FG Revokes N870bn Road Contracts as 2,270 Projects Suffer Delay

The Federal Government has revoked the N870bn highway contracts awarded to three construction companies: Dantata & Sawoe, MotherCat, and RCC, for non-performance.

The Minister of Works, Dave Umahi, on Monday, ordered the termination of the contracts for sections II, III, and IV of the dualisation of Obajana-Benin Road as 2,270 road projects nationwide suffered delays.

Umahi axed the contracts 24 hours after issuing an ultimatum to the contractors handling the various road projects to sit up or lose their contracts.

Umahi upon assumption of office had stated that he inherited 2,600 uncompleted road projects but this figure has been reduced to 2,270 following the completion of 330 emergency projects after an appropriation of N300bn by the Federal Government.

The revoked contracts are put at the cost of N870bn at N2bn per kilometre after an initial review from N121bn.

The minister had on April 25 threatened to revoke poor-performing contracts.

Speaking on Sunday during the presentation of the routes of section 3A and the Trans-Africa Highway traversing Cross River through Ebonyi, Kogi, Nasarawa and Abuja, Umahi expressed dismay at the slow pace of work on the Akwa Ibom and Cross River – Calabar-Itu section awarded to three contractors.

Minister warns firm

While restating his earlier threat to axe non-performing construction firms, Umahi said, “If Julius Berger (Plc) fails to return to the site at the expiration of the seven-day ultimatum issued today (Sunday), we will terminate the contract. Sermatech Limited, an indigenous contractor, did a better job than Berger.

“Sustenance is based on the improvement of our roads. Contractors are playing tricks on our road construction; if we put one kobo in his hands he must give us an affidavit. The contractor must put his feet on the throttle. If you are climbing the hill, will you remove your leg from the throttle? No.”

He warned contractors who think it is still ‘business as usual’ when handling government projects that the old order had changed, insisting that no amount of lobby would save them if they failed to perform.

He reiterated the resolve of the Tinubu administration to complete all inherited road projects and the three legacy road projects under the Renewed Hope Agenda.

He added that other projects related to the three legacy projects would be assessed to know the extent of work and what needed to be done.

Announcing the termination of the N870bn highway contracts in a statement on Monday, the Special Adviser on Media to the Minister, Uchenna Orji, explained that the affected projects included the dualization of Obajana – Benin road, section II (Okene – Auchi) in Kogi/Edo State; the dualization of Obajana – Benin road, section III (Auchi – Ehor) in Edo State and the dualization of Obajana – Benin road, section IV (Ehor – Benin) in Edo State.

Orji said, “The termination of the said contracts became necessary given the inordinate delay by the affected companies in job performance and their failure, neglect and or refusal to fulfil their contractual obligations as required by the standard conditions of the contracts.

“This has affected the timely completion of the projects and thus resulted in the expiration of the contracts by effluxion of time.

“The projects, which were awarded on 3rd December 2012 were advertently abandoned by the contractors and no genuine commitment or good faith was shown towards executing the projects after accepting the considerations offered by the Federal Government and thereby exposing the road users to untold hardship due to the deplorable condition of the projects.’’

Continuing, he added, “The honourable minister has, therefore, directed the engineers in charge to take necessary steps to enter into both the sites and the works and take the same over from the affected companies.

“He further directs the engineers concerned to, upon doing the needful, arrange with the affected companies for a joint measurement of work so far done by the said companies, preparatory  to taking over the sites from the said companies, and this directive is without prejudice to the exercise  of other rights of the Federal Government  under the contract.”

Orji further recalled that the minister had earlier warned that the Federal Ministry of Works under his watch would not condone “Acts of unseriousness and sabotage by contractors whose plan is to become a clog in the wheel of progress of the Renewed Hope administration, which the minister said was determined to change the ugly narrative of Nigeria’s road infrastructure.

“The minister further warns that going forward, the government will not hesitate to terminate all projects that are funded, but are non-performing.”

The affected contractors could not be reached for comments on Monday.

MotherCat Construction Company and Dantata did not respond to calls made to their listed telephone lines.

