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From Romanus Ugwu, Abuja
Federation of Construction Industry (FOCI) has pleaded with government to do a comprehensive review of existing contract templates and procurement guidelines to incorporate more robust and flexible provisions for addressing inflationary impacts on material costs.
Addressing newsmen in Abuja on Thursday, FOCI President, Vincent Barrah, hinged the appeal on the relentless inflation of construction materials and the price of diesel that have plunged the industry into a state of unprecedented hardship.
Barrah further emphasised that the exorbitant inflation of construction materials, like cement, steel, gravel, and asphalt, has significantly escalated project costs, adding that it has rendered them financially unfeasible for both public and private stakeholders.
“FOCI members have been behind the high quality and sturdy infrastructure in Nigeria. With the high premium placed on quality delivery, structures built by FOCI members have stood the test of time.
“FOCI has over a hundred members who are dependable construction and construction related firms in Nigeria with integrity and professionalism coupled with high skilled manpower and state-of-the-art equipment. FOCI helps to ensure that members benefit from a competitive advantage in all aspects of Construction in Nigeria.
“FOCI representing a significant portion of the nation’s construction sector, wishes to draw the attention of the Nigerian government to the dire challenges faced by construction companies across the country.
“The relentless inflation of construction materials and diesel prices has plunged our industry into a state of unprecedented hardship, jeopardizing the viability of countless projects and threatening the livelihoods of millions of workers.
“However, the current economic climate characterized by soaring inflation rates has unleashed a cascade of adverse effects on our operations, pushing many companies to the brink of collapse.
“The exorbitant inflation of construction materials, including cement, steel, gravel, and asphalt, has significantly escalated project costs, rendering them financially unfeasible for both public and private stakeholders.
“Moreover, the skyrocketing prices of diesel, a critical fuel source for construction machinery and vehicles, have further compounded the financial burden on companies, exacerbating their already precarious financial situation.
“The current exchange rate has doubled the cost of spare parts and further reduce the investment opportunity to expand or replace current machineries.
“The consequences of these inflationary pressures are manifold and deeply concerning. Construction projects are experiencing unprecedented delays and disruptions, as companies struggle to procure essential materials within budgetary constraints,” the federation boss noted.
Making their appeals to government, the federation noted: “FUCI, Nigeria, urgently calls upon the Nigerian government to take decisive action to alleviate the plight of construction companies and safeguard the future of our industry. “Specifically, we propose the following measures: Review and update contract provisions: conduct a comprehensive review of existing contract templates and procurement guidelines to incorporate more robust and flexible provisions for addressing inflationary impacts on material costs.
“This may include adopting mechanisms such as price escalation clauses linked to relevant inflation indices or market benchmarks,” he noted.
