Controversy erupts over alleged N54bn contract inflation as house Reps committee summons ministry director
Drama Unfolds in House of Representatives Ad Hoc Committee Investigation of Ijebu-Igbo-Ibadan Road Project
The House of Representatives Ad Hoc Committee, chaired by Hon. Kwamoti Bitrus Laori, investigating the sluggish progress and controversies surrounding the alleged re-award of the Ijebu-Igbo-Ibadan road project, witnessed a dramatic turn of events during its recent hearings.
The committee had undertaken a visit to the project site in Ibadan, Oyo State, and parts of Ogun State last Thursday before summoning the Federal Ministry of Works and the contractor for a meeting on Tuesday.
During the investigation, lawmakers questioned representatives of the Ministry of Works about the re-award of the ongoing Ijebu-Igbo-Ibadan road project (approximately 45km) to a new company while the original contractor was still on site.
Engr. Adedamola Kuti, Director of Highway (South West) at the Federal Ministry of Works, had previously informed the probe panel on September 7, 2023, that the contract with DC Engineering Ltd had been terminated since September 2022 and re-awarded to two other companies. He promised to provide a copy of the termination letter within 72 hours.
However, weeks later, Kuti and other ministry officials failed to produce the termination letter or any documentation regarding the approval by the Federal Executive Council (FEC) and Bureau of Public Procurement (BPP) authorizing the re-award of the project at a cost of N54 billion. They also couldn’t provide details about the bidding process.
Engr. Ade Adedeji, Executive Director of DC Engineering Ltd, stated that his company had not received any termination letter from the ministry, emphasizing that their equipment and workers remained on the project site. He noted that the ministry had certified their work and made payments just the previous month, in August 2023.
Adedeji expressed concern over how the ministry disregarded their request to review the project’s cost due to rising material prices, increasing it from N9.8 billion to at least N14 billion, only to re-award it to another contractor for N54 billion.
When lawmakers questioned Ministry of Works representatives, led by Engr. Agboola Olajide, Deputy Director of Highway, they were met with confusion. Olajide later claimed that while the termination letter had not been issued, the project had been re-awarded to another contractor, Areatech Construction Ltd, since September 2022. He stated that it was the legal department’s responsibility to issue the termination letter, but lawmakers expressed skepticism, expecting all ministry departments to coordinate their actions.
Lawmakers also inquired about why the ministry certified DC Engineering’s work in May 2023 and paid them in August 2023 instead of pursuing reimbursement for funds given to the contractor. Olajide echoed Kuti’s previous statement that it was an automated payment by computer. However, it was discovered that payments authorized by the Ministry of Works go through various offices, including those led by directors and deputy directors, such as planning, audit, checking, CPO, and finance.
The Ijebu-Igbo-Ibadan road project, initially awarded to DC Engineering Ltd in 2018 with a 24-month completion timeline, faced delays. Documents presented to the committee showed that only about 15 percent (N1.3 billion) of the contract sum (N9.8 billion) had been paid to the company from 2018 to 2023, contributing to the slow pace of the project.
During the recent inspection, lawmakers observed that Duhu & Sons Construction, awarded a portion of the road in 2011, had completed only 7km of their 14km section and was no longer on site. In 2019, the ministry reduced DC Engineering’s job by 7km, reduced the contract sum to N8.8 billion, and re-awarded the 7km portion to Duhu & Sons. The current status of Duhu & Sons’ contract termination remained unclear.
Furthermore, letters from the Bureau of Public Procurement revealed discrepancies in the project’s approval process. While the ministry presented N67 billion for approval, BPP only approved N54 billion, contradicting claims of two companies handling the project.
The committee also learned that there was no consultant in charge of the project, as the consultant’s contract had expired, according to Olajide.
The House of Representatives Ad Hoc Committee cautioned DC Engineering Ltd that if the funds paid did not match the work done, the company would be required to reimburse the government treasury.
The committee summoned officials from the Federal Ministry of Works, including the Director of Engineering Highways (South West) and Directors of Finance and Legal Departments, to appear on Thursday. Laori’s committee warned that if these officials failed to provide satisfactory explanations regarding the project’s controversies, they would not hesitate to summon the Minister of Works.