RCC, on the other hand, had no phone number on its website.

But an official of the Association of Road Contractors said the minister had compounded the current situation in the sector.

The contractor, who spoke on condition of anonymity for fear of being blacklisted, challenged the minister to showcase the kilometres of road projects completed since he assumed office.

He added that most of the projects were moribund because of the cost of inflation and the minister had not proffered adequate solutions to resolve the issue.

He stated, “You should ask the minister how many kilometres of road he has done since he assumed office. If he says they are completing the roads, he should show us the roads. Instead of solving problems, he is compounding them, to the best of my knowledge.

“Ask him about the projects inherited, and how many have been completed, most of the projects are moribund because of the cost of inflation. So, how many of them has he genuinely resuscitated by doing proper augmentation and re-scoping?

 “We have written letters to the minister. Does he honour letters or even respond to them? It wasn’t like this during (ex-works minister Babatunde) Fashola.

“They don’t even honour letters written to them. We are watching; just drive around the country and check how many contractors you are seeing on-site.’’

He accused the minister of bullying contractors, noting that most contractors were not happy with the former ex-Ebonyi state governor.

“The next thing is that they bully people and harass them. Most contractors are disappointed as I speak to you and even in the ministry.

“The FCT minister is working and we are seeing the road commissioned. The minister only goes to the site to harass contractors. We are only counting days now and just watching him. Eighty per cent of these contracts are not viable,’’ the official declared.

The current government, through the Federal Executive Council,  had so far awarded 51 contracts worth N6.27tn for procuring, constructing and developing various infrastructural projects across the federation in eight months, encompassing the construction of roads, bridges, train systems, and airport infrastructure.

The government awarded 43 road projects and three airport contracts, among others, between October 16, 2023, and May 14, 2024.

 A breakdown of the projects showed that during the FEC meeting held on May 14, the Ministry of Works secured an approval of N89bn for the reconstruction of Koton- Karfe -Abaji road (Abuja 12 bound), along the Abuja-Lokoja route in Kogi state.

The FEC also on the same date awarded a contract worth N120bn for the equalisation of Lokoja- Benin road, Okpela Section, Lokoja-Benin’ dualised Auchi section. The road will be financed by BUA Cement under the tax credit scheme.

This decision was reached during a lengthy meeting chaired by Tinubu on May 14, during which 21 significant policy initiatives were unveiled.

Section two of the Lagos-Calabar coastal highway was also awarded on the same day at a cost of N1.6tn while N546bn was apportioned for roads and bridges in Kaima- Tesse, Kwara State, Benin-Agbor, Benin Byepass and Ngaski-Wara in Kebbi State and N230bn Construction of a 37-kilometre Kano Bypass road.

On February 26, the Federal Government approved N1.067tn for the first phase of the highway’s construction.

Umahi explained that the section, a 47.47 kilometres dual carriageway of five lanes on each side and a train track on the middle, is part of the 700-kilometre road spanning nine states and with two spurs leading up north.

The Lagos-Calabar coastal highway project, designed to stretch 700 kilometres and pass through nine states, was awarded to Hitech Construction Company Limited on an Engineering, Procurement, Construction, and Financing arrangement, where the bulk of the risk falls on the contractor.

On March 26, Umahi said FEC approved N1.495tn contracts for 29 roads and bridges across the country.

Umahi stated, “Today, the Federal Executive Council considered and approved 29 roads and bridges totalling N1.5tn. After going through the Bureau of Public Procurement, they were all approved by FEC, and we got Certification of No Objection.

“Council also approved the Bukuru bridge across Katsina-Ala River in Benue State. It is a twin bridge matching the dualised road there, and each of the bridges is about 850 meters. Put together, it is 1.7km and costs about N83.799bn.

“FEC also approved a road from Shaki to Okerete in Oyo State. The road is 91.432km and will cost N144bn,’’ Umahi explained,

Also in March, N992.23bn was awarded for the rehabilitation and construction of seven road projects.

The FEC also approved N5.5bn to fund the construction of access roads serving communities along the Abuja light rail project.


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