MDA

Federal Ministry of Works and Housing

Project Location/State

Award Year

2019

Contract Sum

₦₦1,428,007,350.00

Amount Paid

₦₦663,594,576.86

Unaccounted

₦₦129,540,666.75

Context/Observation

i.The contract for the construction of 15KM Interstate Road from Aiyegunle, Akoko Edo LGA in Edo State to Imeri Ose LGA in Ondo was awarded to a contractor on the 17 of August, 2011 at the cost of N1,428,007,350.00
ii.The contractor was given an Engineer’s Order, in accordance with clause 41 of the standard conditions of contract to commence work on 26 September, 2011 and complete same on or before 25 September, 2012.
iii.Advance payment of the sum of N204,001,050.00 was paid to the contractor out of which the sum of N74,460,383.25 was recovered from Interim Payment Certificates (IPC) generated, leaving an outstanding sum Of N129,540,666.75
iv.A total of N663,594,576.86 was certified and paid to the contractor for work done. This amount was considered reasonable to have fully paid back the advance payment.
v.Physical inspection of the project site in February 2020 revealed that the contractor demobilized from the project site since May 2014 for a job due for completion on 25 September, 2012 due to the Ministry’s refusal to upwardly review the contract sum.
vi. In 2017, the Contractor requested for a review of contract sum on the basis that the original contract sum had become unrealistic, but the Ministry could not obtain a Certificate of No Objection, hence the Contractor demobilised and abandoned the project.
vii.At the time the request for review of contract sum was made, the completion date of 25 September, 2012 had long elapsed.
viii.The Ministry failed to fully execute the terms of the contract agreement for over six years by not terminating the contract.

Contractor

N/A

Beneficial Ownership Information

N/A

Legislative Recommendation

The Permanent Secretary is requested to:
i.Furnish reasons why advance payment made to contractor was not backed by required unconditional advance payment bank guarantee in accordance with extant regulations.
ii.Recover and remit the sum of N129,540,666.75 to the Treasury.
iii.Forward evidence of remittance to the Public Accounts Committees of the National Assembly.
iv. Otherwise, sanctions relating to payment for job not executed in paragraph 3104(i) of the Financial Regulations should apply.

Executive Action

N/A

Progress Report

N/A

Data Source

2019 Non-Compliance Audit Report of the FG

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