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The Federal Government has finally issued a termination letter to Julius Berger Plc over the construction of the Abuja-Kaduna-Zaria-Kano road project reviewed at N740bn after a dispute over project costs and implementation.
The termination letter, signed by the Director of Legal Services, Federal Ministry of Works, C.O Assam, said the decision was in accordance with Clause 63 Standard Condition of Contract (Road Works) Volume 1, 1999 Edition, with effect from the date of service of the letter.
Recall that the Federal Government had on November 4 issued a 14-day notice of contract termination to Julius Berger over alleged non-compliance with reviewed cost, scope and terms, stoppage of work and refusal to remobilise to the site on Abuja-Kaduna-Zaria-Kano Dual Carriageway, Section I (Abuja-Kaduna).
The ministry in a statement issued by the Director of Press and Public Relations in the Federal Ministry of Works, Mohammed Ahmed, explained that the decision, which was borne out of several months of going back and forth without any meaningful progress, was reached at a management meeting of the ministry.
However, the Federal Ministry of Works, in a letter of termination of the contract addressed to the Managing Director of Julius Berger and dated November 21, said the contract was cancelled due to the contractor’s alleged uncooperative behaviour and repeated delays.
The ministry explained that the contract was originally scoped at N740.8bn for completing 328.4 kilometres of road across three sections.
According to the letter signed by the Director of Legal Services, an independent consultant initially reviewed the contract, fixing the sum at N710.8bn.
The ministry claimed that it had subsequently approved an upward review to N740.8bn, which the contractor reportedly rejected.
It accused the contractor of employing “delay tactics” and unilaterally attempting to modify work items already approved by the Federal Executive Council.
To this end, the minister stated that the contractor’s proposed revisions, which involved reducing quantities and increasing unit rates, were deemed unacceptable by the ministry.
Invoking Clause 63 of the Standard Conditions of Contract (Road Works), the ministry declared that the government would take over the project site immediately.
It stated that the engineers’ representative will conduct a joint measurement of completed work preparatory to the site takeover.
“I am directed to refer to the above contract and to invite you to recall the approval of the Federal Executive Council in its meeting held on 23rd September 2024 whereby the above Contract was re-scoped and reviewed to the sum of N740,79bn with expected completion period of 14 Months for the completion of the outstanding works (flexible pavement) in Section I (127Km), Section II (73.4Km) and Section III (128KM).
“It should be noted that an independent Consultant, Yolas Consultants, reviewed the quantities and unit rates which were presented to the Ministry, which fixed the Contract Sum at N710.83bn, and your Company initially accepted the work items but later rescinded your acceptance, laying claims to astronomical increase in prices of construction materials.
“The Honourable Minister of Works graciously granted the upward review of the unit rates on basic items of work from N710.83bn to N740.79bn, which formed the basis of the FEC approval, despite the Consultant submission.
“Consequently, I am directed to convey to your company the decision of the Honourable Minister of Works to terminate the above-mentioned contract with clause 63 Standard Condition of Contract (Road Works) Volume 1, 1999 edition, with effect from the date of service of this letter on you’’, the statement stated.
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