Developing Story: Contractor Sues Otu to Court over failed State Library Contract Deal

Developing Story: Contractor Sues Otu to Court over failed State Library Contract Deal

Governor Bassey Edet Otu's administration is currently facing charges for failing to adhere to a contract agreement with Henss Asset Company Nigeria Limited regarding the renovation and remodelling of the Cross River State Library Complex.

According to documents obtained by our reporter, the Cross River State Government, under Governor Otu, engaged Henss Asset Company Nigeria Limited to renovate and remodel the dilapidated State Library Complex in Calabar, located behind Millennium Park. The contract was awarded for N670,424,703.35 (six hundred and seventy million, four hundred and twenty-four thousand, seven hundred and three naira, thirty-five Kobo) 

The contract payment structure was outlined as follows:

Mobilization Fee: 30% of the total contract sum, amounting to N201,127,411.00 (two hundred and one million, one hundred and twenty-seven thousand, four hundred and Eleven Naira).

During Execution: 50% of the contract sum, amounting to N335,212,351.67 (Three Hundred and Thirty-Five Million, Two Hundred and Twelve Thousand, Three Hundred and Fifty-One Naira, Sixty-Seven Kobo), payable upon presentation of an interim payment certificate.

Completion Fee: 15% of the contract sum, amounting to N100,563,705.50 (One Hundred Million, Five Hundred and Sixty-Three Thousand, Seand Five Naira, Fifty Kobo).

According to a statement by the management of Henss Asset Company Nigeria Limited, the company began work on the site in December 2023.  

In February 2024, the government paid the contractor the sum of  N164 million 2024 as the 30% Mobilisation fee instead of N200 million. it was later realised that about N36 million was deducted from the N200 million mobilization fee as taxes.

The management added that in April 2024, the state government had expected that the project will be completed and commissioned  in May 29 which thw contracted pointed as impossible due delay in payment by the government and is not the agreed project delivery timeline. In April 2024, the government terminated the contractors' contract, claiming that they could not meet the commissioning date of May 29, 2024.

The management of Henss Asset Company Nigeria Limited argued that the slow pace of the job was due to the late release and paucity of funds by the government. Having tried to resolve the matter amicably with the government, all efforts proved abortive as the state Ministry of Special Duties took over the  project, and the state governor secured executive council approval to increase the contract sum.

This prompted the contractor to take legal action against the administration.

Court Intervention

 The contractor seeks that the court remedy the matter by ordering the Cross River State overnment to pay  the contractor for the work already done in the library and also pay the damages accrued.

On May 6, 2024, the Cross River State High Court issued an order that both parties should maintain the status quo pending the hearing and determination of the matter. This judicial directive was intended to prevent any actions that could alter the subject matter of the dispute and ensure that the legal process could proceed fairly.

Alleged Violation of Court Order

Despite the standing court order, the administration of Governor Otu has continued the renovation project through the Ministry of Special Duties. This continuation of work has been deemed a clear violation of the court's directive. By proceeding with the renovation, the administration is accused of undermining the authority of the court and disrupting the legal process.

According to sources, the standing order to maintain the status quo is crucial for preserving the integrity of the legal proceedings. It aimed to prevent any irreversible changes that could prejudice the parties involved. The administration's disregard for this order raises concerns about respect for the judicial system and the rule of law.

Delays in Legal Proceedings

In addition to violating the court order, the state government has repeatedly delayed filing its claims and processes in court. These delays have resulted in numerous adjournments, significantly hindering the timely resolution of the case. The contractor, Henss Asset Company Nigeria Limited, has expressed concerns about the impact of these delays on the case, emphasizing the need for a swift and fair judicial process.

Impact on the Contractor

The contractor is particularly worried about how these issues might affect the final resolution of the dispute. The continuation of the renovation project and the delays in court proceedings could potentially lead to irreversible changes, complicating the situation further. Henss Asset Company is now seeking payment of the monies owed and damages for the breach of contract. It is imperative that the judicial process is respected and allowed to proceed without interference to ensure a balanced and unbiased resolution.

Conclusion

According to a source familiar with the development but not authorized to speak on the matter, the ongoing renovation, despite a court order to halt, and the delays in legal processes underscore the tensions and complexities of the case. The contractor's work was halted in April 2024 under the pretext that progress was slow and that the library was meant to be commissioned by May 29, 2024. However, the library has yet to be commissioned, and the governor has sought Exco approval to increase the contract sum by another N600 million and awarded to another contractor. This situation highlights the broader issues of governance, respect for the rule of law, and the administration's commitment to fair contractual practices.