to do what they have to do. I have no reason to take sides with anybody just as in many things that I do, especially when it comes to governance.
“I want to be on the side of truth as much as possible. Therefore, we have not been taking sides. There are people who want us to take sides with them and it has been from good communities. They have accused the Secretary to State Government, SSG; they have also pointed fingers at the Deputy Governor. My SSG is an Urhobo and my deputy is Ijaw.
So, most times, even in meetings, if I cannot find myself fit in meetings, it is difficult for me to ask my deputy governor or SSG to preside. I am sure you are beginning to see how complex the situation is, it is not just a simple matter, but I believe too that the press can help to educate the people. The press can actually help us by reshaping the people. I have said and done all kind of things I need to do,” he asserted.