FG weighs options as contract sum hits N532bn

The federal government is weighing options on the construction of the 4.2 kilometre second runway of the Nnamdi Azikiwe International Airport, Abuja, over the rising contract cost, Daily Trust reports.

The contract, awarded to China Civil Engineering and Construction Corporation (CCECC) in 2009 by the administration of the late former President Umaru Yar’Adua, is said to have gulped billions of naira in consultancy fees and compensation payment for land.

Top officials in the Ministry of Aviation and Aerospace, told our correspondent yesterday that one of the options being considered is revocation of the contract.

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The Minister of Aviation and Aerospace Development, Festus Keyamo, had at a recent budget defence session with the National Assembly’s joint committee on aviation, informed the lawmakers about the project variation from N90 billion to N532 billion.

“After N3.4 billion post-contract consultancy fee was paid to the contractor handling the project in May 2023, N90 billion was later approved in the same year for the whole contract out of which N30 billion was released.

“The contractor, after receiving the N30 billion, joined the Federal Capital Territory Administration to pay compensations to some settlers on land and then left the site. All efforts made thereafter to get the contractor back to site proved abortive on the grounds of unacceptable contract variation being demanded.

“The contractor in question is demanding a contract variation of N532 billion from the original sum of N90 billion. To us in the ministry, the said variation is nothing but fraud leaving us with no option than to cancel the contract and call for fresh bids,” the minister had stated.

Stakeholders, who supported the construction of the second runway, had said it would be a relief for operators contending with flight disruptions usually caused by Very Important Persons (VIP)’s movements in the Federal Capital Territory.

The project, initially estimated to gulp N67 billion, was later revised to N92 billion.

From 2017 to 2022, there were N65 billion budgetary allocations for the project, though it could not be ascertained whether the money funds were released.

In the 2017 budget, N10 billion was voted for the project, N8 billion in 2018, N13 billion in 2019, N14 billion in 2021 and N20 billion in 2022.

On August 29, 2023, the ministry stated that the federal government had paid N825, 819, 911.43 as compensation to Jiwa community for the take-off of the delayed second runway project.

A source at the ministry said, “At the moment the federal government is in a serious dilemma over the project.

“Though the government has not made a decision on it, the project appears to be becoming jinxed because you ask me, how do we get over N500bn which is about $340m for a single project?

“Talks are still ongoing, nothing is concluded yet, but the point is where will the government get that kind of money?”

Another official, who also spoke to our correspondent on condition of anonymity, said a new proposal had been submitted by the contractor to the ministry, reducing the project cost to a little over N300 billion.

No decision yet – Minister’s aide

When contacted yesterday, Tunde Moshood, the spokesman to the Minister of Aviation, said no decision had been taken on the contract.

He confirmed that the contractor had submitted a new proposal, but added that the minister would soon meet with all the stakeholders involved in the project.

A spokesperson of CCECC, Mr Zane Peng, when contacted for comment, simply said: “N532 billion is not right.”