Federal Government revokes Julius Berger’s contract

The Federal Government has revoked a portion of the contract for the Abuja-Kaduna highway, which was managed by the construction giant Julius Berger.

The contract, initially awarded to the company in 2018 during former President Muhammadu Buhari’s administration, has faced significant delays in progress.

While the section from Kaduna to Zaria has been completed, and the Zaria to Kano section is close to completion, the Abuja-Kaduna segment has only achieved 27 percent progress over the past six years.

During the inauguration of the highway’s rehabilitation on Thursday, October 17, Minister of Works, Senator David Umahi, criticized Julius Berger, accusing the company of “playing politics” with the project. Daily Trust reported he said the company had been slow to complete the work and repeatedly requested increased funds.

“Berger said to do this entire job, it needs N1.5 trillion,” Umahi said. “We started negotiation in September last year writing letters every week. Eventually, we told them that despite the ones they are requesting, it would still take them four years to complete as there have been traffic jams and kidnappings on the road.”

The publication said the minister revealed that the Federal Executive Council (FEC) had reviewed the project cost to N740 billion, but Julius Berger continued to delay, later demanding even more funds. “We presented the option of balkanising the road into three, which the President approved. When we did that, Berger accepted it and the rate. But we did not know they were playing games by continuing to play delay tactics.”

Umahi expressed frustration with the company’s approach, saying, “Later, they came back that they wanted an increase to N740bn, we went to FEC and they gave approval, only for them last week to say they need another increase to N903bn.”

The minister dismissed the latest request, stating that agreeing to it would establish a precedent, potentially leading to other contractors demanding similar increases, which could escalate the project’s cost to N4 billion per kilometer. “Our stance is clear: we will not extend the scope of this project for Julius Berger beyond N740 billion. The negotiation is over. If they refuse, we will allocate it to those who can deliver the same quality at a more affordable rate, akin to the coaster road,” he declared.

Umahi added that the 375km dualised road (750km in total) would see an additional 7.5 kilometres in Kogi and Kano States.

In a previous statement, the Director of Highway Construction at the Ministry of Works, Engineer Bakare, clarified that the project had undergone a “de-scoping” process, with the remaining sections awarded to Dangote and BUA. Dangote will manage a 38-kilometer dual carriageway segment within the first section of the highway, at a cost of N145 billion, with a projected completion date of 14 months.

The project, which was initially funded by the Presidential Infrastructure Development Fund (PIDF), will now be financed through the Tax Credit Scheme.