N3bn debt slows down work on Lagos - Ibadan road
Prosper
Posts: 1,432
Lagos-Ibadan Expressway
The scheduled completion time of the Lagos-Ibadan Expressway may be affected following the decision of the contractors to slow down work due to the non-payment of over N3bn owed them by The Infrastructure Bank for work done and duly certified.
Road users have in the past two weeks observed the slow pace of work by the contractors, Julius Berger Nigeria Plc, which is working on the Lagos/Sagamu interchange end of the road, and Reynolds Construction Company, which is handling the Sagamu interchange to Ibadan end of the road.
The Federal Controller of Works, Lagos, Mr. Godwin Eke, told one of our correspondents that the contractors had said they would go back to work after the debt had been offset.
According to him, officials of the Federal Ministry of Works have met with the management of the bank, which has promised to pay before the end of the month.
“The Infrastructure Bank owes the contractors some money under the new arrangement; about N3bn. As soon as they pay them, the work will continue. Work has not been abandoned; rather, it is slowed down,” he said.
Eke added that the contractors had said that they were also not certain about the direction the new government would take as regards the project.
“The ministry does not have any problem; it is the contractors that are not certain about the direction of the new government. But the new government is not going to affect the work hopefully, because government is a continuum,” he added.
He said that contractors usually prepare and submit interim statements every month and get paid.
Eke added that payment had not been made for the last set of statements submitted by the contractors, leaving unpaid certificates of over N3bn for both Julius Berger and RCC. He also said that through the financing arrangement for the project, the financial burden had been passed to The Infrastructure Bank.
However, the Managing Director, TIB, Mr. Adekunle Oyinloye, said it was not correct to state that the bank owed the contractors as it was the finance arranger to the Federal Ministry of Works on the project, with the mandate to raise about N167bn needed to implement the project in line with the construction contract executed between the ministry and the contractors.
“Hence, the finance arranger cannot owe the contractors as the TIB is rendering a service on behalf of the FMW and is not directly obligated to pay the contractors from the funds raised,” he explained.
In line with the TIB’s mandate, Oyinloye said the contractors were paid N25bn in advance in 2014 and an additional N25bn in 2015 for work certified and as payment on account for work done but yet to be certified by the supervising engineers, bringing the total paid so far to the contactors to about N50bn.
He added, “In line with the project dynamics, payments are not made until outstanding works are certified by the supervising engineers. This is consistent with the terms of the construction contracts and global best practices for executing large-scale engineering projects.
“With respect to the scaling down of work on the road, it is important to note that the rainy season has just fully commenced and it may be counterproductive to do some work while the rains are on. Furthermore, and in line with the project transaction dynamics, the detailed engineering designs for the road is being redone with a view to providing enhancements and other road improvement programmes to turn the expressway into a world-class carriageway with essential services for health and safety considerations, services and rest areas, lay-byes, trailer parks, and other economic development facilities in line with best practices.
“This design improvement is being undertaken right now and should be completed sooner. However, this will not stop the work being done on the road.
According to the controller, the rainy season has also contributed to the slow pace of work on the road.
Eke said, “No meaningful work can be done when it is raining; if you do it, it will be washed away. When you are doing a road and it is raining, you slow down, especially when you have excavated, you cover the excavated part and wait for a clement weather before you continue.
“If you don’t, the water will penetrate deep and destroy what you have done. That is a major reason for the slow pace of work and not just the non-payment of the outstanding sum,” he said.
The reconstruction of the Lagos-Ibadan Expressway was awarded in 2013 at a total cost of N160.7bn, with three lanes on either side up to the Sagamu interchange from Lagos, and two lanes up to Ibadan as well as flyovers and inter-change.
The immediate past Minister of Works, Mr. Mike Onolememen, had said that the project would last for 48 months and would be delivered in August 2017.
According to Eke, the work is currently at 25 per cent completion stage and may be completed before the scheduled delivery date if there is adequate funding.
The Chief Engineer, RCC, Mr. Nader Yusuf, confirmed to one of our correspondents on the telephone that the company was not working at optimal capacity on the road because it was being owed though he refused to disclose the amount outstanding to the firm.
“We are working, but they are owing us. We are not working with all our ability because of the money they are owing us,” he said.
Yusuf also gave an indication that the scheduled completion time might be affected if the contractors were starved of funds, adding, “If they pay us well, we can finish our work in 18 to 20 months.”
