FG terminates Lagos-Ibadan Expressway contract

on   /   in News 6:59 pm   /   Comments

By Ben Agande

Abuja – More than three years after it was awarded, the Federal government Monday terminated the contract concessioning the Lagos-Ibadan Express way granted to Bi-Courtney Consortium.

In its stead, the federal government engaged the services of Julius Berger Nigeria Plc and RCC Nigeria Ltd to carry out emergency reconstruction of the road.

Minister of Works, Mike Onolememen who announced the termination of the concessioning said adequate measures were taken to ensure that the federal government abided by all its contractual obligations.

He said the termination became necessary because of the “serial breaches of the concession agreement by Bi-Courtney Consortium and especially the failure of the company to reach financial close as provided for in the agreement”.

He said in order to avoid the ‘senseless carnage on this important expressway, the Federal ministry of Works has engaged the services of Julius Berger Nigeria Plc and RCC Nigeria Ltd to commence work immediately on the reconstruction of the expressway.

“While Julius Berger would handle section 1: from Lagos to Sagamu interchange, RCC Nigeria will be responsible for section 11: from Sagamu to Ibadan. The federal government wishes to assure that while it will continue to uphold the sanctity of contracts entered into by the federal government, it will not shy away from implementing provisions of contract agreements dealing with non-performance on the part of the contracting party” he said.

The minister explained that “The legal implications of this termination have been carefully considered by both the Federal Ministry of Works and indeed the Federal Government. If you recall we have been on this issue for quiet sometime now and we have meticulously followed the concession agreement, the provision of relevant clauses of the agreement. We have complied fully with the provisions of this agreement. We have had cause even in the past to write the concessionaire to detail the breaches which it had committed in this agreement in this particular transaction and we have also followed the minimum and maximum number of days the contractor was expected to remedy the situation but failing which the Federal Government had no alternative but to take this course of action”.

He said the ministry can not gauge the percentage of job done by the company because “this is a concessioned project. In other words it is different from the normal EPC contracts, so the Federal Government  in a sense did not make any direct payment to Bi-Courteny in this particular transaction. Bi-Courteny was supposed to raise the fund from the private sector and apply it to the construction of this expressway and toll it for as many as twenty five years, to recoup his investment and this has not happened, and that is why today the concession has been terminated.

“For your information under this concession the construction period is supposed to last for four years and the four years will come to a close in about six months time and right now there is nothing on ground to suggest that the company is capable” he said.

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