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Minister of Works, Engr. Dave Umahi and the Managing Director of Foremost engineering construction company, Julius Berger Nigeria Plc, Dr. Lars Richter have both committed to ensuring the completion of the critical Bodo-Bonny Road, BBR project by year end.
This is coming just as the minister suggested an additional N20 billion augmentation fee to the contractor to cushion the effects of current economic realities in the country.
Speaking at the meeting, Umahi who was of the view that there was no need for any augmentation hoped that the additional amount N20bn which he announced there and then would assuage the contractor’s burden on the project.
The Minister reminded the stakeholders of the importance of the project to both the surrounding communities and the country, adding that when completed it will enhance development even as he gave the assurance to Bonny kingdom that the project will be completed by the end of 2024.
During his presentation, the Managing Director of Julius Berger Nigeria Plc, Engr. Dr. Lars Richter drew the attention of the Minister to the time lag when the contract was awarded in 2014 when the exchange rate was N305 to a dollar, adding that the cost of relevant construction materials have since risen by over 1000%. Richter called for the variation of the contract which he said has become necessary in view of the declining value of the Naira and rising cost of construction materials in the country.
He said, I thank you all for coming and for giving me this opportunity to share more light on the project. Allow me to give you some insight from us on this project. This project was initiated in 2013 and today we are talking of 2024, which means the project is more than 11 years old. In 2014, we received the letter of award and the project couldn’t commerce. Then in 2017/2018, the NLNG stepped in with the infrastructure tax credit scheme for modalities in funding the project.
Lars said the company asked for the augmentation because as at the time the contract was drafted it was based on the exchange rate of N305. “And last year there were some developments in the economy which result to a huge change in prices of construction materials, diesel, among others. When we signed this project, we were talking of N142 per Liter for diesel. But today we are buying diesel for N1500/N1600 per Liter. In 2013 the price of bitumen is far cheaper than today that we buy the bitumen for N1.2 million.”
Contrary to media reports and details of the meeting that went viral Thursday, insiders confirmed that the augmentation fee requested by Julius Berger is N80bn and not N28bn as in the quote from the ministry which says the company requested only that amount.
According to BusinessDay newspaper in its report, “David Umahi, the minister of works disclosed this during a meeting with contractors and the peace committee on the project from Bonny Kingdom, in Abuja on Wednesday. He stated that the government do not have the funds to meet the N28 billion request made by the contractor (Julius Berger company).”
One stakeholder was quick to remark that, there is the urgent need to clarify how much the augmentation fee really is. He asked, is it N80bn or N28bn?
The stakeholder who vowed to formally disclose the facts and fictions of the media reports on the meeting said the facts as stated by Dr. Lars Richter in his speech at the occasion include the following; the original contract sum was N199bn. The company requested in August 2023 for augmentation of N289bn. By March 2024 a discount of approximately N10bn was given to bring the amount down to N279bn.
The representatives of the Community and Peace Committee also present at the meeting were very much in favour of Julius Berger completing the contract and commended the company on its progress, engagement of the community and social responsibility among others since the first inception of the Bonny NLNG plant and the subsequent commencement of the road project.
Leader of the Peace Committee delegates, Chief Abel Attoni expressed gratitude over the decision to complete the Bodo-Bonny Road project even as he urged the parties to be patriotic and make the necessary sacrifice for the actualisation of the project.
One of them, King Jasper Jumbo did not mince words in declaring that, Julius Berger used to be my biggest enemy, but with all the engagement they have been into since the Bodo-Bonny road project began, I have loved them and their commitment to the work. The federal government should ensure Julius Berger complete the road. And I want to see the road delivered in my life time.
Surprisingly too, the Bodo-Bonny Road project as at March, 2024 is only 65% completed as against the 80% being touted by ministry officials as stated by Dr. Lars Richter and confirmed by the committee constituted by Minister of Works within the Federal Ministry of Works including external Consultants, PEARL & NLNG.
The 39 km long road is the first road link between Bonny Island to the rest of Rivers State. The road has cross culverts and two mini bridges with a span of 23m each as well as two creek bridges, Afa Creek Bridge of about 530m length and Nanabie Creek Bridge of about 640m length, in addition to the construction of a major river bridge of about 750m length over the Opobo Channel.
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