The Federal Government has rejected the Julius Berger’s request for variation based on fluctuations in exchange rate and increasing cost of material on the Bodo-Bonny road construction in Rivers State.
Minister of Works, Engr David Umahi who rejected the request during a meeting with the road project handler, Julius Berger Plc, as well as Nigeria Liquefied Natural Gas NLNG, Royal Fathers from Bonny Kingdom and other members of host communities in Abuja, said Government does not award contract based on exchange rate.
Umahi in his explanation said the Bonny- Bodo road contract was initially awarded at the cost of N120 billion in 2015, later varied at N199 billion with a completion dateline of December 2023, which has since elapsed.
The Minister who expressed disappointment over the unilateral stoppage of work project by the Julius’ Berger, described the action unacceptable, gave a marching order to the contractor to return to site within 14 days or risk appropriate sanctions.
He stated further that no contractor will come to government for a downward review of the cost of any project if the exchange rate becomes one naira to one dollar, adding that government cannot anchor contract cost based on exchange rates variations.
Umahi saddened that the timelines for the completion of the project were not adhered to, while maintained that if the project were completed in December 2023, as contained in the contract agreement, issues of high exchange rate and increasing cost of materials would not have arisen.
The Minister however promised that he would make a presentation to President Bola Ahmed Tinubu for a marginal augmentation to ensure that the project is completed on or before December 2024, particularly in the Spirit of the Renewed Hope Agenda and the love Mr President has for Bonny Kingdom and other host communities in the Niger Delta Region.
Earlier, the Managing Director, Julius Berger Plc, Engr Dr. Lars Richter while making his presentation appealed for the variation of the road contract which he said has become necessary in view of the declining value of the Naira and rising cost of construction materials in the country.
He drew the attention of the Minister to the time lag when the contract was awarded in 2015 when the exchange rate was N305 to a dollar, adding that the cost of building materials has since risen by over 1000%.
In his contribution, the Deputy Managing Director of NLNG, Olakunle Osobu pointed out that the contract which is being funded through the Tax Credit Scheme is intended to complement the Renewed Hope Agenda.
He called on all parties to the Bodo-Bonny road project to remain patriotic as well as make the necessary sacrifices for the actualisation of the project.
The Royal Fathers of Host Communities led by Chief Abel Attoni, Palace Secretary, lauded and expressed gratitude to President Tinubu over decision to ensure completion of the project and hailed the commitment of the Minister to road projects especially coming at a time the country is experiencing economic difficulties.
