Abuja-Kaduna Road: FG Slams 7-Day Ultimatum On Julius Berger

• Threatens to revoke another contract

The Federal Government has issued Julius Berger a final seven-day ultimatum to accept its proposal of N740.79 billion to complete the rehabilitation of the 82km section II of the Abuja-Kaduna-Zaria-Kano road or risk contract termination.

The Minister of Works, David Umahi, said the project, which is for the completion of a section of the Abuja-Kano Highway, has lingered for too long on the negotiations table and must be speedily resolved within the next one week.

Addressing journalists after the Federal Executive Council (FCE) meeting on Wednesday, Minister of Works, Senator David Umahi, said; “We have not had it so good with Berger because we’ve been negotiating with them since, September 2023, but yesterday we said this negotiation must come to a stop.

“We are giving them seven days if, after seven days, they don’t accept our offer, which is the highest so far in the country, we have no other option than to issue them 14 days termination notice under the contract laws.”

Umahi said FEC also announced that the Shagamu-Benin road is undergoing critical rehabilitation, while procurement processes are being finalized for its full reconstruction using reinforced concrete pavement.

On the Abuja-Kano road which was previously slated for a tax credit arrangement, the Minister said this will now be procured without such a provision, with the 162-kilometer Berger section already approved for ₦740 billion.

This is as he further said that works on the Oyo-Ogbomosho road, a project stalled for 18 years, will resume, while the Makurdi-Katsina-Ala road will undergo significant repairs soon.

According to him, FEC also tackled the inherited debt profile of ₦1.6 trillion tied to 2,604 projects, with a total contract value of ₦13 trillion, adding that to manage the backlog, the Ministry of Works has initiated a phased approach to project completion based on available funding.

Meanwhile, a statement signed by Orji Uchenna, the Special Adviser (Media) to the Minister of Works,  on Wednesday, said the Umahi also restated the Federal Government’s position when the new Managing Director of Julius Berger Plc, Dr Pier Lubasch, accompanied by the outgoing Managing Director, Dr Lars Richter, visited him in Abuja to introduce the new executive officer to the minister.

Unchemnna said the latest development follows an earlier threat by the Minister to revoke the contract which was awarded to the company in 2018 when former President Muhammadu Buhari was in power. The statement said while the Kaduna-Zaria section has been completed and the Zaria-Kano section is almost done, the Abuja-Kaduna section has unfortunately recorded only 27 percent progress in six years.

Speaking during the meeting, Senator Umahi accused Julius Berger of playing politics with the highway to make the current administration look bad, even as he expressed concern that the delay in mobilizing to the site, despite the Federal Executive Council approving the funds, is causing significant hardship for road users and reflecting poorly on the government.

According to him; “So if Berger is not doing it, then let’s have other people do the job and within the time that we can control price. We have had more than 20 letters from Berger on this. It is a ping-pong game from Julius Berger. The prices rose from N710bn to N740bn because of these delays. And if we continue the delays, it is the problem of the Ministry of Works.”

While also expressing disappointment that Julius Berger Plc, a company that has enjoyed years of support from the Federal Government and state governments, is not being realistic with its contract pricing, particularly given Nigeria’s current economic challenges, the former Ebonyi State governor said the contractor should either accept or reject the approved revised contract sum for completing the section within seven days, or risk contract revocation.

Furthermore, Senator Umahi said the government will not be held hostage by contractors’ demands for unrealistic pricing and additional costs, adding; “This offer is not subject to any condition. It’s not subject to any condition that is being dished out here. It’s taken as given after more than 14 months. I am sorry, I have to sound this way because there must be an end to negotiation.

“If anybody says there shouldn’t be an end to negotiation, then that person is not a business person. If you have negotiated for 14 months without any result, you should terminate the negotiation. Already several Berger projects have been terminated because the site has been abandoned. And we needed to do something about it because Nigerians are suffering. Nigerians are crying, and they are insulting the President. We can not allow that to be happening.”

For him, construction companies collaborating with the Ministry of Works must be ready to make sacrifices regarding value for money and realistic contract pricing to foster the essential road infrastructure revolution needed for the nation’s economic transformation.

Reacting to the Minister’s speech, the new Managing Director said the company would work on a speedy resolution of all the issues on the table, and expressed the hope that consensus would be reached for the project to resume without further delay.

In his remarks, the outgoing Managing Director explained that the courtesy visit was to introduce the new Managing Director of the company to the Minister and his management team.