There are indications that work may not
resume soon on the suspended reconstruction of the Lagos-Ibadan
Expressway as a recent court injunction against the project has
continued to deter the contractors and new investors.
Although a source at the Federal
Ministry of Power, Works and Housing said on Sunday that the minister,
Mr. Babatunde Fashola, met with the Chairman, Bi-Courtney Highway
Service, Dr. Wale Babalakin, on the possibility of resolving the court
issue, there were no signals that the meeting achieved anything
meaningful.
Beyond the court injunction, the two
contractors handling the project, Julius Berger Plc and Reynolds
Construction Company (Nigeria) Limited, according to sources, are also
not willing to return to the sites unless they are paid for the work
already done.
A Federal High Court in Lagos had in
December last year granted an order of mandatory injunction sought by
Bi-Courtney Highway Services Limited in suit number FHC/L/CS/727/2015,
setting aside a concession agreement granted Motorway Assets Limited to
finance the project and operate it.
The court held that the concession
agreement purportedly signed between the Federal Government and MAL on
January 16, 2015 was a flagrant disregard of the established principles
of law.
The government had on November 19, 2012
terminated its initial concession agreement with Babalakin’s Bi-Courtney
on the grounds that it could not make any appreciable progress three
years after it was granted the contract to rebuild and manage the road
for 25 years.
Julius Berger and RCC Nigeria were
directed to take over the work. And former President Goodluck Jonathan
inaugurated the reconstruction project in July 2013, giving the
contractors four years to complete it at a cost of N167bn.
Delay in getting funds for the project
had stalled the reconstruction effort and this dragged for a
considerable time until The Infrastructure Bank Plc was drafted to
facilitate the finance arrangement.
The Managing Director, TIB, Mr. Adekunle
Oyinloye, had said that the bank had raised N50bn as the first tranche
of the N167bn required for the project and named the commercial banks
involved in the financing as Access Bank, Ecobank, Diamond Bank and
Standard Chartered Bank Plc.
A source at the Presidency said on Sunday, “Until the court injunction is vacated there is nothing we can do.”
The source also said that the risk level
was too high for the new investors coming into the project, and
stressed the need for the administration of President Muhammadu Buhari
to fully understand what was on the ground in order to take the right
decision.
Several sources said a meeting recently held between Fashola and Babalakin on the court injunction.
The Special Assistant on Media to
Fashola, Mr. Hakeem Bello, could not give details of what transpired at
the parley and referred The Punch to one Mr. Ibe, an engineer at the Federal Ministry of Works in charge of the project.
Ibe confirmed that the government owed
the two contractors working on the road, adding that it was only after
the 2016 budget had been passed that payment could be made for the job
done.
He expressed the hope that the road
project would resume before February, provided the amount approved for
it in the budget would be enough to take care of the debts and new bills
for the year.
Officials at the Works segment of the ministry could also not tell when work would recommence on the road project.
They said that the Federal Government was working out ways to pay its debt to contractors.
A senior official said, “The minister
talked about that road during his maiden press conference. He made it
clear that the rehabilitation of that road was among the priority
projects of the government and was working towards that. But I think
what the government wants to settle, which the minister also talked
about, is the debt owed the contractors.”
In the concession agreement with
Bi-Courtney Highway Services, which was terminated on November 19, 2012,
the firm was to expand the lanes to 10 from Lagos to Sagamu, and six
lanes from Sagamu to Ibadan. It was also expected to build trailer parks
and five interchanges among other things at a cost of N89.5bn.
Federal Government cuts budget
The Federal Government has cut its budget for the Lagos-Ibadan Expressway from N66bn to N50bn in the 2016 Appropriation Bill, representing a drop of 24 per cent.
Currently undergoing reconstruction, the two contractors handling the project, Julius Berger Plc and Reynolds Construction Company (Nigeria) Limited, are being owed several billions of naira for the job executed.
They have vacated the road following the unpaid debts and a recent court injunction obtained by Bi-Courtney Highway Services Limited, setting aside a concession agreement granted Motorway Assets Limited to finance the project and manage it.
Not more than N50bn has been raised by the government for the N167bn road project, which is expected to be completed next year.
In the initial budget for 2016 presented to the National Assembly by President Muhammad Buhari, N66bn was voted for the highway among other road projects.
But in the reviewed copy obtained on Friday, the appropriation for the Lagos-Ibadan Expressway had come down to N50bn.
Although no reasons were officially offered for the slash, it was learnt that this was to ensure judicious distribution of funds that would be available for the year in view of the dwindling revenue from the oil.
A total of N244.123bn has been earmarked for the construction and provision of road facilities across the country in the reviewed 2016 Appropriation Bill.
This also showed some adjustments when compared with what was contained in the former proposal earlier sighted by one of our correspondents.
For instance, an analysis of appropriations for the Federal Ministry of Works, Power and Housing showed a series of adjustments in the section that captured construction, provision and repair of roads across the country.
The latest report showed that N244.123bn was budgeted for the construction and provision of roads while the government earmarked N277.95m for the rehabilitation and repairs of other items aside from roads.
From the latest bill, it was clear that the government raised the appropriation for road construction/provision by N45.73bn when compared with the N198.39bn initially appropriated for the construction/provision and rehabilitation/repairs of roads in the first bill earlier presented by the President.
Out of a total of N326.886bn appropriated for the construction and provision of fixed assets in the ministry, the road sector alone received N244.123bn, representing 74.68 per cent of the total.
The remaining N82.763bn or 25.32 per cent was shared among other sectors such as housing and electricity.
Indeed, the construction/provision of housing got N49.53bn; the construction/provision of electricity received N25.1bn, while the vote for the construction/provision of office buildings was put at N6.16bn.
Others are the construction/provision of infrastructure, N1.1bn; water facilities, N686.95m; rehabilitation/repairs of public schools, N42m; and rehabilitation of office buildings, N171.25m, amongst others.
Senior government officials at the works ministry told one of our correspondents that the Minister of Works, Power and Housing, Babatunde Fashola, would soon give directives on the commencement of work on selected federal roads.
According to them, the minister is presently working out ways to settle some of the debts owed contractors in order to encouraged them to move to the project sites.
An official, who spoke on condition of anonymity, said, “Work will commence on our roads soon. The minister has been on tour for some weeks now, and he is trying to see how the government can settle some of the debts owed contractors so that they can return to project sites when called upon.
“So, on whether the government is ready to fulfil its pledge concerning road construction, I can assure you that very soon many contractors will resume work on these roads.”
While unveiling the Federal Government’s blueprint on infrastructural development in December last year, Fashola had stated that the present administration would give priority attention to the completion of major highways.
Fashola had said, “Our short-term strategy will be to start with roads that have made some progress and can be quickly completed to facilitate connectivity. We will prioritise within this strategy by choosing first the roads that connect states together, and from that grouping, we will start with those that bear the heaviest traffic.”
Reports by Punchng