FG Terminates Lagos-Ibadan Expressway Contract •Julius Berger, RCC To Commence Immediate Reconstruction

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BARELY 24 hours after President Goodluck Jonathan hinted that
government would soon decide the fate of the concession agreement with
Bicourtney Consortium on the Lagos-Ibadan Expressway, the Federal Government on
Monday announced that it has revoked the contract. It has instead contracted Julius Berger and RCC Limited to
commence immediate reconstruction of the road.
The concession arrangement for the 105-kilometre road constructed
in 1974, was  approved by the Federal Executive Council (FEC) on April 15,
2009 at the cost of N89.53 billion for a period of 25 years under a Design,
Build, Operate and Transfer (DBOT) scheme. 

By the agreement, the concessionaire was expected to reconstruct,
expand and modernise the highway and recoup its investment through toll
collection.

Answering questions on the state of roads in the country
particularly the Lagos-Ibadan and the Benin-Ore roads, President Jonathan had
said during Sunday’s live Presidential Media Chat that  that there were
signs that the concessionaire was not capable of handling the project.
The Minister of Works, Mr Mike Onolememen, in an emergency press
briefing at the Presidential Villa on Monday, said the concession granted to
Bicourtney Consortium has now been terminated because government could not
afford to continue to allow the roads users to suffer. 
Advancing reasons for the government’s action, he said it was
taken especially because of the failure of the company to reach financial close
as provided for in the agreement.
He added: “Due to the senseless carnages 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 Plc and RCC Nigeria Limited to commence work
immediately on the reconstruction of the expressway.”
Onolememen noted that while Julius Berger will handle section 1,
from Lagos to Sagamu interchange, RCC Nigeria Limited will be responsible for
section II, from Sagamu to Ibadan.
“The Federal Government wishes to assure that while it will
continue to uphold the sanctity of contracts entered into by the Federal
Government, it will not shy away from implementing provisions of the contract
agreement dealing with non-performance on the part of the contracting party,”
the minister stated.
It is recalled that in May 2012, South-West state governors had
met with President Jonathan over transport infrastructure in the zone,
particularly the Lagos-Ibadan Expressway. 
The governors were particularly disappointed with the condition of
the road and the fact that the concessionaire had been unable to implement the
project.
Speaking on the legal implication of the agreement termination,
the minister explained that government had carefully considered the implication
and meticulously followed the concession agreement.
According to him, “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 sometime 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 which 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.”

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