Lanlate Project Not Abandoned, College Not Living Up To Judgment Agreement – Contractor
The contractor handling the construction of School of Education project at the Oyo State College of Education, FIAT International Limited, has denied abandoning the project, saying it is rather the College that has failed to live up to the judgment agreement on the project.
The company, reacting to a statement credited to the Speaker of Oyo State House of Assembly, Honourable Adebo Ogundoyin, summoning it to appear before the Assembly, said it was ready to appear before the legislators to explain why progress on the project had been delayed.
FIAT International Limited, in a release by its Chairman/CEO, Engineer Olabode Akindeji-Oladeji, said, being a stakeholder in Oyo State in particular and Nigeria in general, the company could not abandon the Lanlate project.
“Our attention is drawn to some online publications dated August 24, 2021 through which in the course of the Honourable Speaker’s motion for infrastructure grant for Lanlate College of Education, our company was erroneously mentioned of having abandoned or absconded from the site of the School of Education at Lanlate.
“It is in this respect that we herewith state clearly the following, for the avoidance of any ambiguity,” the release further stated.
According to Akindeji-Oladeji, the contract for the construction of the School of Education and Central Library was awarded as a contractor finance arrangement on August 10, 2006 for a 26-week duration with payments to be made in a minimum monthly payment of N15million until final and effective liquidation and full total and final payment of contract sum of N100million within a maximum of eight months.
“The contract required the contractor to part-finance the works, and for which we immediately took a loan of N20million to proceed with the works. By October 2007, we were at a completion level of 80 per cent while the College had paid 70 per cent of the contract sum.
“As typical with project situation in Nigeria, prices of goods had escalated after a year, and we requested for a variation of cost, but our request was tactfully ignored. Nevertheless, we continued work on the project site and by January 2008, we had achieved 90 per cent work completion.
“While we would prefer not to join issues with anyone, but for the situation at hand, a committee set up by the Governor Abiola Ajimobi’s tenure to review contracts awarded by past government, without accepting a brief from us and on August 30, 2012, indicted us of owing government money for liquidated damages.
“We greeted the situation with a court action on October 22, 2013 to find a redress to the anomaly. As hearing proceeded, Counsel to the State Government brought up the option of an out-of-court settlement, for which we did not have an issue.
“The out-of-court settlement was therefore put in motion and negotiations were engaged from January 2017 and finally concluded in March 2018.
“The negotiated amount which was based on 2018 prices amounted to N41,717,174.10, being labour and material cost needed for the completion of the School of Education complex and Central Library and N8,535,463.93, being financial charges on the loan facility taken for the works. The agreement was entered as a consent judgment on March 23rd, 2020,” he added.
Akindeji-Oladeji said, after several discussions with the state government and still working with a material and labour cost of 2018, government approved a payment of N20million which was paid in January 2021, at which time, the material and labour cost had escalated above the 2018 prices.
“Nevertheless, we re-mobilised to site and undertook all pertinent works that the N20million would undertake, leaving us with about N5million worth of work to complete the school of education.
“We consequently informed the College of the situation, and suggested that we’ll raise the money to finish the school of education, but a guarantee must be given for the payment of the amount from the balance of N21,717,174.10.
“In addition, the College Bursar had made a point to remove taxes from the said amount, a provision which was not included in the settlement agreement. With the scenario at hand, we intimated the College of our proposition to conclude with the consent judgment via our letter dated July 26, 2021.
“The truth is that the banks are definitely not well disposed to fund the project to completion as the judgment debt can only take the project to a partial completion and as such we require a commitment from the College that whatever money we raise to complete the School of Education to an appreciable state would be deducted from the N21,717,174.10 balance of payment for the Central Library.
“Given the fact, that the Bursar has stated the requirement of the state government to deduct taxes of 7.5 per cent, being N3,128,788.06 from the balance of the project payment of N21,717,174.10, an expenditure of N5million on the College of Education + VAT of N3,128,788.06 would foist a balance of N13,588,386.04 on the Central Library.
“Having communicated our detailed explanation as requested in their letter dated July 08, 2021 and which we received on July 26, 2021, and for which we are yet to receive any response from the College, it pre-supposes that the only interest of the College is to strangulate us to complete the project at a colossal loss while making our company indebted to our financiers, irrespective of whose ox is gored.
“It is trite that ‘he who wants equity must come with clean hands’, and in the interest to bring equity to the project at Lanlate, we have waived our rights to any profit from the project, but cannot wish losses on ourselves.
“We are stakeholders primarily in Oyo State and Nigeria as a whole – we cannot abscond or abandon any project,” the chairman of FIAT International Limited added.
