FEC NEVER STEPPED DOWN ON INHERITED ONGOING PROJECTS..... Says Works Minister .... Describes Reports As Misleading

FG Ready To Engage On Contract Review And Cost Augmentation For Inherited Ongoing projects Subject To Availability Of Funds  

Nigeria's Minister of Works, Engr. David Umahi on Friday gave assurances to contractors of Government's willingness to engage on contract review and cost augmentation on the inherited ongoing projects.

This assurance became expedient in view of the geometric rise in cost of contract elements caused by the inherited challenging economy, on the provisio that such would be done, subject to the availability of funds. 

Engr Umahi stated this during an interactive meeting with the contractors at the Ministry's headquarters, Mabushi-Abuja.

Speaking to the contractors, Umahi disclosed that the decision for windows to review and augment the cost of inherited ongoing projects was borne out of Mr. President's magnanimity and commitment to completing all inherited and funded ongoing federal government road projects nationwide.

"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." 

The Minister noted that, "What we are doing now is to review the projects in line with availability of funds and make a proposal to FEC. If such a project has attained about 80% 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"

The Honourable Minister of Works used the opportunity to debunk misleading  media reports that FEC stepped down inherited ongoing projects.

He stressed that neither the President nor FEC directed that inherited projects  should be stepped down. 

"The Federal Executive Council noted that the review we are doing, and in some cases a few new contracts that we are seeking approval to award, that there is a very large disparity between either the increase in contract costs or the project cost, between what we are looking  for and  the available funding." He said.

He explained further that, "The subject matter in fact was not about the unit cost, because we are very satisfied as a ministry with the costs that we have offered to you, which are actually the unit cost in line with the realities of the market prices. Some of these projects were awarded 18 years ago, some 10 years ago, 5 years ago."

Reiterating further the determination of the federal government in bringing funding and budgeting innovations that would fast-track road infrastructure development, Engr Umahi noted that FEC had directed the Federal Ministry of Works to work with the Federal Ministries of Finance and, Budget & National Planning to put forward, proper budgetary estimates for the 2025 financial year for those projects that were not appropriately budgeted for, but have attained probably 80% completion so that such projects might be completed and delivered.  

He stressed that for projects with huge procurement costs but have little  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 stated, the Minister stated that, "All projects we awarded in 2024 will not attract any VOP. And we have made it as a policy that such projects can not get any variation. 

He however emphasized that, "within the course of the year and the project execution, if there are issues (God forbid) 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".

"For projects with dualization, the Honourable Minister directed that all contractors with such projects must as a matter of policy, concentrate and first complete one carriageway and turn it over for public use and must within the period maintain the other carriageway for public use. 

The Permanent Secretary, Yakubu Adam Kofarmata, PhD, commended the initiative and urged the contractors to embrace the message of the meeting for the sake of Nigerians.