By Hillary Asemota
The Minister of Works, Engr. David Umahi on Tuesday said that as part of strategic infrastructure development master-plan of the Renewed Hope Administration of President Bola Tinubu, the Federal Government has adopted workable measures to end the old order of unnecessary delays in the execution of road infrastructure projects by contractors across the country.
While addressing contractors, the media and other stakeholders on the paucity of funds on the over 2600 projects with inherited cost of N13 trillion, he said the Ministry has taken steps to rejig the monstrous contract price variation clause which has been a major clog in the wheel of progress of project execution over the years.
Minister, said that on assumption of duty in August 2023, the Ministry paid N2 trillion out of the approved certified works on the 2600 projects expressing the need for urgency of thinking realistically, creatively, innovatively, and thinking out of the square to overcome the funding challenges that face road infrastructure development across the country.
He reiterated: “When the Renewed Hope administration came on board on 29th May 2023, Mr. President inherited over 2600 ongoing projects from the past administration amounting to over N15 trillion, out of which only about N2 trillion was certified and paid. And so we now have ongoing projects of N13 trillion, including budgetary projects, NNPCL, SUKUK, Presidential Initiative Development Projects, other Tax Credit Scheme Projects of NLNG, MTN,Dangote, BUA, Mainstream and projects under EPC +F, PPP.”
While acknowledging that this cannot continued as there is no longer free money in the Ministry, he stated that the aftermaths of fuel subsidy and the forex forces affected drastically the contract cost elements and pricing of which Variation on Price (VOP) could not provide a remedy especially for jobs awarded so many years ago, and where VOP on contracts was sometimes hitting 500%.
According to him, looking for a solution, the Ministry sought for and got President’s Tinubu’s approval to give an envelope in the 2024 budgetary provision to keep all the inherited projects ongoing, believing that more funding of such projects could come by thinking outside the box.
He said: “The new projects under the 2024 projects, including the constituency projects of the National Assembly, also have poor budgetary allocations.”
Umahi, added that in tackling responsibly the challenges of funding, price variation, and delays in projects delivery, there was the need to introduce responsive approaches which were adopted as the Ministry’s measures to overcome the challenges of road infrastructure development in Nigeria.
Such measures, he said include but are not limited to reviewing the VOP clause to ensure workability in line with the economic realities, making it a policy that all contractors handling two carriageway projects (with the exemption of the 3 legacy projects) must first complete one side of the two carriageways and thereafter continue with the second part subject to availability of fund, advancement of funds after award of contract is subject to conditions contained in the bid document, going forward.
The other measures adopted, he said were that contractors must have a timeline for project delivery, and every contractor shall have a duty to maintain the road under construction until the entire project is completed and delivered.
A deadline shall be given for all ongoing projects, and with time, all projects that have no funding shall be stood down, but projects will be selected zone by zone or State by State for funding. In applying these measures, he emphasized that all contractors will be treated equally.
On the approval given by President to encourage indigenous contractors and to balance the competitiveness in the sector, he said: “One thing that is our policy is that no contractor in the Ministry of Works will be treated differently. Whether you’re an indigenous contractor or you’re a foreign contractor, insofar as you can turn cement to the right grade and place it rightly. You’re a good contractor; we check, and it’s good.”
The Minister noted the various projects completed by contractors and other major ones to be ready for commissioning from July, 2024 and directed the Directors in charge of each Geo-Political Zone to officially and publicly commission the various projects completed in their respective Zones. He further directed that committees made up of the Ministry’s Engineers and the Media correspondents be set up to pay inspection visits to the respective zones to assess the level of project performance in all the Federal Government projects being handled by the Federal Ministry of Works under the Renewed Hope administration.
