Delay costs FG additional N679b on road projects
• East-West road tops with N515b
• Official links contract variation to inflation, FX crisis
Undue delay occasioned by bureaucracy and poor funding in the execution, rehabilitation and reconstruction works on critical roads in the country has cost the Federal Government at least N679 billion, an investigation has revealed.
The East-West road comes tops with N515 billion; Lagos-Ibadan N144 billion and Sagamu-Benin road comes third with N20 billion
An official of the Ministry of Works and Housing said the losses arose from contract variation, inflation and foreign exchange fluctuation.
Consequently, the government might end up spending the sum of N1.093 trillion on the 127.621km Lagos – Ibadan Expressway, the 181km Sagamu-Benin and the 675 km East-West roads, as against their original costs when they were separately flagged-off.
The East-West road was first awarded in 2006 by former President Olusegun Obasanjo for N211 billion but the administration of President Goodluck Jonathan added 23.9km to the East-West Road to link Calabar with the coastal town of Oron in Akwa-Ibom State and revalued the contract from N211 billion to N726 billion after the production of the engineering drawing.
The East-West road project include Section 1, the 87-kilometer Warri-Kaiama in Delta and Bayelsa states awarded to Setraco Nigeria Limited at the total sum of N64.125 billion. The Section II, 101km Kaiama-Port Harcourt road, in Bayelsa and Rivers states was awarded to Julius Berger Plc at the cost of N79.23 billion. The Section III Port Harcourt-Eket, which covers 99 km, was awarded to Reynolds Construction Company Nig. Limited at the cost of N35.6 billion.
Section IV Eket-Oron, Akwa Ibom State, which covers 50 kilometers, was also awarded to Gitto Construzioni Generali Nig. Limited at the cost of N26 billion.
The militancy activities in the Niger Delta region forced Julius Berger Plc to abandon the N79. 23 billion Section II, 101km Kaiama-Port Harcourt road, in Bayelsa and Rivers states and was later awarded to Setraco Nigeria Limited. However, the highway dualisation project was removed from the Ministry of Works and handed over to the Ministry of Niger Delta Affairs in 2009, as its flagship project.
Determined to complete and deliver the highway project to the people, the Ministry of Niger Delta re-awarded Section II, with the scope of works unchanged to Messrs. Setraco Nig. Ltd. in April/May 2009 into two sub-sections namely: Section II Sub Section I: Port Harcourt-Ahoada (47Km) at a contract sum of N29,922,478,839.19, with a completion period of 48 months and Section II Sub Section II: Ahoada- Kaiama (54km) with a contract sum of N44,883,718,258.18, with a completion period of 36 months.
In the new revised regime, the contract sum was subsequently shot up with the Section I, Warri-Kaiama, 87km, now going for N122.2 billion against N64.1 billion; Section II, subsection I, Port Harcourt-Ahoada, 47km, N48.9 billion against N29.9 billion; Section II subsection II, Ahoada-Kaiama, 54km, N84.7 billion against N44.8 billion; section III, Port Harcourt-Eket, 99km, N66.4 billion against N35.6 billion and Section IV, Eket- Oron, 51km, now N37.5 billion as against N26 billion.
The cost of the project, which was first awarded in September 2006 for a combined sum of N211 billion, has been reviewed upward to N349.8 billion and still subject to further reviews.
Last year, President Muhammadu Buhari approved the immediate release of N19.67 billion to ramp up efforts in completing sections I-IV of the East-West Road project by 2021.
ALSO, the Ondo Section of Sagamu-Benin expressway measuring 83 km was awarded at the cost of N65 billion in 2012 by the government of Goodluck Jonathan.
Director of Federal Highways, South West, Mr. Adedamola Kuti, said works on the road has reached 90 per cent, while it is expected to be completed before the middle of this year.
The Ogun State axis measuring 98 km and awarded in October 2014 at the sum of N71 billion, he said, has garnered a variation of N20 billion that move it from N71 billion to N91billion.
The project, which is presently at 30 per cent completion, he said, is expected to be delivered in 2021.
Kuti, an engineer, noted that the variation was to strengthen the road with asphalt to avert damage by tanker drivers that often park on the road.
ON endless reconstruction and rehabilitation of the Lagos-Ibadan Expressway awarded by Jonathan in July 2013 to Julius Berger Nigeria and Reynolds Construction Company Limited at a sum of N167b, the project is still hanging at around 45 per cent completion.
The Federal Controller of Works in Lagos, Mr. Olukayode Popoola, said the delay is because of the bridge works, which include two flyovers and two interchanges.
Earlier, the Umaru Yar’Adua administration had raised hope for the project in 2009 when it signed an N86.5 billion public-private partnership with Bi-Courtney to reconstruct the highway. But the project only took off in fits and starts.
When it became apparent the arrangement was stalling, Jonathan scrapped the contract in 2012 and awarded it to Julius Berger Nigeria and Reynolds Construction Company Limited a year later at a sum of N167 billion. In the bid to hasten completion, which was promised to occur in 2017, it was split between Julius Berger (Lagos-Sagamu Interchange) and Reynolds Construction Company (Sagamu-Ibadan).
However, it turned out the project had become one of several political gimmicks of government, bogged down by poor funding and lack of determination.
The election of Buhari ignited hope that the busiest road in Africa would be prioritised.
