Road Construction: FG Terminates Julius Berger’s Contract

•••Says Concrete Roads Will Save FG Over N640 Billion

•By Our Reporter

ABUJA – The Minister of Works, Engr. Dave Umahi, announced that the Federal Government’s decision to switch from asphalt to concrete for the construction of the Abuja-Kaduna-Zaria-Kano road will save over N640 billion.

The contract for the road project, initially awarded to Julius Berger, was recently terminated by the Minister due to alleged unethical practices and non-compliance with project terms.

Engr. Umahi emphasized that when the project is re-awarded, it will strictly adhere to the use of concrete, a move he described as more cost-effective and durable compared to asphalt.

The Minister reaffirmed the government’s commitment to delivering sustainable infrastructure, stressing that the adoption of concrete roads would not only reduce costs but also ensure longer-lasting roads for Nigerians.

The Minister expressed dissatisfaction with the project, when he appeared before the Ad Hoc Committee overseeing the construction of the road, chaired by Hon. Aminu Jaji. He criticized the work as incomplete and substandard, stressing that it had dragged on for nearly seven years.

Umahi further emphasized that, based on their assessment, the government’s decision would save over N640 billion of the N1.5 trillion initially requested by Julius Berger due to cost variations.He also emphasized that the road would be of higher quality and completed in record time.

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He stated, “Through my strategic approach, I was able to save the nation N640 billion by negotiating with Julius Berger. If we had agreed to carry out the project at the original cost of N1.5 trillion, we would have paid that amount. But now, we are saving the country over N640 billion while simultaneously improving the road’s design and architecture.”

He explained that the decision to terminate the contract was well within their rights, emphasizing that the issue with Julius Berger went beyond just financial concerns.

“The challenges with Berger were not solely related to costs. We engaged with the contractor extensively, discussing how the matter could be resolved, but they were uncooperative,” he said.

Umahi further clarified, “The issue with Berger is not just about money. We made it clear that this project must be completed within 14 months, and that it would be a fixed-price contract unless the dollar exchange rate exceeds N20 per dollar. They rejected these conditions and created obstacles for us.”

The committee questioned whether re-awarding the contract would be more expensive, especially considering that Berger had already completed some work. They also raised concerns about whether retaining the same contractor for the concrete road project might be a more cost-effective option.

However, Umahi firmly stated that there would be no turning back on the decision, emphasizing that the differences between the Ministry and Berger seemed irreconcilable.

He emphasized that it would be unethical to award the contract to Berger without opening it to competitive bidding. However, he added that Berger could still participate in the bidding process if they wished.

“We terminated the contract within our executive rights, and Berger was treated fairly. It is within my authority to make decisions on the choice of pavement materials. When we compare costs, we are in a secure position. As for the concrete, that is my decision. Concrete is more cost-effective, and we are also incorporating additional features like solar lighting and CCTV surveillance.”

“We were in negotiation with Berger for 14 months. it is within my right to terminate the job and we followed due process. I am happy the road was terminated from Berger. We had cases of kidnap on the road due to the condition of the road. We begged them to fix the potholes but they refused. Sections of the road were bad but they refused to do it,” he said.

The Committee Chairman, Jaji, directed that all relevant documents related to the project be submitted so they can be better guided in addressing the issue.

The Minister was required supply the committee contract agreement, certificate rates, evidence of payment made so far among others.

“If certificate was raised what was the value and the percentage of work covered. If you want a review, at what point do what the review or what point was the review done. All these are information we require,” a member of the Committee, Idris Wase, who moved the motion for the submission of documents said.

The Chairman also observed that there appeared to be discrepancies in the figures for the project presented by the Ministry and the contractor.

He said the Committee was not out to get anybody but to ensure the right thing is done in the interest of country.He said their mandate was to push the Ministry to ensure the job is done.

Meanwhile in an earlier meeting with the Committee, Julius Berger blamed the slow work on the road to poor and policy changes.

Speaking during the interactive meeting with the Committee, the management team of the company led by Mr Benjamin Bott said they had were being owed by the Federal Government.He said at a point, the work stopped because government came with the option of concrete instead of asphalt for the construction.

He also recalled that a point, the problem insecurity kept workers away for 11 months due a bomb blast in Kaduna. He said their workers were attacked.

The committee had also directed the company to supply all documents related to the contract from when it was awarded till date.

The Federal Government has officially terminated the contract awarded to Julius Berger Plc for the construction of the Abuja-Kaduna-Zaria-Kano road project. This follows a protracted dispute over project costs and implementation, with the total cost of the project now revised to N740 billion.

A termination letter was signed by C.O. Assam, Director of Legal Services at the Federal Ministry of Works, cited Clause 63 of the Standard Conditions of Contract (Road Works), Volume 1, 1999 Edition. The letter, which was issued on November 21, 2024, takes effect immediately upon service.

In the letter addressed to the Managing Director of Julius Berger, the Federal Government highlighted the contractor’s alleged uncooperative behavior and repeated delays as the primary reasons for the decision to cancel the contract.

•INDEPENDENTNG.