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Tag: contractors

  • Fed Govt goes tough on contractors

    Fed Govt goes tough on contractors

    Works Minister Dave Umahi has said the Federal Government is determined to ensure the timely and cost-effective completion of key infrastructure projects.

    He emphasised the importance of alleviating the suffering of road users on many roads across the country.

    Umahi gave the assurance after a meeting with the management of Julius Berger Nigeria Plc in Abuja.

    The minister said the ministry was set to review and reevaluate some ongoing projects involving the presentation of a Certificate of No Objection to the Bureau of Public Procurement (BPP) for the affected projects.

    Umahi highlighted the discrepancies between the ministry’s cost assessments and those presented by Julius Berger Plc and some other construction companies handling ongoing projects.

    Revealing the outcome of the meeting with Julius Berger, Umahi said: “You are aware that we had dismembered this job and gave Berger 82 kilometres by two, which is 164 kilometres, to complete on asphalt. We gave Dangote about 38 kilometres by two to complete on concrete. The Tax Credit and BUA got about 17 kilometres to complete the Tax Credit on concrete.

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    “We have also gone back to the site in the last 10 days to flag off the re-engagement of these three contractors. Work is ongoing. However, we are not very happy with the pace of work by Berger, but it’s good quality work.

    “So, we have discussed: one is for Berger to stick to one carriageway within their scope and conclude. But while doing that, they should be able, within the next three days, to fill all the potholes with stone base.

    “…We’ve given directive to the director in charge of that project to get some contractor to fill it and then do a memorandum to the Permanent Secretary so that we can pay from Bill I.

    “The lives of the people are very important. We abhor the kidnapping going on because of these potholes. We have also asked Berger to review what the independent consultant did, which we had already agreed on.

    “There’s a total of N710 billion, out of which the last administration paid N391 billion and we are to pay about N320 billion or thereabout for the remainder.

    “They will come back to us because we don’t have time to waste. We have to be very responsive to the society. We have to gauge the mood of the society. We have to do everything possible to take responsibility and discharge our duties.

    “So, they have to come back, and we must conclude that. We agreed that this project, within their corridor, will last 14 months. It will also be deployed in four sections, and we will pay them N20 billion every month to get the job concluded.”

    The minister also cited Section Two of the Lagos-Ibadan expressway as another subject of contention the government was working to resolve quickly.

    He said other construction companies might be invited to bid for the project.

    Umahi said: “On the Lagos-Ibadan, Section Two, they have concluded Section One a long time. We’ve been renegotiating with them on Lagos-Ibadan since September last year.

    “We’ve come to a crossroads where our total cost – we’ve 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.

    “They’re offering N258 billion. But because we’ve been on this since September, we have no choice than to determine this contract. They asked the 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 invite other contractors to also bid.

    “This will conclude within the next one month so that we can get that job concluded.

    “The two sections of the completed Second Niger Bridge were also discussed, considering that the bridge has not been deployed as the construction of the two bypasses is being negotiated.

    “So, the last administration awarded Section A to them, which is 17.27 kilometres by two on asphalt. We changed the elements to concrete and the cost that we came up with was N133 billion. But they gave us twice the cost, which is N279 billion.

    “We have disagreed with this cost. The time of negotiation was last September. We’ve also decided to get the project back to BPP and invite more contractors to also bid because this is a public fund.

    “The BPP would be the determinant before the Federal Executive Council (FEC). So, if they quote the N279 billion or review it downwards and submit it to BPP or to us and we submit it to the BPP, that would be encouraging so that other contractors that have the same capacity will also be able to bid.

    “It is the same issue on RCC’s Section B, which we have offered N163 billion; their own is N224 billion. So, we are taking all of them back to the BPP. N

    “On Bodo Bonny, we have been on this project for the past nine months. We’ve even taken the matter before the Chief of Staff to Mr. President, together with the National Security Adviser (NSA) and together with the Honourable Attorney General because of the sensitive nature of this project.

    “We want the project to be completed, you know, and it’s being funded by NLNG on tax credits.

