David Umahi, the new minister of works, issued an order to all contractors managing Federal Government highways across the nation last week to immediately stop using asphalt and switch to concrete technology.
The minister further instructed the contractors to consult with the ministry’s engineers about redesigning all current Federal Government road projects in accordance with concrete technology. Several ongoing highway building projects will therefore be put on hold.
China Harbour Engineering Company, Gilmour Engineering Nigeria Limited, CBC Global Civil & Building Construction, Setraco Nigeria Limited, Decency Associates Limited, and Zephrygold International Limited are a few of the significant construction firms working on ongoing highway projects that will be impacted by the minister’s directive.
Others include Mothercat Nigeria Limited, SKECC Nigeria Limited, Triata Nigeria Limited, Geld Construction Company Limited, Levant Construction Company Limited, and Geld Construction Company Limited.
According to reports, the minister has already instructed the Bureau of Public Procurement to revoke all Certificates of No Objection issued for contracts for federal roads given by the administration of previous President Muhammadu Buhari under the former Minister of Works, Babatunde Raji-Fashola. However, as of the time of publication, this could not be confirmed.Contractors in charge of ongoing roadway projects around the nation have opposed the order, alleging that Umahi’s action violates contracts and could result in significant losses for the government.
They claimed that the minister’s sudden instruction to contractors to remove asphalt in favor of concrete technology amounted to “shifting the goalposts in the middle of the game.”
What the minister is attempting to do would cause pandemonium, according to a senior executive of a well-known construction company who spoke on the condition of anonymity. One of the reasons foreign investors hesitate to conduct business in Nigeria is the possibility of the government deciding to change the terms of contracts at any time. It’s not practiced anyplace. The Federal Executive Council has given its approval for the contracts in question, and the BPP has issued Certificates of No Objection. The Ministry of Works gave their approval to the road designs.
According to officials, the development would result in new investments in machinery for building roads using concrete technology and the beginning of cement imports because Nigeria lacks the domestic ability to create cement for roads and other building projects.According to some analysts, the development might cause more congestion on the ports’ access roads and at the ports itself.
They assert that it will raise the need for foreign exchange for the purchase of cement and iron rods, which will put more pressure on the naira, as well as increase the cost of building a road per km.
Industry commentators warned that the impending conflict between the government and the contractors could result in expensive litigation for both sides.
It was discovered that the contract agreements contain a clause for liquidated damages.
For the 11 national select/approved highways, which are dispersed over the North-West, North-East, South-South, and South West zones of the nation, the contractors have in place as a requirement a 10% Performance Guarantee from suitable banks (a total sum of N140bn for N1.4tn).