Heavy debt burdens arising from jobs executed by contractors but yet to be paid for by the federal, states and local governments have dragged down the productive capacity of the construction industry to below 30 percent, operators in the sector say.
The operators add that their plight is being compounded by threats from their bankers to publish their names in the national dailies, explaining that many of them had taken loans to execute contracts for which the government is getting commendation, but not paying.
“The construction companies in Nigeria today are operating below 30 percent capacity, not because they are incompetent or can’t find find work, but because they are handicapped by heavy indebtedness by governments at the federal, state and local levels”, said Solomon Ogunbusola, the president of Federation of Construction Industries in Nigeria (FOCI).
Ogunbusola, who spoke at a press conference in Lagos to announce the federation’s forth-coming 59th Annual General Meeting (AGM) and Trade Exhibition scheduled for next week, disclosed that the Federal Ministry of Works alone was owing their members about N500 billion.
“A lot of people working in our member-companies and industries are being retrenched, and this will continue until something positive happens. We are still keeping the offices because we want to remain in the system, hoping that the new administration is going to be better”, he said.
Franco Borini, an engineer with Borini Prono, an Italian construction firm, handling the construction of the 400 capacity Trailer Park on Apapa-Oshodi Expressway, had confirmed to BusinessDay that the park, for which the contract was awarded about four years ago, was being delayed because “nobody is talking to us from the ministry; we are on site but we are not doing much”.
An official of the Ministry of Works also confirmed to BusinessDay that contract debt was piling, adding that most government contracts were stalled by lack of funds. The official however rationalised that government had other competing needs to attend to.
The official who did not want to be named, hinted that “from the onset of the electioneering campaigns for the March/April elections, most of government projects have been on the back burner; everybody is waiting for the incoming government to take off”.
Ogunbusola called for an emergency intervention in the construction sector, saying that the new government could declare an emergency in this industry and lamented that government was taking glory for the work their members had done with bank loans.
He listed some of the companies being owed as Julius Berger, S & M Construction Company Nigeria Limited, G.Cappa Plc, CFAO, Hitech Industries Limited and Costain West Africa, among others, pointing out that most of the companies being owed were not talking for fear of being blackmailed or blacklisted.
CHUKA UROKO