    “Finally, we agreed on an additional cost of ₦80 billion, which will bring the project to about N280 billion fixed and non-varying with the unit rates agreed. We have not agreed on the timing because we said December 15.

    “They’re coming up with 16 months, which is not acceptable to us. We believe by the time they come back (on Wednesday), we will be able to extend our own expected completion period, but not 16 months.

    “So, we should be able to agree this evening and then close the day so that we can send it to BPP and then to FEC to enable tax credit of NLNG to fund the project.

    “We had already agreed that the price will not vary. The unit prices are complete. We gave Berger 100 per cent of what they asked and we agreed that this project will not increase in cost beyond ₦280 billion. So, this is what we’ve discussed.”

  • Contractors get three months to fix 260 fed road projects

    Contractors get three months to fix 260 fed road projects

    Thirty-Seven contractors handling the 260 emergency federal road projects across the country got a three-month deadline to deliver or risk termination of contracts.

    They were given the marching order through their representatives during a meeting with the Minister of Works, Dave Umahi in his Abuja office.

    Most of the defaulting contractors are handling emergency road projects in Yobe, Jigawa, Zamfara, Benue, Kogi, Abia, Anambra, Imo, Akwa Ibom, Bayelsa, Cross River and Rivers states.

    The minister reiterated that it is not obligatory for government to pay mobilisation fees to contractors for emergency road projects.

    According to Umahi, the three-month deadline order to complete and deliver projects is required by the Standard Conditions of Contract of the Federal Ministry of Works, failing which the contractors risk termination.

    In a statement by his media aide Uchenna Orji, the minister explained that the ultimatum became necessary because the Renewed Hope emergency road projects were funded through the 2023 Supplementary Budget to provide immediate intervention on critical, completely failed Federal roads nationwide.

    The minister, who noted that the 37 contractors have made little or no progress since the roads were allocated to them, warned that they must mobilise effectively to the site by tomorrow or face the consequence.

    The statement reads: “If after the deadline for mobilization to the site, any contractor fails to comply, the job shall be terminated by effluxion of time as the contract is for a time limit of 3 months.

    “Any contractor whose job has stayed for more than 3 months without completion after the issuance of award letter must seek and obtain approval for extension of time from the Federal Ministry of Works.”

    The minister warned the defaulting contractors that the projects awarded to them must be delivered within three months, adding that no excuse, including security challenges, or lack of mobilisation funds, will justify the delays causing road users to suffer.

    He threatened that erring contractors will be blacklisted for hindering the administration’s efforts to revolutionize road infrastructure for economic prosperity.

    The statement reads further: “The people are suffering, the President is having sleepless nights in his efforts to fix our road infrastructure to help our economy, and people will be given jobs and they are telling us stories.

    “There have been jobs awarded by this ministry in the past and money paid, and the contractors would hold the money, and they would say it’s a security problem.

    “Didn’t they know about the security situation before they got the job?”

    On mobilisation fees, the minister stated that under the Standard Conditions of Contract, mobilisation funding is not a prerequisite for contractors to begin work on-site.

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    According to him, it is at the ministry’s discretion and will only be provided to contractors who commit, through an affidavit, to complete the job within three months of mobilisation.

    He added: “Our new policy is that if you want mobilization and we are happy to give you, you will abide by the conditions. One is that there will be no review of any component of the mobilisation given.

    “Two, we will give you 30% and you will do 30% of the work before we can give you another money. So, mobilisation is not compulsory. Again, emergency projects are not mobilised.

    “The rule is that in emergency projects, you will go and do it 100%, and then you submit your papers. We now pay you 80% and send your documents to BPP. When they approve, we pay you the 20% balance”.

    The minister also directed the Federal Controllers of Works to ensure proper supervision of projects in their sites and be abreast with the contract awarded, amount, date of award, timeline, review date, extension of time, argumentation granted and whether the contractor is on site.

  • Delta to engage local contractors in projects

    Delta to engage local contractors in projects

    Delta State Governor Sheriff Oborevwori has assured local contractors of his administration’s commitment to engaging them in project execution across the state.

    He, however, said the quality of work done by local contractors would determine the level of patronage from the government.

