Asaba Airport: Govt, Lawmakers Angry with Contractors

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The last is yet to be heard on the Asaba International Airport, as Delta State Government and Lawmakers are angry with the pace of execution of the job by ULO, the contractors.

The project contractors were awarded the contract for the rehabilitation of the runway and taxiways of the airport after it was downgraded by the Federal Government on May 6, 2015 over “safety concerns.”

Governor Okowa was said to have awarded the new contract on runway and taxiway to the contractor after a thorough evaluation of the project and its economic value to the state.

However, rather than show urgency in the execution of the project, the contractor recently pulled out of site.

In a letter of disengagement, ULO purportedly claimed that it was withdrawing due to “unfavourable working condition imposed on them indirectly by officials of the State Government Ministry of Works”, alleging that it could not continue with the work because “the estimates prepared by the Ministry of Works in 2014” were no longer realistic given the prevailing economic situation in the country.

But a day before news of ULO’s disengagement filtered out, the Committee on Works of the Delta State House of Assembly had paid an inspection visit to the airport, fuelling speculations that this may have prompted ULO’s sudden withdrawal.

During the visit, the Chairman of the Committee, Hon. Chief Evance Ochuko Ivwurie, berated the contractor for its failure to deliver the project on schedule.

The lawmakers were livid at the slow pace of work by Ulo Consultants led by its Managing Director, Uche Okpunor which has dragged a three-month contract timeline to over two years.

Honourable Ivwurie said: “I am extremely disappointed that this contractor is obstinately recalcitrant and the conduct has put Deltans and the State Government in difficulty. His non-performance has caused the State Government untold embarrassment, setbacks and public opprobrium.”

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Hon Ivwurie was further incensed by the fact that the Chairman and Managing Director of the Company, Chief Okpunor, was not physically present during the inspection as requested by the Committee but instead sent two of his staff who were “clueless and of no assistance to the Committee.”

Barely 24 hours after the Committee’s visit, ULO announced its withdrawal from the airport project with effect from November 20, 2017.

But it was said by those in the know that Okpunor’s absence and later withdrawal from site were mere face-saving measures by the contractor to paper over the poor job and attitude exhibited by the company from the inception of the airport project dating back to the immediate past administration in the state.

The project, which was to have been completed within three months from when it was awarded, had inexplicably dragged on for two years and the State Government was about to wield the big stick following the non-performance of the contractor.

The contract for the rehabilitation of Runway and Taxiway was awarded by the Delta State Tenders Board ((STB.10/T/791), on May 21, 2015 at a total contract sum of N5Bn with 50% of contract sum as advance payment and a completion period of three months.

In its acceptance letter dated May 21, 2015, ULO affirmed that “completion period is within three (3) months from commencement of the project.”

The contractor subsequently submitted a Performance Bond from Zenith Bank to the State Government in August 2015 and on the basis of this, 50% of the contract sum amounting to N2.5 billion was released as advance payment. But two years after, ULO had achieved only 24.5% completion.

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Problem began for ULO when the State Government, in a letter to Zenith Bank on August 28, 2017, two days before the expiration of the Advance Payment Guarantee, demanded for the immediate payment of the outstanding sum of N1, 959,264,958.57, “being un-recouped balance of the moneys advanced as per your APG.”

But Zenith Bank in a letter dated September 08, 2017, pleaded with the State Government to extend the tenure of the Performance Bond till December 31, 2017.

According to the bank, “we have intimated the customer of this development and they have requested that we extend the tenor of the Performance Bond to enable them return to site as soon as the rain abates.”

However, the State Government refused to bulge insisting that the request for extension of the APG “amounts to a fundamental breach of the clear and unambiguous provisions of Clause C, Paragraph iv of the Advance Payment Guarantee issued by your bank.

“There is no provision in the Advanced Payment Guarantee which entitles the Guarantor (Zenith Bank Plc), upon receipt of the first demand for payment by the Delta State Government, to ‘extend the tenor of the APG,” the government said.

Consequently, the State Government wrote that it “shall be constrained to deploy appropriate legal means to enforce the payment of the outstanding sum advanced.”

Ulo’s action is seen by some government officials as good omen for a project that has dragged unnecessarily. They accused the contractor of being a habitual breaker of its own promise.

They alleged that most of the major jobs being handled by the same contractor in the state suffer the same fate: poor and delayed completion of projects.

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A reliable source told our correspondent that : “In two years, it was only able to achieve 25% completion on the airport project. Look at Maryman Babangida Way in Asaba and Sector C of the Ughelli-Asaba road dualisation, ULO has not been able to deliver.

“There are three sectors of the Ughelli-Asaba road dualisation. It is only in Sector C which it is handling that work is not going on. We pray the company withdraws from these other projects too so that we can all move on.

“The contract rates for asphalt, which is the major material required in this contract, are still good and competitive. An equivalent of 50mm thick asphalt wearing course is awarded today at N6,000 per square metre. That is the same rate in the contract.

“Furthermore, it should be noted that the huge advance payment (50% of the contract sum) made to the contractor was to facilitate adequate stocking of materials to forestall request for review of the contract due to price fluctuations.”

Meanwhile, the State House of Assembly on Tuesday this week began investigations into the Asaba airport contract saga.

Whatever happens, it is clear that the airport will continue to operate skeletal services for some time to come until the State Government is able to shop for and engage another contractor, which is expected to be a long process.

However, the State Commissioner for Information, Hon Patrick Ukah in a statement on Tuesday gave assurance that the government was doing “everything possible to ensure that the right thing is done and the project completed to international standards.”

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