As part of response to the surging foreign exchange rates impacting project costs, the Oyo State Government has announced a review of its contracts sum of 12 ongoing projects across the state.
The decision according to the Commissioners for Works as well as Budget and Economic Planning, Professors Dawud Sangodoyin and Musibaudeen Babatunde, during a joint press briefing was reached at the last State Executive Council meeting.
The State Executive Council meeting held on Wednesday, October 16 at the Governor’s Executive Chamber, Secretariat, Agodi,Ibadan.
While the original cost of the entire 12 affected projects by the price review stood at a little above 200 billion naira, Professor Sangodoyin said the contractors handling the projects made a proposal of 159.6 billion naira to the state government as an addition to the original contract sum based on foreign exchange rate but the sum was negotiated downward to 86.1 billion naira thereby, saving the state a cost in excess of 70 billion naira.
The Commissioners, who stated that a committee set up by the state government also carried out an independent investigation on the claims of the contractors on the price review, disclosed further that the decision of the state executive council aims to mitigate the financial strain on both the state and contractors involved in the various infrastructure projects.
Westernmirror.com.ng reports that the price review of the contract sum involves asphaltic improvement of 12 selected road construction and rehabilitation projects within Ibadan metropolis lot 1, 2, and lot 3.
According to Professor Sangodoyin, “projects affected by the price review include construction of Rashidi Ladoja Circular Road Lot 1, construction of Rashid Ladoja Circular Road Lot 2, rehabilitation of Saki-Ogboro-Igboho road, construction of Iseyin-Apomu, construction of Apomu junction to Ogbomoso, construction of Ajia-New Ife road with a spur to Amuloko, Asphaltic reconstruction, expansion, and total overlay of Iwo Road Interchange to Osun-Oyo boundary, reconstruction, rehabilitation, and expansion of road network inside Aerodrome, Samonda, Ibadan, as well as junction improvement road improvement of Agodi Gate road.”
The Works Commissioner highlighted the necessity of the decision by the state government, stating that the rising foreign exchange rates have significantly increased the cost of materials and services while adding that the price adjustment became imperative for timely completion of projects without compromising quality.
“The executive Council has considered the cost submitted by the committee and approves as follows; that the reviewed counter sum of the 12 ongoing projects which I’ve earlier mentioned stood at a total sum of ₦86.1 billion.
“Let me throw more light to this, that the contractor submitted a VoP (Variation of Prices) of ₦159.6 billion but the committee and experts consulted reviewed it and negotiated it to ₦86.1 billion which saved the government up to ₦73.4 billion.
“The payment of this is subject to the milestone achievements which is going to be consistent with the original contract. We believe that once this is done, all our projects will be distributed as we have agreed with the contractors and of course, we shall not have any abandoned projects.” Professor Sangodoyin stated.