    Commissioner for Works (Highways and Urban Roads), Mr. Reuben Izeze, said yesterday after inspecting ongoing construction work on Orere bridge that the bridge, upon completion, would link up 30 communities in Ughelli South Local Government to other parts of the state.

    He hailed the contracting firm for the job done so far and said Governor Oborevwori’s administration would patronise contractors with proven competence and capacity to deliver good projects.

    He said: “I am very pleased with this project, the famous Orere bridge, because it’s something I advocated over the years.

    “Let me state unequivocally that I am impressed with what I am seeing on ground, considering that the contracting firm, Obakpor Engineering, before now had been one of those companies that had been accused of cutting corners, not having the professionalism to deliver on projects.

    “But here we are standing across the project that is being handled by Obakpor Engineering and you will think you are standing on Trans-Warri Ode-Itsekiri bridge that is being handled by a foreign firm.

    “What he has done so far is that he is bridging the gap between our indigenous contractors and their foreign counterparts.’’

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    “One of the cardinal legs upon which the MORE Agenda of Governor Oborevwori stands is ‘Opportunities for all’ and it means everybody will have the opportunity to prove themselves.

    “The quality of your work will determine how much patronage you will receive from the government. I can say categorically that Obakpor Engineering has improved tremendously in terms of manpower and equipment.

    “The contractor has said he will be out of site completely within the next nine months and this goes to show that Obakpor Engineering has come of age and they will continue to improve as we move forward. It is a fantastic job, but like I will always say, there is room for improvement.”

    On the length of the bridge before the river, Izeze said the bridge was designed to ensure high flood waters did not impede usage of the bridge when there was flood around the corridor.

    “If you understand this terrain, the over 30 communities that make up the Ewu Kingdom in Ughelli South are entirely an Island and they don’t need much rains before the flood starts.

    “To get the proper sloping, the bridge is designed such that there is enough distance before the river so that by the time flooding starts, it will not disturb the usage of this bridge,” Izeze said.

    State Director of Highways, Mrs. Juliet Aboloje, said Orere bridge is 500m cutting across 25 spans of 20metres each with access road of 4.3km and 1.36km arterial roads.

    The contractor, Mr. John Oguma, said the project was delayed by yearly flooding, causing a loss of four months of active work annually.

  • We won’t accept shoddy jobs, Umahi warns road contractors

    We won’t accept shoddy jobs, Umahi warns road contractors

    President Bola Ahmed Tinubu will not accept substandard road projects, Works Minister David Umahi yesterday warned contractors handling federal roads.

    He said the resolve of the President informed his decision to suspend Messrs. Reynolds Construction Company  (RCC) Nigeria Limited, the contractor handling the 15-kilometre Eleme-Onne Junction on the East-West Road, Rivers State during his unscheduled inspection visit to site at the weekend.

    The minister suspended the contractor over alleged violations of the construction specifications.

    However, in a statement by his spokesman, Uchenna Orji, the minister ordered the contractor back to site and resume work.

    The decision followed the resolution the issues at stake during a meeting between the minister, the management team of the Works Ministry and RCC representatives.

    Umahi reiterated that any further work on the project must strictly adhere to the contract specifications.

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    The statement reads: “The minister had ordered the suspension of work on the project due to substandard jobs and invited the management of the company to report to the Ministry for resolution of technical issues.

    “The minister further directs the contractors handling the project to resume work on the four sections of the project and in strict compliance with the contract specifications.

    “They are also required to liaise with the permanent secretary and the director in charge of construction to engage with the representatives of the host communities on issues bothering on alleged infringement on the contractors’ right of way which according to them slows down the project.

    “The Minister of Works is determined to see to the speedy and quality delivery of federal  government’s jobs across the nation in line with the vision of the Renewed Hope administration of the President of the Federal Republic of Nigeria, President Asiwaju Bola Ahmed Tinubu and he is unbending in his resolve not to accept the delivery of jobs that fall short of standard”.

  • Road project contractors get greenlight on N1.5tr payment

    Road project contractors get greenlight on N1.5tr payment

    • Minister frowns at workers quitting sites during Yuletide

    These are best of times for road contractors being owed by the Federal Government.

