Delayed payment: Contractor abandons work on Lagos-Ibadan Expressway
The Federal Ministry of Power, Works and Housing said on Sunday that Julius Berger Nigeria Plc had finally suspended work on the Lagos-Ibadan Expressway as a result of delays in the payment of agreed contract fees for work already done.
Saturday PUNCH had reported that the contractor handling the reconstruction and expansion works on the Section II from the Sagamu interchange to Ibadan, Reynolds Construction Company Nigeria Limited, with Contract No. 6205, had suspended further work on the project due to an outstanding debt of N8.94bn.
The RCC had in a letter addressed to the Minister of Power, Works and Housing, Babatunde Fashola, and dated June 2, 2017, called his attention to the worsening financial situation of the project and pleaded for his intervention in order to ensure the continuation of work on the site.
But Fashola, in a statement issued by his Special Adviser on Communications, Mr. Hakeem Bello, on Sunday, stated that the two contractors working on sections of the Lagos-Ibadan Expressway, Messrs Julius Berger and RCC had given notice of suspension of work on the site.
The minister said the contractors complained that the delays in the payment of agreed contract fees were adversely affecting the pace of work and could lead to default in meeting the completion deadline.
Fashola said the letter from the Managing Director, RCC, Mr. M. Nakhla, which was dated June 2, 2017, stated, “In view of the irregular payment and the attendant cash flow problem, we shall be constrained to suspend further execution of work unless there is an appreciable improvement in the project’s cash flow and adequate funding arrangement is put in place for further works.”
The minister said he also received a similar letter on June 5, 2017 from Julius Berger, which handles Section 1 of the dual carriageway from Lagos to the Sagamu interchange.
The Julius Berger letter stated, “It has become evident that the required adequate funding for the continuation of the project is not available. We trust that you will understand that, therefore, and as a consequence of the unacceptable financial risk to Julius Berger Nigeria Plc, we are left with no choice than to immediately commence suspension of the works on the project, as earlier notified.”
Fashola said the letter was co-signed by the Division Manager, Julius Berger, Mr. W. Loesser; and the Commercial Division Manager, Mr. T. Meletschus.
On the way forward, the statement noted that lawmakers at the House of Representatives had pledged to support the minister and his ministry to succeed in the assignment of road construction and rehabilitation nationwide.Punch