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Government owes us N600bn – Construction firms lament

By on June 25, 2015

The three tiers of government currently owe operators in the construction industry over N600bn, key players in the sector have said.

It was learnt that over 80 per cent of the sum was owed by the Federal Government, while the states and the local governments made up the balance.

It was further gathered that the debt piled up within the last two years of the administration of the immediate past President, Dr. Goodluck Jonathan.

Operators, who spoke to our correspondent on the matter, stated that although the former administration awarded many contracts, it did not pay for most of the jobs, a development that had made many construction firms distressed.

It was further gathered that about 10,000 workers in the construction industry had been retrenched due to the inability of the firms to pay salaries as a result of non-payment of the debts.

Confirming the development, the President, Federation of Construction Industry, an umbrella of the major construction firms in the country, Mr. Solomon Ogunbusola, said the operators would have protested by carrying placards if they had the ability to do so.

When asked to state specifically the amount owed the construction companies across the country, he replied, “It is over N600bn.”

Ogunbusola added, “I can mention over three companies that are owed over N200bn. Julius Berger, their financial director said it in their AGM that they are being owed over N90bn. And out of the N90bn, over N70bn is owed by the Federal Government.

“The SCC is owed over N70bn too; and Setraco, over N80bn. So, all the companies are being owed. Dantata too is owed and I will not tell you what I don’t know. How can you continue to owe all these companies? We have never had it so bad, especially in the last one or two years.

“Because the payments are not coming, we don’t know what to do. We cannot carry placards; so, we have to make this known through the media.”

He urged the government of President Muhammadu Buhari to settle the indebtedness to the construction firms in order for the country to make tangible progress, stressing that the sector was fundamental to the success of his administration.

Ogunbusola said, “If this government wants to really work, it has to take care of the construction industry, except somebody is there to drag the government backwards. If we are not making roads and buildings, constructing air and seaports for the government, the whole populace will say the government has done nothing.

“So, if President Buhari is to succeed, we are the ones that will make this happen quickly for people to see it. We are not saying they should pay everything at once, but instead of owing everybody so much money, if they can pay half or a quarter, at least it will make us come back to our duty posts.

“Because right now, all the companies are in distress. Even Julius Berger, which is the biggest construction company right now in the country, is in distress. I am saying this categorically. Maybe they used to have about 15,000 workers, but right now, they don’t have up to 7,000 employees. They have retrenched over 7,000 workers in the last one year.”

He stated that despite a series of meetings with the government, the excuse usually given was that there was no money.

The FOCI president added, “When (former) President Goodluck Jonathan was there, we were not paid. When I was in Lagos, I said his government gave so much work to the construction industry, yes that’s true.”