The Senate has called in the contractors handling the East-West Road and the Ministry of Niger-Delta for explanations regarding the road construction after it discovered a variation in the contract to the tune of N107bn.
The Senate Committee on Public Accounts had begun a public hearing yesterday to examine the Subsidy Re-investment and Empowerment Programme (SURE-P) on the various projects of the Federal Government in the country. It was during the hearing that it said there was a need for more explanations from both the ministry and the contractors, as it failed to be convinced about the expenditures.
It observed that Sections 1 and 2 of the contract which was awarded to Setraco in 2006 at the cost of N138.7bn had been jerked up to N245.7bn.
In the company’s defence, its Technical Director, Dr R. Chaudhuri explained that the amount was to cover the construction of both sections of the road of about 87km.
He said Section 1 of the road, which was initially awarded for N64bn, had to be reviewed due to redesigns and insufficient materials from the bill of quantities. Out of this N65.5bn approved, the company had been paid N62bn leaving a balance of N3.5bn.
As for Section 2, the original contract award of N74.7bn had to be increased to N133.7bn, out of which only N39.58bn had been paid. He disclosed that work in both sections had reached 65 per cent.
The third section of the road, a distance of 99km, which is being handled by Reynolds Construction Company, RCC, was reviewed to N56bn from the initial sum of N44bn.
Members of the committee after examining the details of the submissions noted that with the 87km stretch of the road costing N112bn, this amounted to a construction cost of N1.3bn per km.
The Committee Chairman, Senator Ahmed Lawan, queried why the contract sum should be increased to as much as twice its original sum.
He said: “We would like to know why the contract is reviewed by about 100 percent after the contract was awarded. Did the contractor not do his work well before bidding for the job?
“This is difficult to understand and we will need further explanations on this. The Ministry of Niger Delta should come up with details of the designs to show what design was done to warrant such an upward review.”
Responding, Mr Chaudhuri said he would have to get the design papers for the committee to show the need for the contract sum to be increased.
An accounting officer with SURE-P, Mr. Okogwu, explained that so far, about N8.14 billion had been released as intervention funding for the East-West Road, saying the payments for the contracts under the SURE-P projects were fast-tracked.