    They are to be paid outstanding claims from the N1.5tr made available by the Federal Government.

    Works Minister David Umahi, who dropped the hint yesterday while addressing a gathering of contractors and senior ministry officials.

    The minister, however, put a caveat – “before the debt is settled, contractors must provide documented proof of the debt to the Verification Committee of the Ministry of Works”.

    The contractors claims, Umahi said, would be escalated to the Bureau of Public Procurement (BPP), the Presidential Economic Team (PET) and the Federal Economic Council (FEC) for final approval.

    He affirmed that every documented and verified debts would be settled, urging contractors to address the matter with the urgency it demands.

    On the significance of verification, Umahi cited instances where the ministry was unaware of payments to contractors.

    Besides, the minister said the verification of claims became imperative to convince the President, the National Assembly and the PET on the need to settle the N1.5 trillion debts.

    Umahi also said that the government plans commit his ministry to the delivery of 150 kilometres of federal roads in each state and the Federal Capital Territory (FCT).

    He told the contractors that the government was addressing the issue of the outstanding debts and taking measures to address funding challenges.

    The minister, who expressed disappointment over the halt in work during the Yuletide period, ordered the contractors back to the sites to compensate for lost time.

    He said: “Some contractors closed sites very early in December and resumed late in January, thereby losing close to a month of quality time.

    “That is not desirable, we will not allow it to happen in 2024. We will not allow contractors to leave sites at a very critical period when we need them.

    “Going forward, the inherited debt has been escalated to Mr. President and the National Assembly is aware. What we have done is to set up six Verification committees, one per zone.

    “So, you are expected to come forward for the verification of the debt with proof from scratch how the debt was generated and the verification team has been empowered to look at it and say ‘yes or no’.

    “So, I would like you to take this very seriously. I’m happy that Mr. President is aware of this and he is waiting for results. We have to do this because the N1.5 trillion debt which we inherited, we need a lot of facts to convince Mr. President, the National Assembly and the Economic Team of Mr. President, of which I’m a member, so we are already exposed to solving this problem with the verification.

    “But, I want to give you the assurance that every verification with merit will definitely be paid. But, we need to be able to defend it.”

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    Umahi hinted that the bureaucratic obstacles hindering the swift processing of contractors’ certificates have been eliminated through the appointment of a dedicated desk officer to address the matter.

    He told his audience the bottlenecks hindering the ministry from effectively tracking payments to contractors have been removed.

    He commended some of the contractors, who he noted, responded positively to his appeal to remain on sites during the Yuletide, adding that such cooperative efforts deserving of emulation would be duly rewarded with expedited payment.

    He also warned the contractors handling the Lokoja-Benin Highway project to return to the site without further delay, urging them to emulate their counterparts in the north by returning to the site.

    Umahi said: “Please go back but if you can’t base it on trust, we will take the contract from you”, he warned.

    On the delivery of 150 km of roads yearly, Umahi explained that the government is conscious of the fact that its contractors across the country are capable of delivering it.

    According to him, with proper planning, the contractors in each state have what it takes to carry out the job in record time.

    He explained that the 150 km of roads that will be funded with the ministry’s budget do not include the special projects being undertaken by the Nigerian National Petroleum Corporation (NNPC) Ltd and the private sector operators, among others.

    He said with a state having about four or five contractors, if the proposed road is dualised, that would make it 75 kilometres that would be divided between the contractors for the year.

    The minister said: “We are looking at can we complete 150 kilometres of road in each State and the FCT in 2024?

    “That’s just about over 4,000 kilometres and we are not talking about palliatives, this is what we are looking at. Let us just start and I am sure that will definitely get there.”

    The minister also hinted of a plan to deploy the directors of the Federal Road Maintenance Agency (FERMA) in the geopolitical zones as part of the agency’s restructuring.

    He said the deployed officers have a mandate to rid the highways of markets and other activities obstructing vehicular movements.

  • Delta clears N30b debt owed contractors

    Delta clears N30b debt owed contractors

    Delta State Government yesterday said 30 billion naira has been released for the payment of outstanding certificates owed contractors.

