Forget about price variation for 2024 projects, Umahi tells contractors
The Minister of Minister of Works, Senator David Umahi has told contractors handling the various federal road projects across the country to forget about Variation of Price (VOP) on any project awarded in 202
Speaking at a meeting with the contractors in Abuja at the weekend, Umahi decried the tactics been deplored by the contractors to attract VOP, stressing his ministry’s commitment to complete all inherited ongoing road projects.
For projects with dualization, the minister directed that all contractors with such projects must as a matter of policy concentrate and first complete one carriageway and turn it over for public use and must within the period maintain the other carriageway for public use.
“All projects we awarded in 2024 will not attract any VOP. And we’ve made it a policy that such projects cannot get any variation. However, within the year and the project execution, if there are issues (God forbid) that do change the basic market prices of construction materials to a certain extent, we will revisit the issue of VOP. And it will not be selective”, he said.
The minister also debunked media reports that the Federal Executive Council, FEC, had stepped down inherited ongoing projects, which he described as misleading.
He assured contractors of the Federal Government’s willingness to engage in contract review and cost augmentation on the inherited ongoing projects given the geometric rise in the cost of contract elements caused by the inherited challenging economy.
Umahi, however, noted that that would be done subject to fund availability.
He said that the decision for Windows to review and augment the cost of inherited ongoing projects was borne out of Mr President’s magnanimity and commitment to completing all inherited and funded ongoing federal government road projects nationwide.
“It was Mr. President, out of his very exceptional magnanimity, that directed that all inherited projects should be made alive through appropriation, promising that he was going to be looking for ways to fund the projects, even outside the budgetary provisions, through the National Assembly.
“What we are doing now is to review the projects in line with the availability of funds and make a proposal to FEC. If such a project has attained about 80% completion, then we propose to FEC that in subsequent appropriation, money should be made available, and such projects should be made a priority, so that they could be completed.
“The Federal Executive Council noted that the review we are doing, and in some cases a few new contracts that we are seeking approval to award, that there is a very large disparity between either the increase in contract costs or the project cost, between what we are looking for and the available funding,” Umahi said.
