FG gives give or take condition to Julius Berger on Bodo-Bonny road

The Federal Government has set a deadline for Julius Berger Nigeria, the contractor in charge of the Bonny-Bodo Road project, to finish the project by the end of the year. 

Minister of Works, David Umahi, also conveyed to the construction company that their requested variations on the 82% completed project are unacceptable. 

The government is willing to provide N20b out of the N28b the contractor is requesting.

According to the Ministry’s Permanent Secretary, Yakubu Kofarmata, when the N199.923b project was signed, it was scheduled for completion by December 2023 with a caveat that there would be no further variation. 

The 39 km long road is the first road link between Bonny Island to the rest of Rivers State.
Umahi stated that if the contractor does not accept the Federal government’s offer by Friday and resume work on the site, the previously expired 14-day ultimatum for their return will be enforced. 

These clarifications were provided during a meeting in Abuja with the Managing Director of Julius Berger, Lars Ritcher and the Bodo-Bonny Road Peace Committee. 

This meeting followed a letter requesting an extra N28b and outlining various additional conditions for the project’s completion.
While cautioning that no contractor has the authority to dictate terms to the Federal government on a contract that has already been agreed upon by both parties, the Minister stressed that his stance was grounded in the legal requirement for both parties to review the contract terms before signing it.

The Minister explicitly stated to the Berger delegation that they should either accept the government’s response to their demands on the project and proceed with it, or voluntarily terminate the project themselves.

He assured the Boddo-Bonny Road Peace Committee that even if Julius Berger decides to abandon the project, it will not stall and the quality of the project will not diminish.
He said with or without Julius Berger, the road would be completed by the end of this year.

Before agreeing to pay N20b out of the N28b requested by Berger for project variations, Umahi had maintained that the Ministry would only allocate N13.8b, resulting in a N15b disparity.

The Minister cautioned Julius Berger to learn to demonstrate humility in its dealings with the client (Federal government) but also show solidarity during economic difficulties, considering the substantial benefits it had received during the country’s prosperous economic times.

He said: “The difference is not even the issue, the issue is Berger’s letter that is annoying, dictating to the nation, and nobody dictates to me, only Mr President that appointed me that can dictate to me.

“If Berger doesn’t accept our conditions, they can walk away. If other contractors are not accepting our conditions, they can walk away, nobody dictates for this country.

“I want all to know that this is a tax credit and it is an Executive Order”.

The Minister noted that Berger got the issue wrong for failing to adhere to the project’s timetable.

The Minister noted if Berger had adhered to the project timetable, it would have been completed on schedule, thereby avoiding the impact of foreign exchange challenges and the escalation of construction material prices.

Regarding the contractor’s letter that the Ministry allegedly did not respond to, Umahi said irrespective of Nigeria LNG Ltd’s (NLNG) potential independent decision to fulfil the remaining conditions of Berger outside of the Tax Credit scheme, the Ministry will not rely on Tax Credit for this purpose.

Breaking down Berger’s letter that the Ministry will make an additional variation in price (VOP) based on the contractor’s reasonable calculation and projection, the Minister affirmed, “We will not”.

He also turned down Berger’s demand that the Ministry approve preliminary additional sand quantities. 

On Berger’s rejection of the fixed exchange rate proposal but that the Ministry should find an alternative solution, Umahi said the contract he inherited was Naira-denominated and would not accept the contractor’s demand.

“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 

“Berger should note that our 14-day termination ultimatum has gone and we will make a proposal, if you did not agree with this,” he warned.

After deciding to pay N20b, the Minister revealed that he would present a proposal to President Tinubu, outlining the conditions stipulated by Berger to the Ministry and the funding disparity.

At that point, he said it is within the President’s authority to either waive the conditions or authorise the Minister to terminate the job.

Addressing the Niger Delta traditional rulers’ concerns about the project’s completion, Umahi said being a seasoned engineer, assured them that terminating the contract would not compromise the quality or timeline of the project.

Although he did not commit to providing the N8b difference, the NLNG representative guaranteed that the company would adhere to the government’s directives on the matter, pending Board approval.

• The Nation