FG revokes Bi-Courtney’s Lagos/Ibadan road contract

•Re-awards it to Julius Berger, RCC …Our story, by Babalakin’s firm

From JULIANA TAIWO-OBALONYE, Abuja and NDUBUISI ORJI

The Federal Government yesterday terminated the concession of the Lagos – Ibadan Expressway granted to Bi-Courtney Consortium on May 8, 2009. The agreement was signed on May 26, 2009. The contract has been re-awarded to Julius Berger Nigeria Plc and RCC Nigeria Limited. They are to commence work immediately on the reconstruction of the road.

While Julius Berger would handle section one from Lagos to Sagamu interchange, RCC will be responsible for section two from Sagamu to Ibadan. Bi-Courtney, an indigenous firm owned by Dr. Wale Babalakin, was supposed to complete the road in six months’ time, having agreed to do the job within four years, but the minister lamented that the firm had failed to impress the government. Addressing State House correspondents on the revocation, the Minister of Works, Mike Onolememen, said the termination of the concession was as a result of the serial breaches of the agreement by Bi-Courtney Consortium and especially the failure of the company to implement the financial clause as provided for in the agreement.

The Minister of State for Works, Amb. Bashir Yuguda, was also at the briefing. Onolememen said that in taking the action, the Federal Government observed the rules of disengagement as stated in the agreement, having repeatedly written to Bi-Courtney to remedy the situation, to no avail.

According to him, “due to the senseless carnage on this important expressway which is part of Arterial Route A1, the Federal Government has also decided to embark on the Emergency Reconstruction of the expressway. Consequently, the Federal Ministry of Works has engaged the services of Julius Berger Nigeria Plc and RCC Nigeria Limited to commence work immediately on the reconstruction of the expressway.

“The Federal Government wishes to assure that while it will continue to uphold the sanctity of contracts entered into by the government, it will not shy away from implementing the provisions of the contract agreement dealing with non-performance on the part of the contracting party”, the minister said.

On the legality of the government’s action, he said: “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 quite some time 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 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”.

In terms of percentage payment so far, Onolememen said, “this is a concessioned project. In other words, it is different from the normal EPC contracts, so, the Federal Government did not make any direct payment to Bi-Courtney in this particular transaction. Bi-Courtney was supposed to raise, he (Dr. Babalakin) would have been able to raise the fund from the private sector and apply it to the construction of this expressway and toll it for as many as 25 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 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”.

On whether it was a mistake giving the concession to Bi-Courteny, he said,“I would not want to say that it was a mistake, because though I was not in the office as at that time, perhaps at that time, they had the most responsible bids, the details are best known to the then minister of works and his team that handled the project. But again, it is not out of place to give Nigerian companies the opportunities to handle projects of this nature. This is our country, who- ever has the ability and the capacity to do projects of this nature we believe should be encouraged”.

On the percentage of work done on the road he said, “I will leave that for those who use the road. As far as we are concerned, the terms of work had not been complied with”. Recall that the road whose concession arrangement was approved by the Federal Executive Council (FEC) on April 15, 2009 as announced to reporters, by Dr Dora Akunyili, the then Minister of Information and Communication, has remained unattended to three years after.

The concessionaire for the 105-kilometre road constructed in 1974, was Bi-Courtney Highway Services Ltd. (BCHSL), The agreement was approved at the cost of N89.53 billion for a period of 25 years under a Design, Build, Operate and Transfer (DBOT) scheme.

The concessionaire was to reconstruct, expand and modernise the highway and recoup its investment through toll collection. Three years on, Bi-Courtney had not demonstrated that it has the financial and technical resources to deliver. This is evident in the deplorable state of the road. Beyond the regular display or shifting of billboards and patch work, the company has done virtually nothing to make the road less dangerous.

The expressway is one of the major gateways to the Eastern and the Northern parts of the country. Its strategic importance to inter-regional commerce in the country, the incalculable losses in both human and material resources through frequent motor accidents, made it imperative that immediate steps are taken to move the project forward.

In its reaction, Bi-Courtney said the government was not fair to it in terminating the contract. The company which spoke yesterday through its spokesman, Mr Dipo Kehinde, said the concessionaire agreement was a partnership, which entailed the Federal Government would collaborate with it to actualize the project. He said unfortunately, the government did not do any of the things it was supposed to do in the agreement. Kehinde, who stated that it took the government two years to approve the design of the road, said Bi-Courtney did everything the government asked it to do in respect of the project.

“They (Federal Government) didn’t give us the necessary support. When the South- West governors were fighting us, the Federal Government was watching the fight. They didn’t stop the governors. It took the government two years to approve the design for the road”, he stated. The company said already, it has committed enormous resources in mobilizing contractors to site and in engaging international consultants like Aurecon and Clifford Chance who are working on the road.

Besides, Mr Kehinde said the government had in recent times sent two delegations including a director from the Federal Ministry of Works to inspect the road. He said in the two instances, the delegations were satisfied, noting that the Sagamu axis of the road would be completed by December.