Further variation on Bodo-Bonny Road project unacceptable, Umahi tells Julius Berger

Minister of Works, Engineer David Umahi, has told Julius Berger that their requested variations on the 82% completed project are unacceptable, saying that the Federal Government is willing to provide N20 billion out of the N28 billion the contractor asked for.

The minister disclosed this during a meeting with the Managing Director of Julius Berger, Lars Ritcher and the Bodo-Bonny Road Peace Committee.

The meeting followed a letter requesting an extra N28 billion and outlining various additional conditions for the project’s completion.

According to Engr. Umahi, when the N199.923b project was signed, it was scheduled for completion by December 2023 with a caveat that there would be no further variation.

The 39km long road is the first road between Bonny Island and the rest of Rivers State.

Engr. Umahi stated that if the contractor does not accept the Federal Government’s offer by Friday and resume work on the site, the previously expired 14-day-ultimatum for their return will be enforced.

While cautioning that no contractor has the authority to dictate terms to the Federal Government on a contract agreed upon by both parties, the Minister stressed that his stance was grounded in the legal requirement for both parties to review the contract terms before signing it.

The Minister told the Julius Berger delegation to either accept the government’s response to their demands on the project and proceed with it, or terminate the project voluntarily.

He assured the Boddo-Bonny Road Peace Committee that should Julius Berger abandon the project, it will not stall and the quality of the project will not diminish. According to him, with or without Julius Berger, the road will be completed by the end of this year.

Before agreeing to pay N20 billion out of the N28 billion requested by Julius Berger for project variations, Engr. Umahi had maintained that the Ministry would only allocate N13.8 billion, resulting in a N15 billion disparity.

The Minister cautioned Julius Berger to learn to demonstrate humility in its dealings with the client (Federal government) and also show solidarity during this economic downturn, considering the substantial benefits it had received during the country’s prosperous economic times.

He said: “The difference is not even the issue, the issue is Berger’s annoying letter, dictating to the nation, and nobody dictates to me, only Mr President that appointed me can dictate to me.

“If Berger doesn’t accept our conditions, they can walk away. If other contractors do not accept our conditions, they can walk away, nobody dictates for this country.

“I want all to know that this is a tax credit and an Executive Order”.

The Minister noted that Julius Berger got the issue wrong for failing to adhere to the project’s timetable.

The Minister noted that had Julius Berger adhered to the project timetable, it would have been completed on schedule, thereby avoiding the impact of foreign exchange challenges and the escalation of construction material prices.

Regarding the contractor’s letter to which the Ministry allegedly did not respond, Umahi said irrespective of Nigeria LNG Ltd’s (NLNG) potential independent decision to fulfil the remaining conditions of Berger outside of the Tax Credit scheme, the Ministry will not rely on Tax Credit for this purpose.

Breaking down Berger’s letter that the Ministry will make an additional variation in price (VOP) based on the contractor’s reasonable calculation and projection, the Minister affirmed, “We will not”.

He also turned down Berger’s demand that the Ministry approve additional sand quantities.

On Berger’s rejection of the fixed exchange rate proposal and that the Ministry should find an alternative solution, Engr. Umahi said the contract he inherited was Naira-denominated and would not accept the contractor’s demand.

“Our position is very simple, we reject the conditions of Julius Berger totally and we ask Berger to please go back to the site to complete the project based on our offer.

“Our offer is unconditional and we say, accept or reject, so you cannot subject our offer to your conditions

“Berger should note that our 14-day termination ultimatum has gone and we will make a proposal if you did not agree with this,” he warned.

After deciding to pay the N20 billion, the Minister revealed that he would present a proposal to President Bola Tinubu, outlining the conditions stipulated by Julius Berger to the Ministry and the funding disparity.

According to him, it is within the President’s authority to waive the conditions or authorise the Minister to terminate the job.

Addressing the Niger Delta traditional rulers’ concerns about the project’s completion, Engr. Umahi assured them that terminating the contract would not compromise the quality or timeline of the project.

Although he did not commit to providing the N8 billion difference, the NLNG representative guaranteed that the company would adhere to the government’s directives on the matter, pending Board approval.