Federal Gov’t Terminates Julius Berger’s N740bn Abuja-Kaduna-Kano Road Contract

The Federal Government has finally issued a termination letter to Julius Berger PLC over the construction of Abuja-Kaduna-Zaria-Kano road project reviewed at N740 billion naira.

The termination letter, signed by the Director Legal Services, Federal Ministry of Works, Barr. C.O Assam, said the decision was in accordance with Clause 63 Standard Condition of Contract (Road Works) Volume 1, 1999 Edition with effect from the date of service of the letter.

The letter recalled that the Federal Executive Council (FEC) in its meeting held on September 23, 2024, approved that the contract be re-scoped and reviewed to the sum of N740,797,204,713.25 with expected completion period of 14 months.

The approval asked Julius Berger to complete the outstanding works (flexible pavement) in Section I (127KM), Section II (73.4KM) and Section III (128KM).

The letter also stated that an independent consultant, Yolas Consultants, reviewed the quantities and unit rates which were presented to the Ministry which fixed the contract sum at N710,831,802,660.35 and that Julius Berger initially accepted the work items but later rescinded its acceptance, citing astronomical increase in prices of construction materials.

“The Minister of Works graciously granted the upward review of the unit rates on basic items of work from N710,831,802,660.35 to N740,797,204,713.25 which formed the basis of the FEC approval, despite the Consultant submission.

“Recall further that the above approval was conveyed to your Company as final offer vide letter Ref. No: WR. 15022/Vol.T/304 dated 23rd October, 2024 requesting your Company to indicate in writing an unconditional acceptance form otherwise of the offer within Seven (7) days,” the letter stated.

The Director explained further in the letter that Julius Berger rejected the sum of N740,797,204,713.25 and unilaterally prepared a revised BEME reducing the quantities and increasing the unit rates of work items, thereby altering the work items already approved by FEC.

The letter read in part: “Upon receipt of your letter Ref. No: D12.90.1AKR.L.2024.0190 dated 29th October, 2024 the Ministry viewed your alteration of the work items approved by FEC as a counter offer and therefore unacceptable.

“You have once again deployed your usual delay tactics to further. frustrate the Ministry in delivering the project as scheduled thereby worsening the situation of the road and causing untold hardship to commuters and other road users. This shows clearly you are not interested in continuing with the work.

“Consequently, I am directed to convey to your Company the decision of the Honourable Minister of works to terminate the above mentioned Contract in accordance with clause, 63 Standard Condition of Contract (Road Works) Volume 1, 1999 Edition with effect from the date of service of this letter on you.

“You are also by this letter be informed of the intention of the Federal Ministry of Works to enter upon the site and the Works and take over same from your Company with effect from the date of service of the letter on your Company. The Engineers Representative shall upon service of this letter on you, arrange with you for a joint measurement of work preparatory to taking over the site and work from your Company. This is without prejudice to the exercise of other rights of the Federal government under the Contract.”