    Works Commissioner (Rural and Riverine Roads) Mr Charles Aniagwu disclosed this during an interview with reporters after inspection of ongoing projects at Emevor and Evwreni in Isoko North and Ughelli North Local Government.

    He hailed Governor Sheriff Oborevwori for the approval, saying it would encourage contractors to put in their best to deliver their projects on schedule.

    He said Governor Oborevwori approved the payment N30billion to the contractors. “This is why you are seeing that a lot of our contractors have moved back to site.”

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    He added: “We are already making plans in no distant time to also continuously pay so that contractors can continue to work and our people can continue to get value for the jobs we have awarded for the ease of movement across 25 local governments.”

    “We are not having any challenge and I am sure the contractors are doing fine and areas where they need us to fast track payment of interim certificates we have assured them that we will speed up the process so that at the end of the day nothing stalls the work they are doing.”

    Aniagwu said the burning of tyres along roads is prohibited across the state and urged community leaders to sensitise the people to forestall further damage to the roads.

  • FG to summon developers, contractors over abandoned housing projects

    FG to summon developers, contractors over abandoned housing projects

    The federal government said it would summon contractors and developers of federal housing projects in the country.

    The government, which said it would no longer tolerate abandoned housing projects in the country when millions of Nigerians are in need of housing, added that it intends to recoup its investments.

    The Minister of Housing and Urban Development, Ahmed Dangiwa stated this in Abuja after the inspection of two housing projects, the NHP Karsana housing project and the Brains and Hammers Deidei housing projects in the Federal Capital Territory (FCT).

    He said his Ministry intends to have a sit down with such contractors and developers to know the reasons why they abandoned such projects.

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    Dangiwa also said they realised that some of the developers or contractors do not have the managerial or financial capacity, these are some of the developers they would age out and bring in serious ones.

    He said: “President Bola Tinubu is passionate about providing affordable housing for Nigerians, it is one of the renewed hope vision. We are going around the sites to see the projects that the Federal Ministry of Housing has constructed

    “Well contractors talking about a review of their contracts would have to engage the Federal Mortgage Bank of Nigeria (FMBN) because I know that loans were given to them, if they couldn’t finish within time, then they would have to go and sit down with FMBN to explain why they couldn’t finish the projects within the stipulated time

    “On the aspect of the abandoned housing projects in the country, what we are telling most of the contractors is that we would no more tolerate any abandoned, we intend to recoup the investments put in by the government, so all abandoned construction sites, we are inviting all the developers to come and have a sit down with us so we can know the reasons why they abandoned such projects.

    “Some of the developers or contractors we realised do not have the managerial or financial capacity, these are some of the developers we would age out and bring serious ones for the construction to take off because at the end of the day, we want to ensure that Nigerians are better for it because there are millions of Nigerians that need houses.”

  • Senate approves disbursement of N338b to states, contractors

    TWO states – Delta and Taraba are to share N102.3 billion of the N338 billion approved yesterday by the  Senate for disbursement as settlement for inherited local debts and contractual obligations.

    The funds approved for the two states are reimbursement for projects they executed on behalf of the Federal Government. About N43.5 billion will also be disbursed on contractual liabilities.

    Another N193 billion was approved for outstanding claims of 269 verified companies.

    Further breakdown of the N102.3 billion showed that Delta State will receive N67.9 billion and Taraba State (N34.3 billion) as refunds for expenses incurred on Federal Government projects.

    The approval followed yesterday’s adoption of the report of the Senate Ad-hoc Committee on Promissory Note Programme and Bond Issuance.

    Chairman of the Committee and Deputy Senate Chief Whip, Francis Alimikhena, presented the report.

    Alimikhena explained that the N43.5 billion was approved the settlement of contractual liabilities.

    The breakdown is as follow: N37 billion to Setraco Nigeria Limited; N4 billion to Bouygues Nigeria Limited; N346 million to Simidia S & I International Company Limited; N210 million to Hamdala Homes & Agency Limited as well as N960 million to Lejmej Nigeria Limited.

