Nigeria’s federal government has ordered Julius Berger, the contractor handling the N200 billion Bodo-Bonny road construction to return to site within 14 days or risk termination of its contract.
Works Minister, David Umahi, gave the marching order at a meeting with the contractors as well as representatives of Nigeria Liquefied Natural Gas (NLNG) and royal fathers from Bonny Kingdom and other members of host communities in Abuja.
A statement by the Director of Information and Public Relations in the ministry, Ben Goong, quoted the minister as saying that the Bonny-Bodo road contract which was initially awarded at the cost of N120 billion in 2015, was later varied at N199 billion, with a completion date of December 2023, which had since elapsed.
The minister deplored the unilateral stoppage of work by Julius Berger, describing the action as unacceptable.
While rejecting in total the company’s request for variation based on fluctuations in exchange rate and increasing cost of material, the minister said government does not award contract based on exchange rate.
He pointed out that no contractor will come to government for a downward review of the cost of any project if the exchange rate becomes one naira to one dollar, adding that government cannot anchor contract cost based on exchange rates variations.
Umahi was particularly unhappy that the timelines for the completion of the project were not adhered to, maintaining that if the project was completed in December 2023, as contained in the contract agreement, issues of high exchange rate and increasing cost of materials would not have arisen.
He, however, promised that he would make a presentation to President Bola Tinubu for some augmentation to ensure that the project is completed on or before December 2024.
THISDAY learnt that the minister offered an additional N20 billion out of the 28.5 billion demanded by the company to complete the project, which is a partnership between the federal government and NLNG.
“I am making an offer to pay N20.5 billion out of the N28 billion and we still have to seek presidential approval on this. The company would have to state through a letter if they accept but by Friday, if I don’t get anything we would return to our standing which involves termination of the contract.
“Our position is straightforward, we reject Julius Berger’s conditions and ask Berger to please go back to the site to complete the project based on our offer. Our offer is unconditional and we say, accept or reject, so you cannot subject our offer to your conditions.
“Berger should note that our 14-day termination ultimatum has gone and we will make a proposal if you do not agree with this,” the minister said.
Earlier in his presentation, the Managing Director, Julius Berger Plc, Dr. Lars Richter called for the variation of the contract which he said had become necessary in view of the declining value of the Naira and rising cost of construction materials in the country.
The chief executive drew the attention of the minister to the time lag between when the contract was awarded in 2015 during which the exchange rate was N305 to a dollar, adding that the cost of building materials had since risen by over 1000 per cent.
In his contribution, the Deputy Managing Director of NLNG, Olakunle Osobu pointed out that the contract which is being funded through the Tax Credit Scheme is intended to complement the efforts of the current administration.
He called on all parties to the project to remain patriotic as well as make the necessary sacrifices for the actualisation of the project.
On their part, royal fathers of host communities led by Chief Abel Attoni, Palace Secretary, Bonny Kingdom, expressed gratitude to the president over the decision to ensure that Bodo-Bonny road is completed.
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