Default of N8.94bn forces J/Berger, RCC to stop work on Lagos-Ibadan highway
Default in agreed payment schedule of about N8.9bn has caused the suspension of construction activities along the strategic Lagos-Ibadan Expressway by key contractors including Julius Berger Nigeria (JB) Plc and Reynolds Construction Company (RCC) Nigeria Limited.
Before the halt, both companies had in two separate letters of notice of suspension of work to the Minister of Power, Works and Housing, Mr. Babatunde Fashola made their intention clear of downing tools before the end of July should the payment schedule be defaulted.
While RCC is working on the Section II from the Sagamu interchange to Ibadan, with Contract No. 6205, JB is on the expressway.
RCC memo signed by the Managing Director, Mr. M. Nakhla, dated June 2, 2017, stated, “In view of the irregular payment and the attendant cash flow problem, we shall be constrained to suspend further execution of work unless there is an appreciable improvement in the project’s cash flow and adequate funding arrangement is put in place for further works.”
Also, the Julius Berger letter said, “It has become evident that the required adequate funding for the continuation of the project is not available. We trust that you will understand that, therefore, and as a consequence of the unacceptable financial risk to Julius Berger Nigeria Plc, we are left with no choice than to immediately commence suspension of the works on the project, as earlier notified.”
