Umahi to peg contract variation at 5%

Sharon EboesomiDecember 12, 20234 min

Senator David Umahi promises to include a provision for a 15-year shelf-life insurance guarantee for projects and a maximum of 5% Variation of Price (VoP) Clause in the contracts.

Works minister, David Umahi

The minister of works, Senator David Umahi, has announced plans to include a provision for a 15-year shelf-life insurance guarantee for projects and a maximum of 5% Variation of Price (VoP) clause in contracts awarded by his ministry.

Umahi said this during the 2024 budget defence of the ministry before the national assembly joint committee on works held on Monday, 11th December, 2023.

Regarding the planned use of concrete and asphalt pavement, the minister stressed that the new policy aims to prevent excessive cost increases in contracts.

Earlier, chairman of the senate committee on works, Senator Barinada Mpigi (PDP, Rivers South-East), urged the minister to ensure that the ministry’s budget aligns with the needs and demands of Nigerians.

A total sum of N657,228,251,596 is proposed for the ministry in 2024. Of this figure N566,466,977,361 is proposed for capital budget for projects under the direct purview of the ministry while N51,282,456,911 is proposed for the Federal Road Maintenance Agency (FERMA) and N104,039,920  for the African Regional Institute for Geo-Spacial Information Science and Technology AFRIGIST (RECTAS).                    

For overhead, a sum of N668,116,856 is proposed for the ministry and N22,027,209,696 goes to FERMA; just as personnel cost for the ministry gets N12,598,351,319 and N4,081,099,533 is for parastatals.       

Also, new projects captured under the 2024 Budget are at a total cost of N102,956,624,538.

In his presentation, Umahi also disclosed that, “693 new projects have been proposed in the 2024 budget which are critical to improving road network connectivity and thus enhancing traffic circulation on the federal road network, necessary for boosting socio-economic activities in the country. 

Speaking further, he said, “The primary objective is enabling the ministry achieve its mandate in providing a quality federal road network that serves as an environment to aid socio-economic growth of the country.

The main challenge to highways development in the country remains inadequate funding. As at date, government is committed to highway contractors to the tune of about N13.835 trillion with a total of about N1,507,873,365,516.02 unpaid certificates for executed works. Secondly, the dearth of younger engineers/technical officers in the ministry as a result of embargo on employment is affecting effective project supervision at the sites. It is expected that more sources of funding of highway projects be explored as well as lifting the embargo on employment of needed engineers/technical officers at middle level to enhance supervision of projects. Our ministry has set up six committees to review all debts, approved and unapproved variations on prices of basic rates, and all augmentations that occurred before May 29th 2023 and from May 30th 2023 till date,” he added.

READ ALSO: 2024: Senate raises allocation to labour ministry

Lawmakers present at the hearing were Senators Ireti Kingibe (LP, FCT), Ned Nwoko (PDP, Delta North), Patrick Ndubueze (APC, Imo North), Mohammed Adamu Aliero (PDP, Kebbi Central), Gbenga Daniel (APC, Ogun East), Adams Oshiomhole (APC, Edo North), Olalere Oyewumi (PDP, Osun West), Francis Fadahunsi (APC, Osun East), Babaginda Hussaini (APC, Jigawa North-West) Natasha Akpoti-Uduaghan (PDP, Kogi Central), and Yemi Adaramodu (APC, Ekiti South).

Others include the chairman, House committee on works Rep. Akin Alabi (APC, Oyo), Rep Idu Emeka (LP, Anambra State), and Amobi Ogah (LP, Abia State) amongst others. 

Sharon Eboesomi

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