Firm demands N10b from Oyo for contract termination
By Bisi Oladele, Southwest Bureau Chief
The construction firm handling the first phase of Ibadan circular road, ENL Consortium Ltd, yesterday demanded N10million compensation from the Oyo State government.
Governor Seyi Makinde terminated the contract for an alleged delay in delivering the road.
The firm released details of the liability the government must clear to avoid being dragged before a London arbitration court.
Chairman of the firm, Prince Adesuyi Haastrup, in an interview with reporters in Ibadan, the state capital, put the total liability to the state government at N10.6 billion.
The figure includes N3.9 billion already expended on the project and N6.7 billion penalty being 10 per cent of the total contract sum in case of such termination.
Haastrup said the terms are clearly stated in the contract signed by both parties in 2017, insisting that his firm would remain on site until the sum is paid.
The contract was for a 32-kilometre road starting near the First Technical University on the Lagos-Ibadan expressway and terminating at Badeku village on the Ibadan-Ife expressway.
The road was designed as a bypass for travellers from Lagos passing through Ibadan to other parts of the country through Ibadan-Ife Road.
It was awarded by the late governor Abiola Ajimobi in 2007 for a sum of N67 billion on a Build Operate and Transfer (BOT) basis for 25 years.
The state government did not incur any cost on the project. But due to the slow pace of work on the road, Makinde, who succeeded Ajimobi in 2019, terminated the contract.
He had visited the project site in late 2019 during which he directed the contractor to stop work.
He said that the government had invested billions of naira on the road project but without a commensurate work achieved by ENL Ltd.
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But after he realised that the government did not commit any fund to the project, he allowed the firm to continue with its work but with the condition that it must deliver in six months.
After one year of work on the project, Governor Makinde terminated the contract in March. He announced that there were better firms that could deliver at the agreed length of time. The government has already advertised the job.
But Haastrup said his form would not leave the site until the government meets the terms of the agreement which includes offsetting the N3.9 billion spent on the project and the N6.7 billion penalty for terminating the contract.
The firm has undertaken bush clearing and topsoil removal of 30 kilometres, earthworks of five kilometres, rock excavation and laid asphalt of two kilometres, among others.
Explaining the delay, Haastrup said it took ENL four months to get the original copy of the project design from Italy because the state government did not pay the foreign firm when it developed it 14 years ago.
He added that the process of paying compensation to landowners also took several months because it paid through the state Ministry of Works.
Besides, Haastrup said the project design did not match the reality as the firm discovered a huge deposit of rocks amid other challenges which had to be first attended to.
Haastrup insisted that the firm would not leave the project site until the liability is paid.