Economy

Contractors to indemnify FG for non-completion of projects

by Editor

March 12, 2013 | 11:34 am
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The Federal Government is to include an indem­nity clause in all contrac­tual agreements, beginning with the 2013 budget, as part of new measures to ensure proper execu­tion, completion and quick delivery of all projects.

The new measure is being pro­posed by the Presidential Inter-min­isterial Committee which investi­gated the execution of Ecological projects in the South-East, following the discovery that most contractors have short- changed government, by either abandoning projects, or using poor quality materials.

It was also discovered at the weekend, that the government would need well over N50 billion to tackle erosion and other ecological challenges in the South-East alone.

So far, only about N11.5 billion has been pledged by government in response to the N50 billion proposed by the Federal Ministry of Environment for tackling the problems.

But Emeka Eze, head of the Presidential Inter-ministerial Com­mittee on verification of Ecological Projects in the South –East, and Director-General of the Bureau for Public Procurements, while review­ing the outcome of its extensive tour of projects in the area, observed that beginning with the 2013 budget, all contractual agreements would include indemnity clauses, to en­able government recover its funds from the contractors, should such projects fail.

The committee also discovered that the contractor awarded con­tract for the execution of the Nkisi Water projects in Onitsha, might have absconded with the money

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and abandoned the project even after collecting loans from the An­ambra State Government for the same project.

The action of the contractor, BusinessDay gathered, forced the state government to urge the Fed­eral Government to hands-off the water project and re-arward the

state government to urge the Fed­eral Government to hands-off the water project and re-arward the contract to another firm.

Anambra State governor, Peter Obi, revealed this at the weekend at Nikisi, in Onitsha, while conducting the presidential team around the erosion control project at the Onit­sha Water Works.

Obi said: “We have asked the Federal Government to hands-off the water project after it was awarded twice and the contractor collected the money without executing the project. Obi added: “He even came and collected loan from me for the same project, when he said the Fed­eral Government was delaying his payment, and we gave him, but he later abandoned the project.”

Emeka Eze, speaking at the site, assured that the Federal Govern­ment would henceforth include all necessary measures in its contracts that would protect government in case of such breaches of contract.

“Right now, we just spend mon­ey and we don’t get value for the money we give to contractors. So what the FG wants to do now, and that is the directive of Mr. President, is to find a total solution. Beginning from this year, all contracts will have indemnity clauses to indemnify the Federal Government, should the contractors fail to execute projects according to specification.”

He added: “We have been getting reports from the consultants but the reports we get do not correlate with what we find on site. When we get back, we would have to re-strategise and if you are not working, there is no need to keep contractors on site and the consultants are going to be held more accountable if we must provide total solution to our problems.”

Eze wondered why similar ero­sion projects executed under the former President Shehu Shagari administration, such as the project on the old Orlu Road in Owerri, Imo state have lasted for over 30 years, while those curretly being constructed in the area are failing even before they are handed over to government.

Eze ,while also chiding some government agencies over poor release of funds for projects, advised against the commencement of any project unless sufficient funds had

been allocated.

A total of 15 different ecological projects, including erosion control sites were visited by the team drawn from the Bureau of Public Procure­ment, Office of the Secretary to the Government of the Federation (SGF) Federal ministries of Works, Environment, Water Resources and the Ecological Fund.

The committee observed that the execution of most projects was characterised by poor supervision, administrative bottlenecks, and the deliberate and malicious resolve by contractors to short-change govern­ment by using substandard materials.

“With this type of consultants, engineers and supervisors handling Federal Government projects, it is not very difficult to understand why government projects often fail or are poorly executed.”

One of the sites visited by the com­mittee was the Eze Okoh Erosion site, where it was confronted with the ero­sion devastation at the palace of Laz. Ekwueme the Igwe of Okoh.

The Committee was told of how over 27 houses had been swallowed up by erosion there, while 10 more were visibly threatened and could cave in any moment, unless the is­sue was urgently addressed.

Igwe Laz Ekwueme, who was close to tears, while conducting the team around his palace, appealed to government for immediate action on the site.


by Editor

March 12, 2013 | 11:34 am
  |     |     |   Start Conversation

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