The Honourable Minister of Works, Senator David Umahi said the federal government has taken steps 'to rejig the monstrous contract price variation clause,' standing as a major clog in the wheel of progress of project execution over the years.
Senator Umahi maintained that as Works Minister, he has adopted more workable measures to end delay of project delivery by contractors in the country.
The Works Minister stated this in a press release issued and made available to journalists yesterday by his Special Adviser on Media, Barrister Uchenna Orji at Abuja.
According to him, the federal government has adopted workable measures to end the old order of unnecessary delays in the execution of road infrastructure projects by contractors as part of the strategic infrastructure development master plan of the Renewed Hope administration of President Bola Tinubu.
Umahi further expressed the urgency of thinking realistically, creatively, innovatively and thinking out of the square to overcome the funding challenges that face road infrastructure development in Nigeria.
"When the Renewed Hope administration came on board on 29th May 2023, Mr President inherited over 2600 ongoing projects from the past administration amounting to over N15 trillion, out of which only about N2 trillion was certified and paid.
"And so we now have ongoing projects of N13 trillion, including budgetary projects, NNPCL, SUKUK, Presidential Initiative Development Projects, other Tax Credit Scheme Projects of NLNG, MTN, Dangote, BUA, Mainstream and projects under EPC +F, PPP," the Minister narrated.
He stated that the aftermaths of fuel subsidy and the forex forces affected drastically the contract cost elements and pricing of which Variation on Price (VOP) could not provide a remedy, especially for jobs awarded so many years ago, and where VOP on contracts was sometimes hitting 500%.
He further stated that in looking for a solution, the Ministry sought and got Mr President's approval to give an envelope in the 2024 budgetary provision to keep all the inherited projects alive, believing that more funding of such projects could come by thinking outside the box.
The new projects under the 2024 projects, in his words, included the constituency projects of the National Assembly, which also have poor budgetary allocations.
In tackling responsibly the challenges of funding, price variation, and delays in project delivery, the Minister said, he has introduced responsive approaches which were adopted as the Ministry's measures to overcome the challenges of road infrastructure development in Nigeria.
"Such measures include but are not limited to reviewing the VOP clause to ensure workability in line with the economic realities, making it a policy that all contractors handling two carriageway projects (with the exemption of the 3 legacy projects) must first complete one side of the two carriageways and thereafter continue with the second part subject to availability of fund, advancement of funds after award of the contract is subject to conditions contained in the bid document, going forward.
"Other measures adopted were that contractors must have a timeline for project delivery, and every contractor shall have a duty to maintain the road under construction until the entire project is completed and delivered.
"A deadline shall be given for all ongoing projects, and with time, all projects that have no funding shall be stood down, but projects will be selected Zone by Zone or State by State for funding. In applying these measures, he emphasized that all contractors will be treated equally.
"One thing that is our policy is that no contractor in the Ministry of Works will be treated differently. Whether you're an indigenous contractor or you're a foreign contractor, insofar as you can turn cement to the right grade and place it rightly. You're a good contractor; we check, and it's good," he explained.
The Minister noted the various projects completed by contractors and other major ones to be ready for commissioning from July 2024 and directed the Directors in charge of each geo-political zone to officially and publicly commission the various projects completed in their respective Zones.
He also directed that committees made up of the Ministry's Engineers and Media correspondents be set up to pay inspection visits to the respective zones to assess the level of project performance in all the federal government projects being handled by the Federal Ministry of Works under the Renewed Hope administration.
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