ENL Consortium Ltd, the construction firm handling the first phase of Ibadan circular road whose contract was terminated by Governor Seyi Makinde of Oyo State, has released details of the liability which the government must clear to avoid being dragged before a London arbitration court.
The chairman, ENL Consortium Ltd, Prince Adesuyi Haastrup, in an interview with select reporters in Ibadan, the Oyo State capital recently, put the total liability to the state government at N10.6 billion. This 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.
According to Haastrup, 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 Lagos-Ibadan expressway and terminating at Badeku village on Ibadan-Ife expressway. The road was designed as a bypass for travellers from Lagos that are passing through Ibadan to other parts of the country via Ibadan-Ife Road.
It was awarded by late Governor Abiola Ajimobi in 2007 for a sum of N67 billion on 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 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 Consortium Ltd. But after realizing 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 within six months.
After one year of work on the project, Makinde terminated the contract in March, 2021. He announced that there were better firms that could deliver at agreed length of time. The state government has already placed advert for the job.
But Haastrup declared that his firm would not leave the site until the state government meets the terms of 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 top soil removal of 30 kilometres, earthworks of five kilometres, rock excavation and laid asphalt of two kilometres, among others.
Explaining the reason behind the delay in executing the job according to stipulated time, Haastrup said it took ENL Consortium Ltd 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 land owners also took several months because it paid through the state Ministry of Works.
The chairman also said the project design did not match the reality as the firm discovered huge deposit of rocks amid other challenges which had to be first attended to.
He insisted that the firm would not leave the project site until the liability is paid.