The agony of road users on the Lagos-Ibadan expressway will soon end, as the Federal Government has awarded the contract for its reconstruction.
Wolfgang Goetsch, managing director, Julius Berger, announced yesterday that his firm has won the award for the Lagos-Shagamu end of the road, and disclosed that it has been selected under the public private partnership (PPP) system for the Onitsha-Aba end of the second Niger Bridge. RCC will handle the Shagamu to Ibadan end of the road.
Goetsch, who spoke at the 43rd annual general meeting (AGM) of the firm in Abuja, also foreclosed rights issues as an alternative to sourcing funds from banks for its operations.
“We got the letter of award last week, for the Lagos-Shagamu end of the Lagos-Ibadan expressway and the mobilisation is in process to start the work for the comfort of road users”, he said.
He disclosed that his Lagos office has started the mobilisation, which includes soil tests and strategic management for the road.
“We will mobilise to site in seven to 10 days from today and we will take the road users into consideration in a way to ensure free flow of traffic while construction work is going on”.
On the second Niger Bridge, Goetsch informed that Julius Berger was selected under the PPP arrangement, to complement the Federal Government in constructing the Onitsha-Aba end of the bridge.
“We got the letter of intent from the Federal Government on Monday, having concluded negotiation on the construction work”, he said.
The Federal Government issued tenders for the Second Niger Bridge last year and the discussion with Julius Berger started when the firm emerged as preferred bidder in January this year.
Negotiation has been concluded and the firm has reached financial conclusion on the work, according to Goetsch.
Julius Berger recorded improvement in its earnings for 2012 but interest on loans secured in the year was huge, drawing a whopping N2.7 billion from its balance sheet.
For 2012, the company recorded N197 billion turnover and N201.5 billion on its group’s earnings. The company’s profit after taxation was N7.7 billion, while the group’s operation recorded N8.26 billion.
The managing director however ruled out rights issues as an alternative to bank loans in financing its operations in the country.
“Rights issues have been discussed every year because of our financial issues. We have also discussed it intensively internally but we are not ready to do that for now. It is not wise to go for rights issues since we are getting in-house receivables”