The Federal Government and leading road construction companies working on several major highways across the country may clash any moment from now following the decision of the government to dump asphalt for concrete technology, findings by The PUNCH have revealed.
The new Minister of Works, David Umahi, had last week directed all contractors handling Federal Government highways across the country to immediately dump the use of asphalt and adopt concrete technology.
The minister further directed the contractors to meet with engineers of the ministry to redesign all the ongoing Federal Government road projects in line with the requirements of concrete technology. As a result, several ongoing highway construction projects will be stopped.
According to findings by The PUNCH, some of the ongoing federal highway projects that may be suspended as a result of the minister’s directive are Benin-Warri dual carriageway and Benin-Sapele sections 1-3 in Delta State, Maraba-Keffi road expansion in Nasarawa State, and Minna-Zungeru-Tegina-Kontagora road in Niger State.
The list also includes Zaria-Funtua-Sokoto-Shema road in Kaduna State and some parts in Gusau in Zamfara State, Mubi-Maiduguri and Bama-Konduga-Maiduguri road in Adamawa and Borno states.
Some of the major construction companies working on ongoing highway projects that will be affected by the minister’s directive include China Harbour Engineering Company, Gilmour Engineering Nigeria Limited, CBC Global Civil & Building Construction, Setraco Nigeria Limited, Decency Associates Limited, and Zephrygold International Limited.
Others include Levant Construction Company Limited, Geld Construction Company Limited, Triata Nigeria Limited, SKECC Nigeria Limited and Mothercat Nigeria Limited.
Already, the minister has reportedly directed the Bureau of Public Procurement to withdraw Certificates of No Objection issued for all federal road contracts awarded by former President Muhammadu Buhari’s administration under the former Minister of Works, Babatunde Raji-Fashola. This, however, could not be confirmed as of press time.
Meanwhile, contractors handling ongoing highway projects across the country have protested against the directive, describing the move by Umahi as an alleged breach of contracts that could lead to huge losses on the part of the government.
They said the decision by the minister to abruptly order contractors to dump asphalt for concrete technology was tantamount to “shifting the goalposts in the middle of the game.”
According to them, construction companies have invested several millions of dollars in asphalt technology equipment and also imported bitumen and other raw materials running into billion of naira, adding that shifting to concrete technology at the current stages of the road projects will lead to millions of dollars in losses.
Top officials of construction companies told The PUNCH that if the minister failed to reverse the directive, some contractors might have no other choice but to approach the court to look into the matter.
A top executive of a leading construction firm, who chose to speak on condition of anonymity, said, “What the minister is trying to do will lead to chaos. This is one of the reasons foreign investors shy away from doing business in Nigeria-a situation where the government wakes up and decides to change the terms of contracts. It is not done anywhere. These contracts in question have been approved by the Federal Executive Council, Certificates of No Objection have been issued by the BPP. The designs for the roads were approved by the Ministry of Works. Contractors have imported bitumen from overseas, personnel and asphalt technology equipment have been deployed in sites and works are ongoing already. How can these work stages be reversed just like that?”
Findings show that the minister’s directive will lead to immediate suspension of works on all sites across the country, redesigning of the roads from asphalt to concrete by Federal Ministry of Works and Housing’s Department of Highway (Bridges & Design), and re-tendering or variation of contracts.
Officials said the development would lead to new investments in equipment for construction of roads with concrete technology, commencement of importation of cement due to lack of domestic capacity to produce cement for roads and other building projects in Nigeria.
Some analyst claimed the development might lead to increased congestion at the ports and ports access roads.
According to them, it will also lead to increase in demand for forex for importation of cement and iron rods which will put more pressure on the naira, while also noting that it will lead to increase in cost of construction of road per kilo metre.
Industry analysts said the looming clash between the government and the contractors might lead to litigation that might cost both parties huge sums of money.
It was learnt that the contract agreements have liquidated damages clause.
