Construction firms begin downsizing over projects’ debt

FRESH facts emerged last week that that construction operatives may have started to downsize their workforce due to the inability of the Federal government to offset a debt of N500 billion owed the industry players.

The President, Federation of Construction Industry (FOCI), Mr. Solomon Ogunbusola who lamented that the construction industry is in a comatose because Federal government and some state governments have failed to pay the projects, confirmed that retrenched has commenced in the sub-sector. “We are now retrenching our workers.

Up till last week, we still downsized our workforce and this will continue till we get to a stable position. We merely open our offices now because we want to remain there hoping that the incoming administration will change the system.

We can no longer keep quiet or hide any longer,” he said. FOCI urged the in-coming government of Mohammadu Buhari to rescue the members from the high indebtness amounting to over N500 billion owed by the Federal Government to its over 126 members.

Crying out against the moves by the Central Bank of Nigeria to publish the names of FOCI members as chronic debtors FOCI President, Mr. Solomon Ogunbusola said publishing their names as a result of heavy indebtedness was unfair as they became indebted due to the money they borrowed to execute government work which the government has not been able to pay notwithstanding that these contracts have been completed some up to three years ago even with certificates for payment.

Among the government agencies owing FOCI members is the Federal Ministry of Works who is said to be owing as much as N500 billion just as one company alone is indebted to the tune of over N70 billion.

He called for a special emergency intervention in the construction sector as they now work below 30 per cent, which is not good enough for the sector as it is now leading to other consequences including retrenchment of staff. “Last week we retrenched and we will continue to retrench,” Ogunbusola said.

He stated that the credit being attributed to the government on the achievement of certain sectors of the economy such as railways, aviation, roads and bridges were the handiwork of their members who borrowed money from the banks to execute their contracts while the same government turned round to ask the banks to publish their names as chronic debtors.

The 126 FOCI members include such heavy weight firms as Julius Berger, Structec, Trevi, DTV PW Nigeria Limited, JKN Limited, Setraco, Jagal Nigeria, G. Cappa PLC. among others.

“All the companies are being owed. What is aching me is the threat from the banks to publish our names as chronic debtors. Only Federal Ministry of Works alone owes over N500 billion.

Only one company is owed over N60 billion. Let them also publish the government ministries and agencies owing us as chronic debtors,” he said.

He commended the Bureau for Public Enterprises (BPE) for its efforts in coming up with a database for all the construction companies for the categorization that makes it easy for them to know where they belong.

He however, pointed out that some of them were not placed and asked that BPE should try and let such ones know their areas of deficiency to enable correct them and get placed into their own category.

One of the benefits he stated is that this will now make it impossible for some people to just invade the country and cart away contracts worth billions of Naira while they are wallowing in penury.

He commended them for their good works and pleaded with the in-coming government not to stop it. He added that the issue of corruption would be a thing of the past once the due process in BPE is followed and there would be transparency.

On the issue of Construction Bank, the FOCI President said the construction industry professionals had about 10 years ago floated the idea of Construction Industry Bank, which could not materialize.

He wished the Ministry of Finance and the Ministry of Works could encourage then to go ahead with it.

Mr. Ogunbusola also used the opportunity to speak about the organisation’s 59th Annual General Meeting holding at the Sheraton Hotel Abuja from 23rd to 25th of June 2015. According to him the AGM would hold simultaneously with exhibitions to showcase the members, manufacturers, heavy equipment used in servicing the industry among others.

He noted that FOCI was in Paris recently to participate in another exhibition there saying that with the experience they gathered there, they hope this year’s would be better than previous ones. 764wds