When contacted, the Media Officer of Julius Berger said he had no information to give on the project.
Source: PUNCH
The scheduled completion time of the Lagos-Ibadan Expressway may be affected following the decision of the contractors to slow down work due to the non-payment of over N3bn owed them by The Infrastructure Bank for work done and duly certified.
Road users have in the past two weeks observed the slow pace of work by the contractors, Julius Berger Nigeria Plc, which is working on the Lagos/Sagamu interchange end of the road, and Reynolds Construction Company, which is handling the Sagamu interchange to Ibadan end of the road.
The Federal Controller of Works, Lagos, Mr. Godwin Eke, told one of our correspondents that the contractors had said they would go back to work after the debt had been offset.
According to him, officials of the Federal Ministry of Works have met with the management of the bank, which has promised to pay before the end of the month.
“The Infrastructure Bank owes the contractors some money under the new arrangement; about N3bn. As soon as they pay them, the work will continue. Work has not been abandoned; rather, it is slowed down,” he said.
Eke added that the contractors had said that they were also not certain about the direction the new government would take as regards the project.
“The ministry does not have any problem; it is the contractors that are not certain about the direction of the new government. But the new government is not going to affect the work hopefully, because government is a continuum,” he added.
He said that contractors usually prepare and submit interim statements every month and get paid.
Eke added that payment had not been made for the last set of statements submitted by the contractors, leaving unpaid certificates of over N3bn for both Julius Berger and RCC. He also said that through the financing arrangement for the project, the financial burden had been passed to The Infrastructure Bank.
However, the Managing Director, TIB, Mr. Adekunle Oyinloye, said it was not correct to state that the bank owed the contractors as it was the finance arranger to the Federal Ministry of Works on the project, with the mandate to raise about N167bn needed to implement the project in line with the construction contract executed between the ministry and the contractors.
“Hence, the finance arranger cannot owe the contractors as the TIB is rendering a service on behalf of the FMW and is not directly obligated to pay the contractors from the funds raised,” he explained.
In line with the TIB’s mandate, Oyinloye said the contractors were paid N25bn in advance in 2014 and an additional N25bn in 2015 for work certified and as payment on account for work done but yet to be certified by the supervising engineers, bringing the total paid so far to the contactors to about N50bn.
He added, “In line with the project dynamics, payments are not made until outstanding works are certified by the supervising engineers. This is consistent with the terms of the construction contracts and global best practices for executing large-scale engineering projects.
“With respect to the scaling down of work on the road, it is important to note that the rainy season has just fully commenced and it may be counterproductive to do some work while the rains are on. Furthermore, and in line with the project transaction dynamics, the detailed engineering designs for the road is being redone with a view to providing enhancements and other road improvement programmes to turn the expressway into a world-class carriageway with essential services for health and safety considerations, services and rest areas, lay-byes, trailer parks, and other economic development facilities in line with best practices.
“This design improvement is being undertaken right now and should be completed sooner. However, this will not stop the work being done on the road.
According to the controller, the rainy season has also contributed to the slow pace of work on the road.
Eke said, “No meaningful work can be done when it is raining; if you do it, it will be washed away. When you are doing a road and it is raining, you slow down, especially when you have excavated, you cover the excavated part and wait for a clement weather before you continue.
“If you don’t, the water will penetrate deep and destroy what you have done. That is a major reason for the slow pace of work and not just the non-payment of the outstanding sum,” he said.
The reconstruction of the Lagos-Ibadan Expressway was awarded in 2013 at a total cost of N160.7bn, with three lanes on either side up to the Sagamu interchange from Lagos, and two lanes up to Ibadan as well as flyovers and inter-change.
The immediate past Minister of Works, Mr. Mike Onolememen, had said that the project would last for 48 months and would be delivered in August 2017.
According to Eke, the work is currently at 25 per cent completion stage and may be completed before the scheduled delivery date if there is adequate funding.
The Chief Engineer, RCC, Mr. Nader Yusuf, confirmed to one of our correspondents on the telephone that the company was not working at optimal capacity on the road because it was being owed though he refused to disclose the amount outstanding to the firm.
“We are working, but they are owing us. We are not working with all our ability because of the money they are owing us,” he said.
Yusuf also gave an indication that the scheduled completion time might be affected if the contractors were starved of funds, adding, “If they pay us well, we can finish our work in 18 to 20 months.”
When contacted, the Media Officer of Julius Berger said he had no information to give on the project.
Source: PUNCH
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