Tuesday 20 November 2012

FG terminates Bi-Courtney’s Lagos-Ibadan road contract

The Federal Government today Monday November 19th terminated its concession agreement with Wale Babalakin's Bi-Courtney Nigeria Limited on the Lagos-Ibadan highway.

The government said they terminated the contract 'as a result of serial breaching of the terms' of the deal by Bi-Courtney. The Federal Executive Council (FEC) in May 2009 awarded the concessionaire contract for the expressway for 25 years to Bi-Courtney, which was expected to upgrade the highway with over N80 billion and recoup the investment by tolling the road, but they couldn't deliver.

The contract has been awarded to both Julius Berger Nigeria Plc and R.C.C Nigeria Limited, and they have been directed to commence work immediately on the road.

A press statement from Minister of Works, Mike Onolememen after the cut...


"The Federal Government today, terminated the concession of the Lagos-Ibadan expressway granted to Bi-Courtney Consortium on 8th May, 2009. The termination of the concession agreement by Bi-Courtney consortium and especially the failure of the company to reach financial close as provided for in the agreement.

Due to the senseless carnages on this important expressway which is part of Arterial Route A1, the Federal Government has also decided to embark on the emergency reconstruction of the expressway.

Consequently, the Federal ministry of Works has engaged the services of Julius Berger Plc and R.C.C Nigeria Limited to commence work immediately on the reconstruction of the expressway.

While Julius Berger would handle handle section 1: from Lagos to Shagamu interchange, RCC Nigeria Limited will be responsible for section II: from Shagamu to Ibadan.

The Federal Government wishes to assure that while it will continue to uphold the sanctity of contracts entered into by the Federal Government, it will not shy away from implementing provisions of the contract agreement dealing with non-performance on the part of the contracting party.

The legal implications of this termination have been carefully considered by both the Federal Ministry of Works and indeed the Federal Government. If you recall, we have been on this issue for quiet sometime now and we have meticulously followed the concession agreement, the provision of relevant clauses of the agreement.

We have complied fully with the provisions of this agreement. We have had cause even in the past to write the concessionaire to detail the breaches which it had committed in this agreement in this particular transaction and we have also followed the minimum and maximum number of days the contractor was expected to remedy the situation but failing which the Federal Government had no alternative but to take this course of action.

For your information, under this concession, the construction period is supposed to last for four years and the four years will come to a close in about six months time and right now there is nothing on ground to suggest that the company is capable.

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