  • Agip warns contractors against flouting govt regulation 

    The Nigeria Agip Oil Company (NAOC) and its Joint Venture partners yesterday began a special training for contractors on dangers of disobeying government regulation and extant laws.

    The fifth edition of the capacity building programme, attracted contractors, oil magnates and managers in public and private oil establishments across the country, especially Niger Delta.

    NAOC, Nigeria National Petroleum Corporation (NNPC) and Oando, which partnered on the programme, said contractors should obey the laws to avoid legal pitfalls.

    NAOC’s Vice Chairman/Managing Director Mr. Lorenzo Fiorillo, who opened the workshop, said it was designed to develop the capacity of Nigerian-owned companies to participate in oil and gas and help the government achieve its local content laws.

    He said the workshop would address gaps in competencies for business growth, adding that Agip and its joint partners would deepen the capability of stakeholders.

    Fiorillo, represented by general manager, Distribution, Alessandro Tiani said: “Nigerian companies will be equipped with knowledge and best practices required to close the gaps in their understanding of relevant regulations in the contracting and procurement process in the Nigerian oil and gas industry”.

    Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB), Simbi Wabote, said the country lost  $380 billion to capital flight following lack of capacity by Nigerians in oil and gas

    He said the inability of the country to enhance its potential led to loss of jobs to foreigners and low participation of Nigerians in the industry.

    “Nigerian content was only five per cent. Today, we have achieved 28 per cent local content retention, increase in capacity, and engineering capability, fabrication among others.”

    To tackle the problem, Wabote, represented by Director of Planning, Research and Statistics at NCDMB Patrick Obah said a 10-year strategic plan was in place to increase local content in oil and gas from 28 per cent to 70 per cent by 2027.

    He said the launch of the $200 million intervention fund with an interest rate of eight per cent for local contractors would assist local contractors.

    Also speaking, Oando’s Chief Executive Officer Mr. Wale Tinubu, represented by Adeyemi Oreagba, head of Government and External Relations, said Oando would support community-based companies doing business in the country.

  • Fed Govt mulls integrity bonds for contractors

    The Federal Government is planning to introduce fiduciary or integrity bond at the point of contract between any of its ministry, agency and department (MDA) and a contractor.

    Vice President Prof Yemi Osinbajo who spoke at the breakfast roundtable on rethinking business conduct and practices in Abuja yesterday, said  when it beomes operational, the bond will be listed as a pre-requisite before a formal contract award is issued.

    He warned that “non-compliance will attract a penalty to be agreed by stakeholders, not one imposed by government, and the penalty may be a percentage of the total contract value.”

    Fiduciary or integrity bond seeks to establish the prevention of corrupt malpractices by contractors that expose and cause losses to the government.

    Prof Osinbajo said combining the fight against corruption, and building a strong economy is not an easy task. “Dealing with this will not only need patience, time and strong will; it also requires strong innovations and processes to compel people to do the right thing which is why the government has initiated the integrity bond concept,” he said.

    The fiduciary bond concept “will not only be a good anti-corruption prevention mechanism, it will also align with the idea behind the Executive Order 001 to create a transparent business environment between government agencies and the private sector.”

    To be known as the Fiduciary (Integrity) Bond, it will be a time-elapsing financial instrument issued by a bank or insurance company on behalf of a private enterprise in favor of the Federal Government.

    He said if adopted by stakeholders, the concept will further help sanitise the nation’s business environment to improve transparency in government procurement process and can become a worthy tool in the fight against corruption and at the same time create a trusted business environment.

    The integrity bond will contain specific conditions for which the bond can be called, it will serve as a guarantee against bribery, inducement and/or fraud or any related malpractice which is uncovered during and/or after providing goods or services to any public or private enterprise or body during the validity period of the bond and it will be a percentage amount of the total contract sum charged by the entity providing the goods and/ or services

    The bond is a contractual liability between the Federal Government and the private provider of the goods or service. It reduces the likelihood of unknown businesses from obtaining large contracts, thereby increasing transparency of contracting processes; eliminates the occurrence of prolonged court cases, except in cases where the called bond is disputed and can be extended to contractual engagements between private parties on a voluntary basis.