Construction Companies Fault FG On New Contracts’ Terms

Philip Daniel Yatai
May, Thu, 2024

Metro

Construction companies fault FG on new contracts’ terms

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Construction companies fault FG on new contracts’ terms

By Angela Atabo

The Federation of Construction Industry (FOCI), has expressed dissatisfaction with the recent standard conditions of contract and directives by the Federal Ministry of Works on road construction.

FOCI is the umbrella body for organised companies and stakeholders in the construction industry in Nigeria, responsible for the regulation of industrial harmony in the construction Industry.

The President of FOCI, Mr Vincent Barrah, stated this at a news conference on Thursday in Abuja, to address the issues between its members and the Ministry of Works .

Barrah said that the FOCI, as the largest employer of labour in Nigeria after the Government, was also worried about the slow pace of work by members within the last one year.

He said that this had resulted in significant loss of employment across the country, thereby increasing the unemployment rate in the country.

He said that the situation if left unchecked would cause disruption in the country’s socio-economic challenges and insecurity.

“We are aware of the recent directives by the Minister of Works, David Umahi.

“A new onerous contract conditions that invalidates the already agreed Standard Conditions of Contract (SCC), are being unilaterally introduced on new and existing projects without due consultation with concerned parties.

“The action of any Ministry or parastatal changing the Standard Conditions of Contract after receiving the Bureau of Public Procurement (BPP) Certificate of No Objection with a different Standard of Conditions of Contract is not in accordance with due process and international best practices.

“If it becomes necessary to change the Standard Conditions of Contract, a collaboration of the relevant Stakeholders is needed.”

Barrah said the stakeholders should include the Bureau of Public Procurement (BPP), Council for the Regulation of Engineering in Nigeria (COREN), Nigerian Society of Engineers, (NSE) among others.

According to him, this is in order to formulate new standard conditions of contract as has always been the practice.

He, however, said that the Ministry has unilaterally decided to treat augmentation of contracts for existing projects as new contracts and insisted that contractors should sign new agreements.

Barah said that the new agreements contained extremely onerous terms developed by the Ministry that if not adhered to would terminate the contracts.

He said that this contravened the prescribed bidding process under the Public Procurement Act, the Certificate of No Objection issued by BPP and the Federal Executive Council’s approval obtained for augmentation of such existing projects.

He said that the determination of contract prices is a function of many factors and every project is unique, so either in augmentation or review of rates, the consideration should be based on its uniqueness and reflect the current realities for it to be effectively implemented.

Barrah said that termination of contract by the Ministry due to inability to fund projects contradicted the provisions of Clause 68 of the Ministry’s Standard Conditions of Contract (SCC) .

He explained that the imposition of at least 15 years road durability warranty obligation on contractors was a deviation completely from the 12 months warranty period agreed for all projects.

He,therefore, said this imposed a huge financial risk and exposure for contractors because it was not in the initial contract signed.

Barrah said that FOCI members had constructed asphalt road projects that have lasted for more than 30 years which were built according to design like road networks in Abuja.

He said that the group was glad that the Ministry was awarding new contracts. However, the continuation of existing contracts should be given the desired attention and urgency it deserves.

The president said that the FOCI had approached the Minister of Works, David Umahi to create an opportunity for a forum to resolve these issues in order to move the construction industry forward.

He, however, said they were yet to receive feedback from the Ministry.

He said that FOCI is patriotic and desires the best for the country and the Renewed Hope Agenda of the present Administration and called on all stakeholders to intervene urgently in the current situation.

The News Agency of Nigeria (NAN), recalls that the Minister of Works, David Umahi earlier this year revealed new parameters for road construction to include, design of the project to be in line with the Ministry’s specification.

Others included agreement on reasonable construction period, there shall be no variation on the project, 100 per cent of one carriage way must be completed before tolling by concessionaires.

“Effective design of road infrastructure anchored on a detailed report of environmental site conditions and geotechnical report among others,“he said, “(NAN)

Edited by Joseph Edeh

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