The Rivers State House of Assembly has approved the request of the state Governor, Hon. Chibuike Amaechi, to borrow US$280 million from the World Bank and African Development Bank (AfDB) to finance water supply and sanitation in Port Harcourt, the state capital. But the state chapter of the Peoples Democratic Party (PDP) has reacted against the approval, stating that Amaechi had mortgaged the future of the state by the volume of external loans he had taken.
While approving the request for the loan in its sitting yesterday, the assembly also ordered the state Commissioner for Water Resources to appear before it in its next sitting to give details of the loan.
According to the assembly, Amaechi had on June 23 written to the Speaker of the House requesting for approval of the loan from the AfDB and World Bank. US$80 million would be accessed from World Bank while $200million would be obtained from the AfDB.
The letter read in part: "It may interest you to note that the Rivers State government has successfully obtained approval from the Boards of the African Development Bank and the World Bank respectively for the Port Harcourt water supply and sanitation project. "The purpose of the project is to provide sustainable and safe access to clean and hygienic drinking water and sanitation in the city of Port Harcourt.
"The project which is being under taken by the Federal Ministry of Finance for un-lending to Rivers State is to enable the state government commence the project at the earliest possible time."
In their contributions, the lawmakers said the loan was a welcome development considering the wide criticisms the governor had received for lack of potable drinking water in the state. They, however, insisted that the state Commissioner for Water Resources should be invited to the floor of the House to give a detailed breakdown and scope of the financial implications of the loan.
The member representing Etche Constituency II, Golden Chioma, noted that the sum of $280 million was "a colossal amount to attract as low as three percent interest," and said while it was necessary for the executive to obtain the loan, the assembly needed adequate understanding of the charges on the various departments of the loan.
In his contribution, Onari Brown, (representing Akuku-Toru I constituency), said in as much as government was a continuum and Rivers people needed water, there was need for the assembly to take steps that would ensure judicious application of the loan. When the Speaker of the assembly, Otelemaba Dan-Amachree, put the matter to vote, members voted unanimously in support of the loan.
Dan-Amachree thanked the lawmakers for their contributions and approval of the loan. He directed the Clerk to inform the commissioner to appear before the assembly in its next sitting.
The loan, THISDAY gathered, has tenure of 22 years with an initial three percent interest. The first eight years would be interest-free.
In its reaction, the state chapter of the PDP noted that Amaechi had a penchant for collecting external loans and said it was a plot to mortgage the state and enslave the Rivers people forever.
In a statement issued by the Special Adviser to the state PDP chairman, Mr. Jerry Needam, the PDP it regretted "the far reaching consequences of these loans despite the huge resources of the State from internally generated revenue and federal allocations." It said: "There can't be any other reason for these incessant loans by an out-going governor than to punish the incoming administration and the state in particular.
"The party also wants to know what has happened to the US$100million and other loans also approved by same rubber stamp lawmakers for Amaechi about three months ago for same purpose," the statement said.
While calling on the World Bank, AfDB and relevant federal government agencies not to approve release of the loan, the party said, "Whether the loans have short or long term repayment conditions, it is immaterial at this point: for any society that lives on loans has no future and can never develop its own potentials. It's unfortunate this is all Amaechi can wish a highly prosperous State like Rivers State, the natural seat of oil and gas, a natural resource that has made havens of the nations that have it."
The PDP also alleged that the loan would be used to fund activities of the All Progressives Congress (APC) and 2015 elections.