The contractors have in place as condition a 10 per cent Performance Guarantee from acceptable banks (a total sum of N140bn for N1.4tn) for roads under the NNPC 11 national select/approved roads which are spread across the North-West, North-East, South-South and South West zones of the country.
Umahi has argued that cement technology is needed to achieve durable roads in the country.
He also said he was not move by plan by some contractors to go to court, adding that he was ready to fight them.
He said, “ There is a binding law. It is called general condition of contract and it is a regulation that all engineers must conform to. In our contract agreement with all contractors for every project, we bring general condition of contract as part of the requirement of that contract and it is binding. I will read Clause 51 of the conditions to remind those contractors that want to initiate court action.
It states that the engineer shall subject to the approval of the employer, make any variation of the form, quality, or quantity of the works or any part thereof that may in his opinion be necessary and for that purpose or if for any other reason it shall in his opinion be desirable.
I am ready to fight anyone who wants to go to court. I did contract law at my university and I know what my limits are, a client can state whatever specifications on any contract signed. We can change from asphalt to concrete.”
The minister has also said ongoing road projects that are more than 20 per cent may not be affected by the directive.
However, contractors have insisted that considering the huge amount firms have spent on equipment and raw material imports, the cost of changing to concrete technology will be too huge for the government to bear.
Commenting on the development, an industry expert and Chief Executive Officer of Reo-Habilis Construction Limited Mr Kunle Awobodu, advised the government and the contractors to resolve the matter amicably.
He advised the Federal Government to give a reasonable time frame within which the contractors can be asked to shift to concrete technology.
“The government can give say six years or more for a shift from asphalt to concrete technology. Moving suddenly can cause some issues which both parties may find it difficult to manage,” Awobodu, a former Chairman of the Nigeria Institute of Builders advised.
Awobodu further explained, “So, our fear is that if they start diverting our cement for road construction, it will affect the building sector severely. All stakeholders must sit, discuss and strike an agreement; and there should be some sort of understanding, examining the pros and cons of the minister’s intention and asking the following questions. Was it politically motivated? Is it intended to create patronage for cement manufacturers? Or was it focused on the lifespan of roads? All these issues must be tabled, and a technical committee set up to look into them. So, there must be a recess for technical analysis and cost implications for the government to make a decision either to allow ongoing projects to be completed before thinking of concrete roads. There should be a timeline that would enable all companies to prepare for the switch to concrete, probably a six-year timeline to change completely. It shouldn’t be too sudden and his statement too has to be interrogated.”
Also speaking with The industry expert and Project Supervisor with Zenith Construction, Akaninyene Ikopbo, said that based on the review demanded by the Federal Government, additional funds would have to be provided in order for the contractor to do a quality job.
He noted that while concrete-based constructions offer more durability compared to asphalt, they are usually more expensive.
“If the contractors are demanding for additional money, the Federal Government should give it to them. The cost of construction will go up. If the minister is demanding that they change to concrete, then everything will change. The design will change. So, the government has to pay.
“Concrete is made of crushed stone, sand, and gravel, but the binding agent is a cement paste, which is made from a mixture of cement and water. When dried, the gravel base aggregate and cement concrete form an extremely durable surface that can last longer than asphalt—even under heavy traffic conditions. A concrete driveway can last 50 years or more if it’s the proper thickness to support vehicles and receives the required maintenance.”
Also, contractors have also argued that while concrete technology is desirable, changing suddenly could not work under the present circumstances.
“Concrete technology is good because it can last for about 50 years compared to asphalt which lasts for about 20 years. But our argument is that we can’t change suddenly. Also, the cost of building cement technology roads is twice that of asphalt. Moreso, while you can use asphalt roads after three hours, you can’t use comment technology until after 28 days. This means it will take more years to complete such road projects. We need to look at such implications too. Most importantly, is the government ready to face the cost implications?” a contractors argued.