“We are reviewing the projects, in line with availability of funds, then make a proposal to FEC- Umahi
The Minister of works, Engr David Nweze Umahi, 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.
The Minister stated that, this is, in keeping with the vision of the Renewed Hope administration of the President, Asiwaju Bola Ahmed Tinubu, on road infrastructure revolution for economic recovery.
“But this would be done, subject to fund availability”. He stated
In a statement signed by Orji Uchenna Orji, Special Adviser (Media) to the Minister of Works, disclosed that, the Engr Umahi, made this statement during an interactive meeting with the contractors at the Ministry’s headquarters, Mabushi-Abuja, on 12th July 2024.
Engr Umahi 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 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”
The Minister, debunked misleading media reports that FEC stepped down inherited ongoing projects, and stated that neither the President nor FEC gave directions for inherited projects to be stepped down.
“The Federal Executive Council noted that 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.”
“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.” He further stated.
The Minister, reiterated the determination of the federal government, in bringing funding and budgeting innovations, that would fast-track road infrastructure development.
He noted 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 projects with huge procurement costs, but have little appropriation and with little completion milestone, 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, commended the initiative and urged the contractors to embrace the message of the meeting for the sake of Nigerians.