However, works were stalled completely in 2017 because of a supposed disagreement between the Executive and the National Assembly over budgetary allocation.
The executive allocated only N30 billion to the project in that year’s budget even when it was indebted to the contractors to the tune N15billion, while members of the National Assembly, felt it was a South-west project and hacked down the vote to N11 billion, transferring the balance to fund some phantom constituency projects.
Consequently, initial completion dates were stalled while the Federal Government has been incurring huge costs on variations. Section I of the expressway from Lagos to the Sagamu Interchange, which was valued at N70 billion in 2013, has risen sharply to N134 billion.
The Guardian learnt that the Federal Government would be spending N144 billion more on the oldest highway in Nigeria, commissioned in August 1978 during the Military era, under the administration of Major-General Olusegun Obasanjo.
Minister of Works and Housing, Babatunde Fashola, disclosed this during a recent inspection and town hall meeting on the dual carriageway at Ogere, Ogun State.
According to him, the government will spend N311billion for the total works on the project, which was varied to accommodate new features like flyovers, toll plazas, under- passes and pedestrian crossings.
The Guardian learnt that the Federal Government has so far paid over N150 billion of the contract sum, which currently handles more than 250,000 Passenger Car Units (PCUs) daily and constitutes one of the busiest road networks in Africa.
However, experts fear that the cost could climb higher as the November 2020 inflation rate was put at 12.88 per cent, making it the highest in 30 months.
While the rate has maintained an upward trajectory last year, rising demand for foreign exchange for the importation of raw materials has equally weakened the Naira to N470 against the U.S. dollar.
A director in the Ministry of Works and Housing, who spoke on condition of anonymity, told The Guardian that the N311 billion sum will take care of the total works as disclosed by the minister.
Confirming that close to N150 billion had already been spent on the road, he stressed that by the time it is completed, the total sum would be N311 billion.
“The project was varied once when they added the flyovers, toll plazas and there was a kind of augmentation, and the contract sum was increased because they needed to add all those features like flyovers, toll plazas underpasses, pedestrian crossings and others,” he added.
Also, commuters and residents along the corridor are not happy with Julius Berger for partitioning the highway at different spots without providing linkage, leading to recurring traffic bottlenecks particularly on the Lagos-Sagamu Interchange section.
They complained that the government’s lack of strict supervision of the contractor has created unnecessary hardship for motorists and businesses, while the completion date is yet uncertain.
Alan Adedolapo, an engineer, said, it amounts to irresponsibility and insensitivity on the part of the contractor to partition the road in the manner they are doing in this era of technological solutions.
Roads, he said, are being constructed in other parts of the globe with minimal discomfort, and demanded that Julius Berger should also be made to immediately implement global best practices in doing its job to alleviate the suffering being experienced by motorists.
But the Federal Controller of Works in Lagos, Popoola, said the ministry is adequately monitoring the contractors both day and night.
He stressed that road users are not patient enough with the diversions.
According to him, when there is a diversion approaching the bridge, it is not easy to maneuvre and there is little one can do about the diversion length.
He said: “When you are working and you approach the bridge and you need to divert, you cannot expand the bridge, you just need to manage unlike when you have a wider place where there is no bridge you can maneuvre well.”
ACCORDING to the World Bank, cost variations have become increasingly common among road construction projects. “Such escalations are creating serious problems in the implementation of development projects since they significantly reduce the amount of infrastructure that can be purchased from a given funding commitment,” it said in the Africa Infrastructure Country Diagnostic (AICD) report.
A policy research working paper developed for World Bank Group and published in September 2015 understudied a sample of road projects executed by the local and medium-income countries across the world from 1996 to 1998 and 2005 to 2008. The document noted that, “the most expensive development work type is a new six-lane expressway followed by a four-lane expressway.” The surveyed projects were classified as asphalt overlays between 40 to 59 mm.
The document listed terrain and proximity to market as factors responsible for different cost of the comparable road projects. In a separate analysis, it noted that road projects in countries with political instability are 15 per cent higher than their peers in other countries.
The 1996 to 1998 samples were drawn from Ghana, Dominican Republic, Lithuania, Indonesia, Mexico, Ghana, Costa Rica, Armenia, Brazil, India, Argentina, Cameroon, Bangladesh, Vietnam, Panama, El Salvador, Pakistan, Tanzania and Nigeria.
In the category, Tanzania had the most expensive project with a cost per kilometer of $223,400 while the Dominican Republic, with $67,000, had the least expensive project. Nigeria was the fourth country with the most expensive road, though only one project was analysed. The cost of the road project selected from Nigeria was estimated at $190,200 per km.
In the second phase (2005 to 2008), no project was picked from Nigeria but the cost range was from $62,400 to $197,800 per kilometer. Paraguay and Chile were rated as countries with the least and most expensive projects in the category respectively. The survey, however, did not give the specific technical details of the roads surveyed.
According to the updated cost value of East-West Road, which is put at N726 billion ($1.08 billion), a kilometer will cost the Federal Government $2.8 million. Lagos – Ibadan, a 127.6-km stretch of road, amounts to $6.4 million per km while Shagamu – Benin appears to be the cheapest among the trio with a cost per km of $2.3 million.
The cost is benchmarked on the current Central Bank’s official exchange rate of N380/$.
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