WORKS MINSTRY MOVES TO REJIG HYDRA-HEADED CONTRACT VARIATION CLAUSE, TAKES STEPS TO END DELAYS IN PROJECT DELIVERY

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.

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