Contractor accuses ministry of works of inflating road projects

Drama ensued at the House of Representatives Ad-hoc Committee investigative hearing on Thursday as a construction company, DC Engineering Limited accused officials of the Federal Ministry of Works of inflating a road contract from N9.8 billion to N54.3 billion.

Construction and rehabilitation of 41-kilometre Ijebu-Igbo Ita Ibadan Road has been halted for over five years after its award of contract and became a source of deep concern leading to the setting up of an Ad-hoc Committee by the Speaker, Rt. Hon. Tajudeen Abbas.

The Executive Director of DC Engineering Ltd, Engr. Ade Adedeji who was summoned for appearance by the Chairman of the Committee, Hon. Kwamoti Bitrus Laori, revealed in full glare of the public that the contract was supposed to be completed within two years but it took the Federal Ministry of Works five years (2018 to 2023) before it was able to pay 15 percent mobilisation fund of N1.3 billion.

Armed with documents, including the letter of the award of contract, Engr. Adedeji alleged that having been inflated, it became a challenge for the Federal Government to fund the project.
“The slow pace of work was due to lack of release of funds,” he said.

According to him, the 15 percent mobilisation fee was paid in several instalments until about a few weeks ago when the last instalment of the 15 percent was paid.

Adedeji said his company had approached the Ministry of Works to review the contract sum from N9.8 billion to at least N14 billion due to the high cost of materials, but the ministry of works refused.

He said they were surprised to notice that the same ministry that refused to review the contract upward to at least N14 billion, re-awarded the same contract to AREATECH Construction Ltd at the sum of N54.3 billion without the termination of their contract.

The Director of Highways South, Federal Ministry of Works, Engr. Adedamola Kuti, who represented the ministry before the committee, said the ministry had terminated the contract of DC Engineering since September 2022.
He was, however, silent on why they refused to review the contract sum upward to at least N14 billion as requested by the DC Engineering but went ahead to re-award the same contract to another company, AREATECH Construction Ltd at the sum of N54 billion.

When asked to provide the details – letter of termination of contract with DC Engineering Ltd, certificate of no objection from the Bureau of Public Procurement (BPP) to AREATECH Construction Ltd and Federal Executive Council’s approval letter, he promised the probe panel that he will go and come back.

In the submission of the Solicitor, Tolu Babaleye & Co on behalf of the DC Engineering Ltd, the company alleged that the activities of Hon. Tolulope Akande Sadipe, a member representing Oluyole Federal Constituency of Oyo State, has been frustrating the efforts of his client to execute the project.

“Our Client is also very much aware of the activities of Hon. Tolulope Akande Sadipe, a member representing Oluyole Federal Constituency whom our client informed us has turned to a torn in its flesh and who has been promoting AREATECH Construction Ltd as contractor to the Federal Ministry of Works and Housing for the contract to be re-awarded to the said company for a reason best known to her.

“This vexed issue is known to everyone in the ministry, especially two particular directors working hand in hand with them and all attempts have been made to re-award the contract for the sum of 54.3 billion Naira from the initial contract of 9.8 billion Naira to AREATECH Construction Ltd whom we understand had signed an agreement with the ministry and had submitted advance payment guarantee from its bank.

“This is a big distraction to our client. Please note that our client wrote for an upward review of this contract sum to an amount far below 54.3 billion Naira but the request was ignored and yet some people in the ministry wanted to re-award the job to someone else for 54.3 billion Naira all in a desperate attempt to defraud the Federal Government of Nigeria,” the Solicitor to DC Engineering Ltd said in a statement submitted to the ad hoc committee.

Responding to the allegation of Hon. Sadipe’s involvement in the contract, the Director of Highways South, Federal Ministry of Works, Engr. Adedamola Kuti denied having any deal with Sadipe.

However, he admitted sending her a congratulatory message after she emerged victorious in the last general election.
Sadipe also denied having any relationship with the contractor,
AREATECH Construction Ltd, threatening lawsuit over the allegations against her.

The Chairman of the Ad Hoc Committee, Hon. Kwamot Bitrus Laori said the committee is not witch-hunting anyone but to ensure they get to know the cause of failure of the road project and the way forward.

He allayed the fear of the DC Engineering Ltd, that the company will not get justice from the probe panel since Sadipe is also a member of the parliament and a mover of the motion resulting in the setting up of the ad hoc committee.

Laori said though the committee was set up at the instance of Sadipe’s motion, she is not a member of the committee and she has been excluded from all the committee’s activities except her invitation to respond to the allegations against her.

On Engr. Adedamola Kuti’s position that the contract of DC Engineering Ltd with the Federal Ministry of Works has been terminated in September 2022 and that the company is owing the ministry, the committee was thrown into a confusion when the Executive Director of DC Engineering Ltd, Engr. Ade Adedeji said the ministry had just paid some amount of money to them about two weeks ago as part of the 15 percent mobilisation fee.

When Laori asked the host communities of the said project to clarify which company is now handling the project or whether no contractor is on site, the Chairman of Olojuoro Road Joint Communities Forum, Oluyole LG, Oyo State said, “We are not aware of any contractor on the site apart from DC Engineering Ltd. Their equipment as at July, 2023 were on the site doing ‘palliative work’.

“I called it palliative work because it is only the critical aspect of the job we wanted them to do; there is no fund according to them to do everything.”
DAILY POST correspondent learnt that the present Minister of Works, Senator David Umahi in a recent meeting with the contractors and some top officials of the ministry warned against sharp practices and shady deals.

Engr. Kuti also confirmed the meeting between Umahi, contractors and top officials of the ministry but did not give any detail about it.
The representative of the Public Complaints Commission, Hon. Asuwaju Folawuyo Bello, (Commissioner, Oyo State) blamed the mess of the Nigerian Roads on the activities of the ministry of works officials.
Bello, who said they have received several complaints over the said project, expressed dismay on how a project that is supposed to be completed within 24 months (two years) will take the Federal Ministry of Works five years to pay only 15 percent of the contract sum.

The ad hoc committee chairman, Laori directed the Federal Ministry of Works and all other relevant parties to submit the required documents to the committee’s secretariat before or on Monday 11 September, 2023