Road projects: Umahi expresses worry over price differentials

Minister of Works, Engr David Umahi has tasked the leading construction giant, Julius Berger on the completion of ongoing road projects across the country.
Umahi’s directive was coming on the heels of the Federal Executive Council meeting with respect to all inherited and new projects being handled by a number of multinational companies, but delayed due to issues of price differentials and poor funding.
The Minister said the Federal Ministry of Works has opened a decisive discussion with Julius Berger on all the inherited and new projects handled by them with a view to appraising their performance and taking decisions on funding and milestones completion of all such awarded projects.
This was contained in a statement issued on Thursday by the Minister’s Special Adviser on Media, Uchenna Orji at the end of the crucial meeting of the ministry with the management of Julius Berger in Abuja.
Speaking on the resolutions reached during the meeting, Umahi reiterated the firmness of the Ministry on issues of price control, commitment of contractors to project execution, value for money, and uniform pricing.
The minister decried the unacceptable conditions of some of the inherited and new projects of all ongoing federal roads awarded to Julius Berger, which were within the economic corridor of the nation and which were being delayed due to issues of price differentials or lack of effective funding.
He listed the projects affected to include: the 82km by 2 dualization of section of Abuja-Kaduna- Zaria- Kano Highway currently handled by Julius Berger; phase 2 of Lagos-Ibadan expressway, whose pavement elements had been changed from asphalt to concrete; section 2A bypass at the 2nd Niger Bridge whose pavement element was changed to concrete; the Bodo-bonny road funded by NLNG Tax Credit; the under deck structural works at 3rd Mainland Bridge, Iddo Bridge and Carter Bridge.
He urged the contractor to be open to a mutually agreed modality for milestone execution and funding of the projects at reviewed rates as may be agreed upon and approved by the Federal Executive Council.
He said, “Our job is to develop this mechanism based on FEC directives, and engage with the Minister of Finance and Coordinating Minister of the Economy, and finally we take our recommendations back to Mr. President, and of course FEC for consideration.
“On the section of Abuja-Kaduna-Zaria-Kano road agreed to be handled by Julius Berger, he commended the quality of work being done but directed the contractor to stick to one carriageway at a time within the scope and conclude their works.
“The contractor was further directed to, within three weeks, fill the two carriageways with stone base and level it to alleviate the sufferings of road users.
“We agreed that this project, within their own corridor, will last for 14 months. Project execution should be deployed in four sections, and we’ll be paying Berger N20 billion every month to get the job completed.”
On the Lagos-Ibadan Expressway phase 2, Umahi said the Ministry had no choice but to determine the contract and ask the Bureau of Public Procurement for No Objection for selective tendering.
He recalled, “We changed the elements of the pavement from asphalt to concrete, and the total cost we came up with based on prevailing cost is N153 billion. But they are offering N258 billion.
“Since we’ve been on this since September 2023, we have no choice but to determine this contract. And then we ask BPP for No Objection for selective tendering, whereby we will be sending our own advice of N153 billion to BPP, and we send their own of N258 billion to BPP, and then we invite other contractors to also bid. This we will conclude within the next one month so that we can get that job concluded.”
On the Second Niger Bridge Bypass handled by Julius Berger he said, “one of the bypasses, which is 17.27 kilometers by two on asphalt, was awarded to Julius Berger. We changed the pavement elements to concrete and the cost that we came up with was N133 billion.
“Berger almost gave us more than twice our cost, which is N279 billion. We have disagreed with this cost at the time of negotiation since September 2023. We’ve also decided to get the project back to BPP and invite more contractors to bid because this is public fund”.
On the Bodo-Bonny project being funded by NLNG Tax Credit, the Minister expressed concerns that Julius Berger had mobilized back to site after an additional cost of N80 billon was approved for the work.
“We agreed on an additional cost of N80 billion, which will bring the project to about N280 billion fixed and non-varying with the unit rates agreed, and we agreed that this project will not increase in cost beyond N280 billion,” he said.
Road projects: Umahi expresses worry over price differentials