Emma Thompson
Thu, Sep 7, 2023 11:10 PM

Repeated Variation of Project Costs in FCT: A Cause for Concern

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Repeated Variation of Project Costs in FCT: A Cause for Concern
The Minister of the Federal Capital Territory (FCT), Nyesom Wike, expressed his disappointment with the repeated variations in project costs within the FCT. This issue has caused concern as the contract cost for the rehabilitation of works on lower Usuma Dam has increased from N20 billion to N50 billion, even though the project was reported to be 90% complete. Wike vows not to accept any further variations and intends to overhaul the engineering services. In addition, the minister discovered that the Usuma Dam Water Works project had not been fully awarded and plans to re-award the contract. Several contracts for completion and payments to contractors have also been approved.

The repeated variation of project costs within the Federal Capital Territory (FCT) has become an embarrassing situation, according to the FCT Minister, Nyesom Wike. During a visit to the rehabilitation of works on lower Usuma Dam, Wike expressed his disappointment with the increasing contract cost of the project. The contract was initially awarded for N20 billion in 2017 but has since been revised to N50 billion in 2020. Despite already paying about N50 billion, there is still an outstanding balance of N900 million.

Wike finds it unacceptable that the contractor claims the additional variation amount is insufficient to complete a project reported to be 90% complete. He emphasizes that further variations will not be accepted and plans to overhaul the engineering services involved. The Minister's displeasure extends to the Federal Capital Development Authority (FCDA), as he highlights the alarming number of variations in contract amounts, ranging from N10 billion up to an astounding N200 billion.

Furthermore, Wike discovered issues with the delivery of the Usuma Dam Water Works project during his visit. Originally believed to have been awarded as an emergency contract, Wike learned that only a letter of intent had been provided to the contractor in August 2022. Understanding the significance of the project in supplying water to the city and its environs, the Minister has decided to revoke the emergency status and re-award the contract. He will oversee the procurement process and invite new bids for the project.

The FCT Minister is also taking action to address the problem of abandoned projects. Over ten contracts have been selected for completion, and agreements have been finalized with the contractors. Wike has directed the FCDA Executive Secretary to ensure that all approved files are submitted to the Director of Treasury. Payments to contractors have been expedited, with the aim of making all outstanding payments by Friday.

Wike further explains that each contractor will receive monthly payments based on the agreed project completion period, and the payments will be linked to Internally Generated Revenue. Some projects have a completion period of six months, while others have a 15-month timeframe. Notably, the contractors for the millennium tower have committed to completing the project within two years and are receiving monthly payments of N3 billion.

The Minister of the FCT's determination to address the repeated variation of project costs and tackle abandoned projects highlights his commitment to ensuring accountability and transparency within government contracts. By demanding stricter adherence to agreed contract amounts and delivery timelines, Wike aims to eliminate wastage of funds and promote effective project completion.

Source of content: OOO News 2023-09-07 News

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