The Federal Government on Monday terminated the concession of the Lagos-Ibadan expressway granted to Bi-Courtney consortium on May 2009.
The termination of the concession contract follows the promise made by President Goodluck Jonathan during Sunday’s media chat where he promised to ‘fix the Lagos-Ibadan expressway’.
“As a responsible government, I don’t think we can allow Nigerians to continue to suffer. All of us in government, we feel pained that the country is held ransom because of a transaction that probably was not consummated properly because of some kind of issues. But we cannot continue like this, we will intervene on that road,” President Jonathan had said.
Announcing the end of the contract between Bi-Courtney and the government at a press conference in Abuja, the Minister of Works, Mike Onolememen said the termination of the concession is consequent on the serial breaches of the concession agreement by Bi-Courtney consortium and especially the failure of the company to reach financial close as provided for in the agreement.
The Minister said: “The Federal Government today terminated the concession of the Lagos-Ibadan expressway granted to Bi-Courtney Consortium on 8th May, 2009.
“The termination of the concession agreement by Bi-Courtney consortium and especially the failure of the company to reach financial close as provided for in the agreement.
“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 R.C.C Nigeria Limited to commence work immediately on the reconstruction of the expressway.
“While Julius Berger would handle handle section 1: from Lagos to Shagamu interchange, RCC Nigeria Limited will be responsible for section II: from Shagamu 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.”
On the legal implication of terminating the contract 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 quiet 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 concessioneer 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”.
“In terms of percentage payment so far, this is a concessioned project. In other words it is different from the normal EPC contracts, so the FG in a sense did not make any direct payment to Bi-Courteny in this particular transaction. Bi-Courteny was supposed to raise, he 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 for 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 to have given 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 is 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 opportunities to handle projects of this nature. This is our country, whoever 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 has not been complied with”.