The Federation of Construction Industry (FOCI) has appealed to the Federal Government to consider reviewing its existing contracts based on current market prices of building materials.
Mr Vincent Barrah, FOCI president, made the appeal at a news conference on Thursday in Abuja, saying it was no longer feasible to complete contracts awarded three years ago with the current market prices of building materials.
He said the FOCI established in 1954 as an umbrella body for construction industry in Nigeria, was directing its appeal to the Federal Government because it is its major employer.
He added that the FOIC had evolved over time to be the reference point for sustained excellence in the construction Industry.
“Interactions with member companies have resulted in the maintenance of sound practices, respect for ethics and stability.
“In sum, in every contract, there is variation of price, there is need to review this because it is no longer visible, especially because most current contracts were awarded three, four years ago.
“This is to say contract should be reviewed based on current market prices which are open to verification to enable contractors deliver on their contracts,” Barrah said.
He added that decisive actions should be taken to alleviate the plight of construction companies and safeguard the future of construction industries.
Barrah, specifically proposed a review and update of contract provisions, adding that a comprehensive review of existing contract templates and procurement guidelines should be conducted.
This, he said, should 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 said.
He also proposed strengthened monitoring and reporting mechanisms to track changes in material prices and assess their impact on project costs in real time.
According to Barrah, this will enable proactive identification of cost over runs and facilitate timely interventions to mitigate their effects.
He added that government should also consider enhanced financial support mechanisms, such as access to low interest loans and grants to construction companies.
Barrah expressed optimism that this would mitigate the financial strain caused by inflation and facilitate project continuity.
He said comprehensive policy reforms were needed to address structural issues contributing to inflationary pressures in the construction sector, including supply chain bottlenecks, regulatory barriers, and market distortions.
He said the FOCI was in discussion with relevant associated employees’ unions in the construction industry with the aim of adjusting the salaries of its employees to the current realities of household expenses.
He listed some of unions the FOCI was discussing with to include the National Union of Civil Engineering Construction, Furniture and Wood Workers (NUCECFWW) and Construction and Civil Engineering Senior Staff Association (CCESSA) among others.
He assured the government and the general public of continuous support in developing the country’s infrastructure.
“We stand ready to collaborate with the government and other stakeholders to chart a path forward that ensures the resilience and sustainability of the construction sector.
“Together, we can overcome the challenges posed by inflation and lay the foundation for a prosperous future for our nation,” the FOIC President said.(NAN)
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