After Several Notices, FG Terminates N740bn Contract with Julius Berger on Abuja-Kano Road

Umahi hands over two agencies to new minister of state

Emmanuel Addeh in Abuja

The federal government yesterday terminated the N740.7 billion contract for the rehabilitation of the Abuja-Kaduna-Zaria-Kano road with Julius Berger, after failing to reach an agreement with the German company on some terms.

In a letter seen by THISDAY, addressed to the company, the Minister of Works, David Umahi, reminded Julius Berger of previous efforts to ensure that a deal was reached, but which was rejected by the company.

Signed by the Director of the ministry’s Legal Department, C.O. Assam, Umahi stated that upon receiving the letter, the company should make arrangements to vacate the site to allow for work to continue.

“I am directed to refer to the above contract and to invite you to recall the approval of the Federal Executive Council (FEC) in its meeting held on 23rd September, 2024 whereby the above contract was re-scoped and reviewed to the sum of N740,797,204,713.25 with expected completion period of 14 months for the completion of the outstanding works (flexible pavement) in Section I (127km), Section II (73.4km) and Section III (128km).

“It should be noted that an independent consultant, Yolas Consultants reviewed the quantities and unit rates which were presented to the ministry which fixed the contract sum at N710,831,802,660.35 and your company initially accepted the work items, but later rescinded your acceptance laying claims to astronomical increase in prices of construction materials.

“The Honourable Minister of Works graciously granted the upward review of the unit rates on basic items of work from N710,831,802,660.35 to N740,797,204,713.25 which formed the basis of the FEC approval, despite the consultant’s submission,” the letter stated.

According to Umahi, the approval was conveyed to the company as final offer vide letter Ref. No: WR. 15022/Vol.T/304 dated  October 23, 2024 requesting the company to indicate in writing an unconditional acceptance form otherwise of the offer within seven days.

However, the minister stated that the company rejected the sum of N740.7 billion and unilaterally prepared a revised document, reducing the quantities and increasing the unit rates of work items, thereby altering the work items already approved by FEC.

“Upon receipt of your letter Ref. No: D12.90.1AKR.L.2024.0190 dated 29th October, 2024 the ministry viewed your alteration of the work items approved by FEC as a counter offer and therefore unacceptable.

“You have once again deployed your usual delay tactics to further frustrate the ministry in delivering the project as scheduled thereby worsening the situation of the road and causing untold hardship to commuters and other road users. This shows clearly you are not interested in continuing with the work,” a portion of the letter stated.

Consequently, the minister directed that the contract be terminated forthwith,  in accordance with clause, 63 Standard Condition of Contract (Road Works) Volume 1, 1999 edition with effect from the date of service of the letter.

“You are also by this letter be informed of the intention of the federal ministry of works to enter upon the site and the works and take over same from your company with effect from the date of service of the letter on your company.

 “The engineers representative shall upon service of this letter on you, arrange with you for a joint measurement of work preparatory to taking over the site and work from your company. This is without prejudice to the exercise of other rights of the federal government under the contract,” Umahi added.

Meanwhile, the minister has officially introduced and handed over to the newly appointed Minister of State, Works, Bello Goronyo, to supervise two agencies under the ministry.

They include: The Federal Roads Maintenance Agency (FERMA) and the Office of the Surveyor-General of the Federation (OSGoF).

The event took place during a meeting with the management of the two agencies and the minister in Abuja, a statement by the Director, Press and Public Relations, Mohammed Ahmed, said.

 Umahi appreciated President Bola Tinubu for sending Goronyo, to help him in handling the affairs of the agencies under the ministry, especially that of FERMA, which he said has a lot of direct impact on relieving the sufferings of the masses.

 “Put the nation and fear of God first in all you do; if you don’t put God and the people first in all you do, the money you make will go to nought,” he admonished.

He further advised the new minister and FERMA to advocate for increased budget to enable them achieve expected tasks, while promising his support to ensure they succeeds in the national assignment.

In his remarks, Goronyo assured of his open door policy to everyone with innovative ideas, so as to serve the purpose for which the agency was established.