Non release of funds threatens World Bank-Lagos projects

There are indications that the multi-billion naira World Bank funded Lagos Bus Rapid Transit (BRT) system might have been in danger, following allegation of non-release of funds by the state government to contractors handling some of the projects.

Already aggrieved contractors upgrading depots, BRT Bus Terminal and BRT Bus Stop Shelters scattered across the state are leaving site over allegation of the state inability to fulfill her contractual agreement.

The contractors were sometimes in 2015, awarded contracts by the state government through the Lagos Metropolitan Area Transport Authority (LAMATA), with total cost of each of the three projects, put at between N800million to N1billion each, with duration period spanning between 12 to 18 months.

The Guardian gathered that the World Bank has redeemed its financial commitment to tune of about 95% while the state government was expected to provide the remaining fund.

However, the non- release of funds by the state government has compelled some of these contractors handling these projects to abandon site or at best scale down their operations.

It was learnt that some of the contractors who had completed aspects of the project earlier awarded; and have met the one year mandatory grace period (retention period), stipulated in the contract documents are yet to be paid their outstanding balances more than three months after.

An official of the construction companies, who spoke to the Guardian on condition of anonymity said, he could not fathom the reason behind the non-release of fund by the state government particularly as the project was mainly financed by the World Bank and paid up front.

He said: “I am surprised that the state is withholding this fund since they were paid upfront.

“Why are they holding on to the fund? If it was 50-50, payment agreement, we will understand that the state is yet to fulfill its counterpart funding but that is not the case “What the state government was expected to do was effective supervision and to ensure that the jobs were done to specification. But what we have now is that funds have stopped coming in, leading to our leaving sites. If u go around the project sites, you will notice that workers are no longer on site. We have to pay these workers and we don’t have the resources to do so. The best thing to do under the circumstance will be to ask the workers to stay at home pending when situation will improve.

“The truth is that the situation appears hopeless when one realises that even those that have completed their projects are yet to be paid about a year-and-a-half after these jobs have been completed. And this is in spite of the fact that the one -year retention period stipulated in the contract documents have since lapsed. This is not encouraging to us.”

The source further stated that efforts to have the situation redressed have ben unsuccessful as state government officials insist there was no funds to complete the projects.

When confronted with the fact that some contractors were still on site, he said. “ well, I can tell you that I am not on site and some of my colleagues are not on site too”.

It was learnt that except something is done urgently, the state government runs the risk of having the contracts revoked by the World Bank if they are not completed by February 2017.

This fact, the source maintains, was clearly stated in the MoU signed by the World Bank and the Lagos State Government.

But the LAMATA’s External Relations Specialist and Head of Communications Unit, Kolawole Ojelabi, denied owing any contractor, who has completed his work.

“While it could be true that some of the contractors were owned by the state government, the debts have been settled about a week earlier”.

According to him, once the works are completed and certified by the consultants, the contractors are paid.
Ojelabi, who said, he was not aware that LAMATA is owing any contractor, said all the contractors to the best of his knowledge have been paid.

He said:” if they are not being paid, they will not be on site. Look at the pace of work at Ketu- Idioroko axis. “Even though, I am not in the account department but I can tell you that I am not aware of any of them being owed.

It was learnt that except something is done urgently, the state government runs the risk of having the contracts revoked by the World Bank if they are not completed by February 2017.

This fact, the source maintains, was clearly stated in the MoU signed by the World Bank and the Lagos State Government.