FG To Engage On Contract Review, Cost Augmentation For Inherited Ongoing Projects Subject To Funds Availability

• Minister Of Works Debunks Misleading Media Report That FEC Stepped Down Inherited Ongoing Projects

In  keeping  with the vision of the Renewed Hope administration  of the President of the Federal Republic of Nigeria, His Excellency President Asiwaju Bola Ahmed Tinubu GCFR on road infrastructure revolution for economic  recovery, the Honourable Minister of Works, His Excellency,  Sen. Engr. Nweze David Umahi CON has assured contractors  of the Federal Government’s willingness to engage on contract review and cost  augmentation on the inherited  ongoing  projects in view of the geometric rise in cost of contract elements caused by the inherited challenging  economy. But this would be done subject to fund availability.

A statement issued by Hon. Barr. Orji Uchenna Orji, Special Adviser (Media) to the Honourable Minister of Works, quoted that he made this statement during an interactive meeting with the contractors at the Ministry’s headquarters, Mabushi-Abuja, on 12th July 2024.

The Honourable Minister said that the decision for Windows to review and augment the cost of inherited  ongoing projects was borne  out of Mr. President’s magnanimity and commitment to completing  all inherited and funded  ongoing federal government  road projects nationwide.

He said, “It was Mr. President, out of his very exceptional magnanimity, that directed that all inherited projects should be made alive through appropriation, promising that he was going to be looking for ways to fund the projects, even outside the budgetary provisions, through the National Assembly.”

He further said, “What we are doing now is to review the projects in line with availability of funds and make a proposal to FEC. If such a project has attained about 80% completion, then we make a proposal to FEC that in subsequent appropriation, money should be made available, and such projects should be made a priority, so that it could be completed.”

He debunked misleading media reports that FEC stepped  down inherited ongoing projects and stated  that neither  the President nor FEC directed  that inherited  projects  should  be stepped down.

“The Federal Executive Council noted in the review we are doing, and in some cases a few new contracts that we are seeking approval to award, that there is a very large disparity between either the increase in contract costs or the project cost, between what we are looking for and  the available funding.”

He explained further “The subject matter in fact was not about the unit cost, because we are very satisfied as a ministry with the costs that we have offered to you, which are actually the unit cost in line with the realities of the market prices.  Some of these projects were awarded 18 years ago, some 10 years ago, 5 years ago.”

The Honourable Minister further  reiterated  the determination  of the federal government in bringing funding  and budgeting  innovations that would fast-track road infrastructure development, noting  that FEC had directed the Federal Ministry of Works  to work with the Federal Ministries  of Finance and Budget & National Planning to put forward proper budgetary  estimates for the 2025 financial  year for those projects  that were not appropriately budgeted  for but have attained  probably 80% completion so that such projects might  be completed and delivered.

But, he noted that projects with huge procurement  costs but have little  appropriation and with little completion milestones would be reviewed in line with section 51 of the Special Conditions of Contracts.

On issues of Variation  on Price (VOP), he stated,  “All projects we awarded in 2024 will not attract any VOP. And we’ve made it as a policy that such projects can not get any variation. However, within the course of the year and the project execution, if there are issues (God forbid) that do change the basic market prices of construction materials to a certain extent, we will revisit the issue of VOP. And it will not be selective.”

For projects with dualization, the Honourable Minister directed that all contractors with such projects must as a matter of policy concentrate and first complete one carriageway and turn it over for public use and must within the period maintain the other carriageway for public use.

The Permanent Secretary, Yakubu Adam Kofarmata, PhD, commended the initiative and urged the contractors to embrace the message of the meeting for the sake of Nigerians.

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