For
each day the road is left unconstructed, the construction company is to pay a
penalty of N100, 000 per kilometre, and same charge applies for a square meter
of an undone bridge along the express route, the terms of the contract signed
with the federal government states.

With
nearly 135 kilometers, and at least half a dozen bridges, the fines tip into
several billions for the more than 1,095 days – three years – the contract has
been in limbo.

The provisions, a striking component in the concession agreement
between the government and Bicourtney, highlight what seems an ambitious effort
at averting the violations that have now crippled the road contract for years.

Yet, despite the failure, and a growing public frustration with
the delay, the government and Bicourtney have cautiously evaded concerns about
stipulated penalties including fines, timeline extensions and refunds.

Bicourtney denies liability for the hitch that has seen the
contract not executed, while the federal government rules out exploring
punitive measures in an ongoing review of the contract personally been
supervised by President Goodluck Jonathan.

What the agreement says

An examination of the contract agreement by PREMIUM TIMES provides
an insight into an extensively lucrative deal matched by a nearly equal dose of
safeguards against breaches.

Widely presumed a failed concession deal after three years, the
details point to likely measures each party is entitled to in the event where
the other party is culpable for a breakdown.

Besides monetary fines, the government reserves a revocation
right on the project, now one of the nation’s most contentious, the 103-page
document says.

But for all such penalties, the agreement signed May, 2009
stipulates, it must be clear Bicourtney bears responsibility for the delay.

Where the government is liable for delay in the execution of the
contract, there would be commensurate time extensions, alongside a defraying of
the inflationary cost on the initially agreed construction value, the 103-page
document adds.

Asked whether it believes delaying the delivery of the job has
imposed such responsibilities on the company, or whether the Jonathan
administration has raised such concerns with it, Bicourtney said penalties were
not as literally stated in the agreement, and more so, it bore no
responsibility for the delay.

“People think it’s all Bicourtney’s fault, but it is not,”
company spokesperson, Dipo Kehinde, told this website recently. “There are many
factors and interests disrupting the flow of our work.”

The company has also made no hints at pressing for a due
extension of time if it appeared the government was responsible for the delay,
although the administration has reportedly ruled out a rescheduling.

The federal government’s representative in the deal, ministry of
works too, said a review of the contract was ongoing; hence, comments on any
aspect of the concession could only be expected after the evaluation.

However, officials conversant with government plans, who spoke
on condition of anonymity because they had no authority to speak on the matter,
say there were no considerations of penalties against the company for the
delay.

“No one is looking at that I can tell you in confidence,” one
source told PREMIUM TIMES. “The concern is how to get the job on track. Like I
said, the entire agreement is being reviewed.”

Such attitude by the two parties, itself a breach, strikes at
the heart of the seeming negligence and indifference that have bedeviled the
project and its troubled agreement for three years.

Awarded May 8, 2009, the Build, Operate and Transfer contract
authorizing Bicourtney to construct the federal road and run it for 25 years,
was awarded for N86.5 billion.

A public private partnership novel to the Nigerian
infrastructural system, the contract was to allow the company four years to
construct the busy expressway and, recoup its investments through a broad range
of rights stretching from charging food vendors on the road, to vehicular
tolling.

The rewards, amongst some of the most liberal and lucrative,
authorize Bicourtney to earn from toll tariffs, all forms of advertising,
rental fees on encroaching properties, licensing and charging of providers of
all services including hotels, restaurants, termini, fuel stations, trailer and
motor parks, fuel depot, telephone and internet services, vehicle repair.

Also, under the arrangement, the company will be entitled to
licensing and charging, all for 25 years, the installation of pipes, cables,
railway lines, drains underneath and oil, gas, water pipelines, storage
facilities.

Each year however, the consortium will remit to government, N100
million annually (or its equivalent reflecting inflation) in addition to five
percent of its gross profit, the agreement states.

The document was signed May 26, 2009 with a stipulated start of
construction date set at within 90 days later – August 26.

Three years on, the job has yet to fully take off.

Such violation, save for any government-induced delay- which
itself is punishable- or a force majeure involving natural disasters like
earthquake, would have drawn severe penalties in billions of fines, if the
concession agreement is adhered to.

“In the event that due to the fault of the concessionaire,”
Article 9.3 of the document states, the concessionaire abandons or is deemed to
have abandoned the construction works as provided under Article 9.4, the
concessionaire shall pay to grantor by way of liquidated damages.”

The ensuing article 9.4 defines abandonment as failing to
commence work within 30 days from the 90 days-commencement date, or failing to
complete the job within 30 days after the target completion date-four
years(except where extended.)

Both cases are excused only in the event of a natural disaster
or the default of the federal government. Even so, failure to resume 21 days
after the end of the disaster amounts to the same liability.

Such failure would attract “liquidated damages” of N100 thousand
per kilometer of road or meter square of the bridges unconstructed each day.

And where the government is culpable for the delay, adequate
extensions of schedule and payment for increase in construction cost are to be
effected.

Government not keen on punishing Bicourtney

But amidst an array of blame-trading, the provisions are as
breached as the terms of a construction that is meant to provide relief to the
road’s thousands of daily users.

Official sources told PREMIUM TIMES the government is concerned
more with delivering on the job than collecting fines.

The position rhymed with the position canvassed by the Works
minister weeks back. “The government is already engaging the concessionaire in
a bid to find the way forward,” the minister, Mike Onolememen, had told the
media on the progress of the contract. “What is important is that government is
committed more than ever before to delivering that road and doing it quickly
considering the economic potential of the road.”

Last Tuesday, Mr. Jonathan called in a few officials including
Mr. Onolememen, for deliberation on the prospect of salvaging the contract
through an amendment of terms, officials privy to the discussions said.

No political will

It is yet unclear the extent of the reviews, and whether they
will extend through the penal provisions of the agreement.

But presidential spokesperson, Reuben Abati, hinted on the
president’s posture in an article last week citing Mr. Jonathan’s directive to
Bicourtney to “fix the road or get out.”

However, government is yet to demonstrate the political will to
invoke stipulated sanctions on Bicourtney for the devastatingly long delay by a
company accused of defaulting on a key project, those who spoke to PREMIUM
TIMES maintained.

Bicourtney too, has not said it is poising for reparations.

Yet, both sides inherently blame the other for the delay in a
complex and costly  wrangling that impacts only on the lost lives and
properties that the Lagos-Ibadan expressway, one the nation’s busiest highways,
continue to record.

The blame game

While the government faults Bicourtney’s three-year tardiness,
the company cite the late approval of its design in 2011 by the federal
government, political interference, unresolved right of way, confiscation of
its tools by the Ogun state government and an “unbankable” agreement as factors
responsible for the delay.

For one, even where the right of way had been resolved, and the
design long approved, Bicourtney has made it clear it lacks the funding to fix
the road after local banks rebuffed its investment proposals.

The company says it now counts on a South African financier,
Rand Merchant Bank, Yolas for funding.

Discussions on the partnership continued with the bank even up
till last week, the company said.

One year to go

On another hand, were the company to have resolved its financial
troubles earlier, the right of way, involving demolitions and compensations yet
unresolved by the federal government, would seem to still have pandered into
the hands of a company facing several obstacles in the execution of the job.

Bicourtney has a year to deliver on the project, a mission many
believe is impossible, given that construction is yet to begin.

But the company spokesperson, Mr. Kehinde, remains optimistic
that the road could be ready for commissioning by August 2013.

“If everyone played their roles, the construction does not take
time,” he said.