Construction firms desert sites over unpaid N500bn

Big construction firms handling roads and other infrastructural projects in the country have abandoned their sites, New Telegraph has learnt. The absence of the contractors from their duty posts may not be unconnected to the inability of the Federal Government to pay them the over N500 billion allegedly owed them for completed projects. New Telegraph’s investigations showed that contractors handling the Lagos-Ibadan road expansion project, Messrs Julius Berger Plc and RCC have reduced the pace of work.

Some of the staff cited on sites were executing skeletal jobs. In Abuja, Julius Berger had already stopped construction works on the Abuja centenary city project. When our correspondent visited the company’s headquarters in Abuja recently, the place was not its usual self. New Telegraph gathered that the company had embarked on job cuts to be able to cope with the attendant lean resources. It will be recalled that the former Minister of Works, Mike Onolememen, had revealed that the ministry’s N100 billion proposed budget for 2015 had been cut down to N11 billion by the Ministry of Finance.

He stated that the finance ministry took the drastic action due to the economic realities on ground. Onolememen also expressed concerns that only 33 out of the 210 ongoing road projects had been provided for in view of the lean allocation to the ministry, adding that the budget was insufficient to encourage contractors to sustain significant progress on their respective work sites. Worried by the money owed his members by the Federal Ministry of Works, President of the Federation of Construction Industry (FOCI), an umbrella body for about 125 major construction companies operating in Nigeria, Mr. Solomon Ogunbusola, told our correspondent that most of the construction firms have abandoned their sites. He alleged that most of the projects executed by FOCI members were done with funds borrowed at very high interest rates from commercial banks.

The FOCI boss called on President Muhammadu Buhari to bail contractors out by declaring a state of emergency in the construction industry. The directive given to commercial banks by the Central Bank of Nigeria (CBN) to blacklist contractors indebted to them (banks) irked Ogunbusola. He stated that the Federal Ministry of Works alone owes contractors over N500 billion for projects already executed and delivered, wondering why the same government, which owes (contractors), would allow its agency, the CBN, to publish their names as chronic debtors. He said: “We have retrenched a lot of people, and we are still retrenching people and the process will continue until when we get to a stable position. We need an emergency intervention. Government should declare a state of emergency in the construction industry.” Ogunbusola, a builder, said that the country might not witness major development if the construction sector is pushed to the background.