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Federal Government Cancels Julius Berger’s Contract for Abuja-Kaduna Road Project

Published by Tope Fakinlede on November 5th, 2024.

Federal Government Cancels Julius Berger’s Contract for Abuja-Kaduna Road Project

The Federal Government has officially terminated the contract with Julius Berger for the rehabilitation of the Abuja-Kaduna-Zaria-Kano Dual Carriageway, specifically the Abuja-Kaduna section (Section I).

A statement issued by Mohammed Ahmed, Director of Press at the Federal Ministry of Works, explained that the cancellation followed Julius Berger’s failure to attend a scheduled meeting to finalize the revised contract amount, which had been adjusted to N740 billion. The company had rejected this figure.

“It is unfortunate that, instead of accepting the revised terms, Julius Berger chose to modify the Bills of Quantities and the Engineering Measurements and Evaluation, as outlined in a letter to the Ministry dated October 29, 2024,” Ahmed stated. “Despite being summoned for a meeting with the Ministry’s management on November 4, 2024, the company failed to attend, prompting the decision to terminate the contract due to expired timelines and non-performance.”

The decision to revoke the contract is also based on the company’s non-compliance with the revised cost and scope, halting work, and failure to remobilize to the site as directed by the Ministry. A 14-day Notice of Termination was issued to Julius Berger on November 4, 2024, regarding Contract No. 6350 for Section I (Abuja-Kaduna) of the road project.

The termination followed prolonged discussions between the Ministry and Julius Berger, which had not led to any significant resolution. The contract, originally awarded in 2018, was intended to cost around N155.7 billion with a 36-month completion timeline. However, costs surged beyond N600 billion, and nearly six years later, less than 50% of the work had been completed.

Ahmed noted that for the past 13 months, the Ministry had engaged with the company in a series of negotiations to reach a mutually agreeable position, but these efforts proved unsuccessful.

The rehabilitation of the Abuja-Kaduna-Zaria-Kano road was initially divided into three sections. Julius Berger was awarded Section I (Abuja-Kaduna) on December 20, 2017, with the contract signed in June 2018 for an initial sum of N155.7 billion. The other two sections (Kaduna-Zaria and Zaria-Kano) were partially completed and handed over during the final days of former President Muhammadu Buhari’s administration.

In response to the project’s delays and cost escalations, the Ministry ordered a redesign and re-scoping of Section I. This led to the division of the section into two phases, with the first 38 kilometers being re-engineered with reinforced concrete pavement (CRCP) and the remaining 127 kilometers using asphalt. In October 2024, the Ministry awarded the first phase to Dangote Industries, while Julius Berger retained responsibility for the rest of Section I.

The road project, seen as a critical infrastructure initiative for linking Abuja to the northern states, had become a priority under President Bola Ahmed Tinubu’s “Renewed Hope Agenda.” As part of the revised plan, the Federal Executive Council (FEC) approved a cost reduction for Section I from N797.2 billion to N740.7 billion on September 23, 2024. Julius Berger was given until October 30, 2024, to accept the final offer, but it failed to respond.

The termination now paves the way for a reevaluation of the project to ensure its completion, with the government seeking to alleviate the challenges faced by Nigerians traveling along the crucial highway.