… “Accept offer or face contract termination” – Minister of Works warns Julius Berger
Oredola Adeola with agency reports
Following a halt in the completion of the 35.7km Bonny-Bodo Road project in Port Harcourt by Julius Berger Nigeria Plc, the Federal Government has agreed to provide an additional N20.5 billion and insisted that the remaining 16% of the project, which is being carried out under a tripartite agreement with Nigeria LNG limited, must be completed by December 2024.
Advisors Reports gathered that Julius Berger Nigeria Plc had in a letter addressed to NLNG and the Ministry of Works, requested an N28 billion variation on the 82 percent completed project, after claiming that the cost of N120 billion was consummated in 2015 when the exchange rate was N305 to a dollar and diesel was N350 per litre.
It has therefore hinged its request on the rise in exchange rate, construction materials, and diesel among others.
Meanwhile, the NLNG management, which had previously committed around N60 billion to the project, has strongly opposed Julius Berger Nigeria Plc, the contractor, asserting that all parties had agreed to a variation of the cost, and the project would not exceed the augmented amount of ₦199 billion.
Minister of Works, David Umahi, during a meeting with Lars Ritcher, Managing Director of Julius Berger, and members of the Bodo-Bonny Road Peace Committee, on Wednesday in Abuja, threatened that if the construction company is not ready to accept the offer, the contract will be terminated.
Engr. Umahi said that the government is willing to provide N20 billion out of the N28 billion that Julius Berger requested.
According to him, 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 deadline of December 2023, which has since elapsed.
Recall that in 2017, an agreement between the Federal Government, Nigeria Liquefied Natural Gas, NLNG, and Julus Berger on modalities for funding the project cost of N199.923 billion, without any further increase.
“If you do not accept the Federal Government’s offer by Friday and resume work on the site, the previously expired 14-day ultimatum for termination of project will be enforced.
“I want to let you know that we are the client. No contractor will dictate for this ministry, and there is no compulsory job that a particular contractor must do.
“We give you an offer. If you do not like the offer, you walk away. You don’t force us, or we don’t force you.
“Agreement of contractual relationship is a mutual understanding,” the minister said.
Mr Umahi said that had Julius Berger adhered to the project timetable, the project would have been completed on schedule before the impact of foreign exchange.
“Our position is very simple; we reject the conditions of Julius Berger totally and we 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,” he added.
Mr Umahi said the company should be humble in its dealings and exhibit solidarity during challenges.
Managing Director of Julius Berger in his response had explained that the company suspended work on the site to seek some clarifications from the ministry.
According to him, the company asked for the augmentations of N28bilion because at the time the contract was awarded the exchange rate was N305 to a dollar and diesel was N350 per litre.
“We will still require some outstanding materials; that means that the initial agreement can’t fly because the variation of the project is not sufficient, and the exchange rate is also not in our favour to compensate for the additional costs.
“That is why we decided to go back to our original proposal of the augmentation. Augmentation is a very normal process for all contracts,” Ritcher said.
Chief Abel Attoni, Palace Secretary, Bonny Kingdom, expressed gratitude to President Bola Ahmed Tinubu over the decision to complete the Bodo-Bonny Road project.
Attoni therefore encouraged the parties to be patriotic and make the necessary sacrifice for the actualisation of the project.
Advisors Reports’ check showed that the 35.7km Bodo-Bonny Road Project will be the first road to connect oil-rich Bonny Island to mainland Rivers State, runs through four local Governments in Rivers State, with challenging environmental factors like a 7km low-lying marshy land with tidal movements.
The communities expected to benefit from the projects are Bonny, Ogoni, Okrika, Eleme Andoni, and Bodo, all in Rivers State.
