No more variation on new projects — Umahi

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Minister of Works, David Umahi has said variation of Prices (VOP) over earthwork and other materials for road construction would not be considered over new projects as this administration has agreed that contract sum should be cost at N1,700 to a $1 consideration.

Umahi told contractors that gone are the days when replete VOPs over contracts would be entertained by the federal government.

“We now had very serious inflation after the fuel subsidy was removed. Then again the challenges of the Naira. That made it mandatory that all projects, ought to be looked into.

“What the condition of contracts allowed for contractors is our Variation of price (VOP), this covers only about 4 or 5 items, fuel, diesel, bitumen, and cement and so the ministry looked at this realistically.

“We felt that there is no way you will ask a contractor to use the price of earthwork as at when the job was awarded and by the way some of these jobs have lasted for 18 years, some 11 years.

“When you now do VOP or price variation, you will get as much as 500% increase sometimes, and it is very embarrassing to the government and the ministry and it is not possible for anyone to defend that.

“Issues are taken at face value, so we appeal to Mr. President to do two things, one was to give our envelope in the 2024 budgetary provisions to keep all the inherited projects alive.

“The president directed that that should be done. That is why you see that all of the projects in our budget are ongoing projects but with very poor budgetary allocations of N50m, and N100m imagine an N100m for an ongoing project of 100km but we have to do that.

“We believe that there could be other ways that we could fund these projects including PPP. Then we have new projects, especially the constituency projects of the national assembly which constitute 90% of our new projects.

“Yet these constituency projects are also of very poor budgetary allocation. N100m, N200m. In the 2024 budgetary allocation, we have less than 30 projects that have over 2bn allocation. That is why I said that it is a palliative budget because you cannot use that budget to achieve much.”

The budget is also very useful, it is set in emergency works.

According to him, the federal government inherited an N13trn debt road project which is prioritising for completion.

He said the federal government will not bear the cost of any kind of loss by contractors who would use VOP as a guise to shift their losses to the federal government.

Umahi said the federal government has delivered 80% of the 330 categorized under the emergency roads project by this administration amounting to N260bn.

He said that contractors must align with the new policy of contracts and do their jobs It must work and quote with the prevailing market rate, in the past people have come to say, I used one million liters of diesel, I used 2000 liters of fuel at what stage shall we say?

He said: “You have made enough claims on public office items. It has no limit, we cannot continue like that. If you are quoting for Earthwork know your volumes.

“If your equipment that is supposed to take 100 liters is taking 200 liters, it should not be our problem. If you buy diesel and it gets to the site and it is stolen, it should not be my problem. He said the contractors should be the eyes of the federal government in reporting filling stations that engage in meter adjustment to cheat members of the public distorting our economy.

“If you go to filling station and the meter is adjusted and you suffer a liters shortage, it should not be my problem.

“You can see I am telling you to set a thief to catch a thief because I have been a contractor. So we need to know volumes of these VOP items and the time of quoting for the job,” Umahi stated.

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