by Stanley Azuakola

If the exact letters of the contract is to be followed, then Bi-Courtney, the Nigerian consortium charged with fixing the Lagos-Ibadan expressway would have been asked to cough out fines in excess of at least N30 billion for its failure to deliver on the terms of the concession of the road.

When the deal with the FG was signed three years ago, it included lots of perks for Bi-Courtney. It also included strict penalties to be enforced if they failed. The penalties were put there in order to avert what has become tradition in road construction in Nigeria, where contracts are awarded but work is left undone and no one is brought to book.

Under the terms of the FG/Bi-Courtney agreement, for each day the road is left unconstructed after the due date, the fine against Bi-Courtney amounts to N100,000 per kilometre. The company is expected to pay same sum for a square meter of an undone bridge along the express route.

Consequently, for the nearly 135 kilometers of road plus at least six bridges left undone for over 1,000days in which the contract has been stalled, the fines Bi-Courtney is expected to pay runs into over N30 billion.

But this is Nigeria, and despite the untold hardship the failure to construct that road is causing, both the government and Bi-Courtney have been silent on invoking the terms of the contract. As a matter of fact, Bi-Courtney claims that it isn’t liable for the hitches.

“People think it’s all Bicourtney’s fault, but it is not. There are many factors and interests disrupting the flow of work,” Bi-Courtney spokesperson, Dipo Kehinde, told the Premium Times, which got a copy of the 103-page document signed in May 2009.

The FG on its part has ruled out exploring punitive measures.

“No one is looking at that I can tell you in confidence. The concern is how to get the job on track. Like I said, the entire agreement is being reviewed,” said a government source.

The contract stipulates that for the fines to kick, it must be clear that Bi-Courtney bears responsibility for the delay. In a situation where the government is liable for the delay in contract execution, two things would happen. First, the time frame for job completion would be extended, and secondly, the government would defray any cost that results due to inflation.

According to Premium Times:

Awarded May 8, 2009, the Build, Operate and Transfer contract authorizing Bicourtney to construct the federal road and run it for 25 years, was awarded for N86.5 billion.

A public private partnership novel to the Nigerian infrastructural system, the contract was to allow the company four years to construct the busy expressway and, recoup its investments through a broad range of rights stretching from charging food vendors on the road, to vehicular tolling.

The rewards, amongst some of the most liberal and lucrative, authorize Bicourtney to earn from toll tariffs, all forms of advertising, rental fees on encroaching properties, licensing and charging of providers of all services including hotels, restaurants, termini, fuel stations, trailer and motor parks, fuel depot, telephone and internet services, vehicle repair.

Also, under the arrangement, the company will be entitled to licensing and charging, all for 25 years, the installation of pipes, cables, railway lines, drains underneath and oil, gas, water pipelines, storage facilities.

Each year however, the consortium will remit to government, N100 million annually (or its equivalent reflecting inflation) in addition to five percent of its gross profit, the agreement states.

The document was signed May 26, 2009 with a stipulated start of construction date set at within 90 days later – August 26.

Three years on, the job has yet to fully take off.

Such violation, save for any government-induced delay- which itself is punishable- or a force majeure involving natural disasters like earthquake, would have drawn severe penalties in billions of fines, if the concession agreement is adhered to.

“In the event that due to the fault of the concessionaire,” Article 9.3 of the document states, the concessionaire abandons or is deemed to have abandoned the construction works as provided under Article 9.4, the concessionaire shall pay to grantor by way of liquidated damages.”

The ensuing article 9.4 defines abandonment as failing to commence work within 30 days from the 90 days-commencement date, or failing to complete the job within 30 days after the target completion date-four years(except where extended.)

Both cases are excused only in the event of a natural disaster or the default of the federal government. Even so, failure to resume 21 days after the end of the disaster amounts to the same liability.

Such failure would attract “liquidated damages” of N100 thousand per kilometer of road or meter square of the bridges unconstructed each day.

And where the government is culpable for the delay, adequate extensions of schedule and payment for increase in construction cost are to be effected.

Some weeks ago, works minister told pressmen that: “The government is already engaging the concessionaire in a bid to find the way forward. What is important is that government is committed more than ever before to delivering that road and doing it quickly considering the economic potential of the road.”

President Jonathan is also said to be personally engaging officials with a view to salvaging the contract through an amendment of terms.

The main issue now is this: The FG isn’t showing any sign of wanting to invoke the stipulated sanctions on Bicourtney for the delay on such a key project, so one might think that the FG is to blame. Yet, neither is Bicourtney pressing for reparations.

What we have instead is both sides playing a blame game.

While the government faults Bicourtney’s three-year tardiness, the company cite the late approval of its design in 2011 by the federal government, political interference, unresolved right of way, confiscation of its tools by the Ogun state government and an “unbankable” agreement as factors responsible for the delay.

For one, even where the right of way had been resolved, and the design long approved, Bicourtney has made it clear it lacks the funding to fix the road after local banks rebuffed its investment proposals.

The company says it now counts on a South African financier, Rand Merchant Bank, Yolas for funding, and discussions are ongoing.

On another hand, were the company to have resolved its financial troubles earlier, the right of way, involving demolitions and compensations yet unresolved by the federal government, would seem to still have pandered into the hands of a company facing several obstacles in the execution of the job.

Bicourtney has a year to deliver on the project, a mission many believe is impossible, given that construction is yet to begin.

But the company spokesperson, Mr. Kehinde, remains optimistic that the road could be ready for commissioning by August 2013.

“If everyone played their roles, the construction does not take time,” he said.

Whither Nigeria?