N150bn bridging finance facility not a loan – Delta Govt explains
April 28, 2022
Delta State Government has said it was seeking N150billion bridging finance facility to pay for the completion of some critical on-going legacy projects awarded by past and present administrations.
The government explained that the facility is not a loan, and would be used to take care of outstanding pension commitments to state and local government pensioners in the state.
Briefing journalists at a press conference on Wednesday in Asaba, the State Commissioner for Finance, Chief Fidelis Tilije, flanked by his Information counterpart, Mr. Charles Aniagwu, said the request was not particularly a loan but a discounting receivables from the Federal Government for Petroleum Subsidy payments made without recourse to the 13% derivation due to oil producing states from 2010 to date.
According to him, the funds totalling N270.6billion ought to have been received a long time ago but because the Federal Government could not pay the whole money in bulk, it became reasonable and logical that the oil producing states enter into an agreement for some part of it to be paid within 3 years and the other part within 5years.
“Having reduced the debt profile of the state from N151billion to N72billion, it is important that we have so many other contracts that we have awarded within the period of time and because it is a close out of a particular tenure it became very important that we ensure those legacy projects including the new State Secretariat building are completely paid for before we leave office,” Tilije stated.
He explained that the intention of Governor Ifeanyi Okowa was to ensure that on transition day, the debt profile of the state would be almost insignificant.
“So we thought it wise that rather than allow inflationary variables to dry down the proceeds of this recovery, it was important for us to discount some of them.
“Apart from the fact that we are paying old contractors, we are also ensuring that even the new contracts that was awarded which we refer to as legacy projects are also completed on time.
“The governor is also very mindful of the fact that pensioners are suffering. As at when we came into office in 2015, the total pension past dues was N35billion and we have been trying to reduce that outstanding dues.
“The state government approved that N300m monthly should be paid as past pension outstanding and just recently it was increased to N500million monthly.
“To further reduce this past pension obligations, from the facility, we will be spending N20 billion for state pensions outstanding of past dues and N10billion to the Bureau of Local Governments as grant to enable them also reduce whatever outstanding payments to local government pensioners.
He said there were some legacy projects that could no longer wait because of rising costs.
He listed some of the projects to include, Orere bridge, Ode-Itsekiri Bridges and roads, Koka flyover and interchange, Bridge across River Ethiope at Obiaruku, the Ughelli-Asaba Road, Flood control in Effurun and Warri, Owa-Alero drainage channels and projects being executed in the three new universities.
Also speaking, Commissioner for Information, Mr Charles Aniagwu said contrary to speculations in the social media, the bridging finance is not for any political reason but simply to address special needs in the state.
He said the funds will be paid to the state in tranches on quarterly basis.
“Knowing that money do not maintain stable value due to inflationary variables, we decided that the money works for the state today rather than losing its value tomorrow.
“Since there are lot of developmental needs that we need to address as a state, which will not only reflate our economy but will also make it possible to realise our intentions of bringing about renewal in our different communities and ensuring that our brothers and sisters who have retired over time both at the state and local government level are paid.
“Having taken that decision at the State Executive Council, we proceeded to the State House of Assembly to get their approval and they agreed that the decision is in the best interest of the state.
“We are giving you these details because it is in line with our transparency posture since 2015 and to make it clear that the season we are in has nothing to do with the decision we have taken before individuals will begin to think that we are looking for money for politics,” Aniagwu