FG warns of contract cancellation as Julius Berger raises costs
The segment of the Abuja-Kaduna highway contract worth N740 billion awarded to Julius Berger is set to be canceled by the federal government due to the company's consistent demands for an increased contract value, now standing at N903 billion.
This decision comes after almost six years since the contract was granted, during which certain parts of the highway have posed challenges for travelers, sparking concerns about the project's advancement and administration, as reported by Arise News.
The contract for the Abuja-Kaduna highway, as well as the Kaduna-Zaria and Zaria-Kano sections, was awarded on December 20, 2018, with an original completion timeline of three years.
Initially valued at N155 billion, the cost was revised to N642.2 billion in 2021. The situation has now escalated with Julius Berger's demand for N903 billion, prompting the government to contemplate terminating the contract.
In January, Minister of Works David Umahi disclosed that Julius Berger had requested an increase in the project cost to N1.35 trillion, a figure deemed unaffordable by the government.
During the recent launch of highway rehabilitation, Umahi accused the contractor of politicizing the project, highlighting that while Julius Berger had requested approximately N1.5 trillion, the Federal Executive Council had recently reevaluated the contract to N740 billion.
He remarked, "Berger stated that it would require N1.5 trillion to complete the entire job. We began negotiations since September last year, sending letters every week. Ultimately, we informed them that even with their requests, it would still take them four years to complete due to traffic congestion and kidnappings on the road.
"We proposed the option of dividing the road into three parts, which the President approved. When we did this, Berger agreed to the rate. However, we were unaware that they were employing delay tactics, and at that time, their figure was N710 billion for both completed and pending work.
"Later, they returned, expressing the need for an increase to N740 billion. We presented this to the FEC, and they granted approval, only for them to state last week that they require a further increase to N903 billion," lamented Umahi.
The Minister stressed that the government would not entertain any further increases in the contract value following the recent reassessment.
He indicated that if Julius Berger does not agree to the new terms, the government will be compelled to revoke the contract.
"Even if we agree, other contractors will seek the same, leading to the project cost rising to about N4 billion per kilometer for asphalt. Our stance is that we will not entertain any further increases for Julius Berger beyond N740 billion. The game is up.
"If they are unwilling to proceed, we will assign it to those who can deliver at a lower cost while maintaining the same quality of the coastal road. They have dragged the project into politics, using it to discredit our administration, and we have had enough," added Umahi.
Umahi mentioned that the 375 km dualized road will be extended by an additional 7.5 kilometers in Kogi and Kano States.
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