FG Terminates Julius Berger’s N740bn Contract

The Federal Government has officially terminated the N740 billion contract awarded to construction giant Julius Berger for rehabilitating the Abuja-Kaduna-Zaria-Kano dual carriageway.

This decision follows a prolonged back-and-forth between the Ministry of Works and the construction firm over revised contract terms and cost evaluations.

In a statement issued by the Director of Press, Federal Ministry of Works, Mohammed Ahmed, the Ministry explained that the termination was inevitable, citing the company’s refusal to accept the government’s downward revision of the contract sum to N740 billion from the initially proposed N797.2 billion.

According to the Ministry, Julius Berger’s management was invited to a crucial meeting to finalize the revised terms, but the construction company allegedly failed to attend, prompting the government’s decision.

“It is a sad commentary on the Company that rather than accepting the offer, they tinkered with the Bills of Quantities, as well as that of Engineering Measurements and Evaluation via a letter to the Ministry dated 29th October, 2024. The company was summoned for a meeting with the Management of the Ministry, today, 4th November, 2024 but refused to show up, hence the termination of the contract based on effluxion of time and non- performance.”

“Based on non-compliance with reviewed cost, scope and terms, stoppage of work and refusal to remobilise to site, as directed, the Federal Ministry of Works has issued a 14-day Notice of Termination to Messrs Julius Berger (Nig.) Plc for the Rehabilitation of Abuja-Kaduna-Zaria-Kano Dual Carriageway in FCT, Kaduna and Kano States, Contract No.6350, Section I (Abuja-Kaduna), today, 4th November, 2024.”

He said the decision was borne out of several months of back and forth without any meaningful progress was reached at management meeting between the Ministry and Julius Berger.

Recall that the Contract for the road was awarded to Julius Berger in 2018 and was supposed to cost less than N155.7bn with a 36 months completion date.

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But the cost rose to over N600 billion and 6 years after less than 50 percent of the road had been completed.

Ahmed noted that the ministry has in the last 13 months been in constant talks with the company, in order to reach an amiable position on the said alignment but to no avail.

“Nigerians may wish to know that the contract for the Rehabilitation of the Abuja-Kaduna-Zaria-Kano Dual Carriageway, which was divided into three (3) Sections was awarded to the company on 20th December, 2017 and flagged off by the then Minister of Power, Works and Housing, H:E. Babatunde Raji Fashola at an initial sum of N155.7bn on 18th June, 2018.

“Sections II (Kaduna – Zaria) and III (Zaria – Kano) were partially completed and handed over during the twilight of the administration of former President Muhammadu Buhari, GCFR. Since then it has been one variation and augmentation or the other and finally, the present Minister of Works directed for the redesigning and re-scoping of the Section I of the contract.

“The alignment was divided into two with one phase redesigned to be on continuously reinforced concrete pavement (CRCP), while the remaining with asphaltic pavement. Approval for the Section I, Phase 1 for a length of 38 (thirty-eight) kilometres on concrete pavement was given to Messrs Dangote Industries (Nig.) Ltd, while the remaining 127 (one hundred and twenty-seven) kilometres remained with the substantive contractor. The Phase 1 was flagged off on 17th October, 2024 with a 14-month completion period.

“Due to the stalemate of the contract and, most importantly, the desire of His Excellency, President Bola Ahmed Tinubu, GCFR, as encapsulated in the Renewed Hope Agenda infrastructure initiative, to see to the completion of this laudable project, also to alleviate the sufferings of Nigerians plying the road, the Ministry re-scoped it and got the approval of the Federal Executive Council (FEC). The award for the Re-scoping and Downward Review of Contract for the Rehabilitation of Abuja-Kaduna-Zaria-Kano Dual Carriageway in FCT, Kaduna and Kano States, Contract No.6350, Section I (Abuja-Kaduna) in favour of Messrs Julius Berger (Nig.) Plc from the sum of N797.2bn to N740.7bn was granted by FEC on 23rd September, 2024 and conveyed to the company on 3rd October, 2024.

“As due to the socio-economic importance the road as a vital artery connecting Abuja, the FCT to the North, the Ministry conveyed the approval for a Final Offer on the Abuja – Kaduna Dual Carriageway to the company on 23rd October, 2024, stating that it should agree, in writing, to accept the reviewed contract sum of N740.7bn within seven (7) days or risk the termination of the said contract.”