Monday, 31 July 2017

Why Julius Berger Suspended Works On Lagos/Ibadan Express Way

The Federal Ministry of Power, Works and Housing under the leadership of former Lagos State governor, Babatunde Raji Fashola, has revealed why international construction company, Julius Berger suspended works on the Lagos - Ibadan Expressway. The ministry said the suspension was as a result of to an outstanding debt of N8.94 bn, on the part of the ministry.

In a statement issued by the Special Adviser on Communications, to the minister, on Sunday, stated that the two contractors working on sections of the Lagos - Ibadan Expressway, Messrs Julius Berger and RCC had given notice of suspension of work on the site.

The minister said the contractors complained that the delays in the payment of agreed contract fees were adversely affecting the pace of work and could lead to default in meeting the completion deadline. Raji said the letter from the Managing Director, RCC, Mr. M. Nakhla, which was dated June 2, 2017, stated,“In view of the irregular payment and the attendant cash flow problem, we shall be constrained to suspend further execution of work unless there is an appreciable improvement in the project's cash flow and adequate funding arrangement is put in place for further works". The minister said he also received a similar letter on June 5, 2017 from Julius Berger , which handles Section 1 of the dual carriageway from Lagos to the Sagamu interchange.

The Julius Berger letter stated,“It has become evident that the required adequate funding for the continuation of the project is not available. We trust that you will understand that, therefore , and as a consequence of the unacceptable financial risk to Julius Berger Nigeria Plc, we are left with no choice than to immediately commence suspension of the works on the project, as earlier notified. Fashola said the letter was co - signed by the Division Manager, Julius Berger, Mr. W. Loesser; and the Commercial Division Manager, Mr. T. Meletschus.

On the way forward , the statement noted that lawmakers at the House of Representatives had pledged to support the minister and his ministry to succeed in the assignment of road construction and rehabilitation nationwide.

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