Umahi: FG Will Only Review Cost of Inherited Contracts Subject to Availability of Funds

Emmanuel Addeh in Abuja

The Minister of Works, David Umahi, at the weekend told the ministry’s contractors  that the federal government will only engage in contract review and cost  augmentation on inherited projects subject to the availability of funds.
Speaking during an interactive session with the contractors at the ministry’s headquarters in Abuja, the minister insisted that it was the federal government giving out the contracts, noting that any contractor not satisfied with the terms should quit.

Stressing that contrary to reports, inherited projects had not been stepped down by the federal government, the minister explained that President Bola Tinubu was committed to completing  all inherited 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.

“What we are doing now is to review the projects in line with availability of funds and make a proposal to the Federal Executive Council (FEC).
“If such a project has attained about 80 per cent 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 argued that projects with huge procurement  costs but have meagre  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 explained that all projects awarded in 2024 will not attract any variation, stressing that it is the new government policy.
He  reiterated  the determination  of the federal government in funding  and budgeting  innovations that would fast-track road infrastructure development, noting  that FEC had directed the ministry to work with the Federal Ministries  of Finance and Budget & National Planning to put forward proper budgetary  estimates for the 2025 financial year.
According to him, these are for those projects  that were not appropriately budgeted  for but have attained  about 80 per cent completion so that such projects will  be completed and delivered.

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 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,” he added.

For projects involving  ‘dualization’, the minister directed that all contractors with such projects must as a matter of policy first complete one carriageway for public use and must within the period maintain the other carriageway for use.

“We’ve been in this war with our contractors since September 2023. We are aware that for the contractors, there is no stakeholder in this country that they have not reported us to about the pricing.

“ There is a body that calls itself the Association of Contractors Union, that has even reported us to the Attorney General of the federation, and they have been castigating us in pages of newspapers, that we are forcing contractors to accept the prices as offered by the ministry of works.

“Our position has been that it is a kind of marriage, and so the two parties must come to an agreement. But we are the ones offering the job. And so, if our conditions are not conducive for you, there’s nothing to worry about, it’s to back out,” he maintained.

He said that the contractors were putting the ministry under severe pressure, including politicians who just want projects in their areas to be awarded, without considering funding.

 “But it’s worthless if such projects are awarded, and then their projects are not started. Or if we make available N500 million as appropriated against, say, N50 billion as the procurement, it is just to help the contractor.

“This is because the contractor cannot do anything with that money, but to put it in his or her pocket. We don’t want to allow public funds to go that way,” he pointed out.

 Umahi warned the contractors against ‘delay tactics and ‘playing games’, telling them that that if they are looking for how to get government money without working for it, that job will be terminated.

He also said that contractors owing the federal government will be recommended for prosecution to the anti-graft agencies.