The chairman of Okowa’s College of Commissioners and state commissioner of Finance, Sir Fidelis Tilijie and his counterpart in the information ministry, Mr Charles Aniagwu, outlined the motives for the loan being granted by Zenith Bank, an indigenous commercial bank.
They explained that the Okowa administration was encouraged to seek legislative approval of the loan against the backdrop of the expected statutory accruals from the Federation Account as part of the 13 percent Derivation Fund for oil producing states of the federation.
The finance commissioner said that following agreement reached with the Federal Government on the refund of years of erroneously deducted funds belonging to the benefitting oil producing states, Delta is due to receive two tranches of N257.6 billion and over N130 billion over the next five or six years.
Therefore, in order to avert the likely depreciation of the value of the expected monies from the Federal Government in the light of steadily riding rates of inflation, the state government decided for the N150 billion loan to enable the government further drastically lighten the huge burden inherited by the Okowa administration.
The finance commissioner said that 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, the oil producing states entered into an agreement for some part of it to be paid within three years and the other part within five years.
Tilijie said, “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.
“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. 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.
Tilijie assured that the bridging loan facility would be prudently used to offset debts owed to many contractors with certificates for various completed projects, especially the “legacy projects of the Okowa administration”, including the State Secretariat Complex Casaba, Orere River Bridge, the Ode-Itsekiri Bridge, the Koka Junction Asaba flyover and interchange, Bridge across River Ethiope at Obiaruku, Owa-Alero drainage channels and projects being executed in the three new universities.
Also captured is the completion of the strategic Asaba-Ughelli dual-carriage way that passes through Ogwashi-Uku, Kwale, Isoko to Ughelli from the state capital.
About N50 billion of the requested loan would also go into the payment of entitlements of state pensioners as well as further assist the Bureau of Local Government.
Part of the N150 billion loan would also be used to fund the Warri/Effurun drainage project, the finance commissioner stated, explaining that the loan facility was really of soft nature because it was being offered on the strength of the said accumulated derivation fund wrongfully withheld from Delta and other benefiting states, which serves as a definite and sustainable revenue source for defraying the loan facility.
He added that to government was not discounting the expected outstanding funds from Federation Account 100 percent because the Okowa administration was mindful of the succeeding administration in 2023, saying that it was a way of saving for the incoming government as well as ensuring that the present government left behind only an insignificant amount as debts.
The State House of Assembly, led by Speaker, Hon Sheriff Oborevwori, on Monday gave Governor Okowa the go-ahead to obtain the N150 billion commercial bank bridging loan facility.