Quality, contractors’ disappearance, other issues stall agro-processing project

The delay in the execution of the agro processing centre projects across the country has been attributed to the disappearance of contractors and the disagreement between investors, contractors and equipment fabricators over the use of substandard materials by the fabricators. This was revealed during the meeting of the stakeholders held in Abuja.

Speaking at the meeting the Director, Project Coordinating Unit (PCU), Federal Ministry of Agriculture and Rural Development (FMARD) Dr. Maimuna Habib, said that the meeting was necessary because of the disagreement between the investors, contractors and the fabricators, which was exposed during the visit of the PCU team to the 36 states, where only 13 was said to be completed but yet to be commissioned.

She explained that the abandonment of the agro processing centres’ projects across the country was tied to investors rejecting most of the equipments supplied by the fabricator due to their poor quality.

 She also pointed out that even though the project funded by the Bank of Industry (BOI) was awarded in 2010, and that as stated in the Memorandum of Understanding (MoU) signed by FMARD and BOI, the project was to be completed in six months, but which inadvertently had dragged until the point that most of the contractors had abandoned most of the projects, with many of them being vandalised.

The PCU director disclosed that there might be a deliberate delay, as contractors, investor and fabricators were having issues within themselves, adding that if the project needed to work it has to be looked at holistically.

Engineer Hassan Bawa in charge of the Agro Processing Centre Project under the NPFS/PCU said that case of the abandoned projects across the country was pathetic as many of the contractors had absconded after civil work and equipment payment, which were never used to complete the project leaving most of the projects damaged by the rain, as most of the centres are situated in rainy environment.

Bawa disclosed that the death of some of the investors had also affected most of the projects’ continuity, as many of the contractors are not willing to return to the project sites unless there was an upward review of the contract sum by the government.

He added that the bank of industry had also called on the bank of industry to bring the tedious terms of the MOU, to what is workable.

The Representative of the investors Mr. Peter Dama, said that there were those that their projects were completed and there were those whose projects were still lingering, “and in as much as the project was still ongoing, we feel that there should be a review of the contract, as the project is written and reviewed since 2010, and looking at the fact that most of us might not have the money to continue or complete the project, otherwise we continue moving without destination.”

He complained that the technologies used were of poor standards “and that is why some of the equipment produced was not accepted by the investors” and that the biggest challenge was energy which had resulted in the delay of production, stressing that the disparity in terms of subsidy given to the big rice farmers should also be given to the small millers who are integrated rice millers, as smuggling is also a major problem for not just rice producers but to also other value chains.

He pointed out that the issue of the subsidy of the CBN, should also include the babies of the FMARD to be able to access the fund so that they can meet up with the market competition.

Dama stressed that the issue of bureaucracy should be reduced as there should also be off takers for some of the produce on ground.

Also speaking at the event, the representative of the contractor who showed pictures to prove that the project was completed said that the contractor was short-paid by one million naira in addition to the delay in his payment by BOI, saying that he had to remove some of the equipment, so that they would not be vandalised.

Chief Patrick Emako from Abia State said that their own factory had been completed with detailed information and pictures to show, adding that they have also commenced processing of oil palm in the factory, but that the business was presently experiencing price instability as they produce high and sell below their production cost.

He said that the way forward was for the federal government to subsidize, buy from the oil palm processors, keep, then sell, back to the farmers when the produce is on sales by November, December adding that they can also be given cash as a form of subsidy.

Another investor from Nassarawa state Mr. Mark Awenegiemel pointed that the civil and equipment installation of his cassava processing centre has been completed 100%, but that it was sad that after test-running of the facility it was noticed “that the equipments used in the building and installation were nothing to write home about and would not yield much as we are expected to pay back the loans called, as the environment is not favourable.”

 He suggested that the engineering aspect of the cassava project could be “redesigned so that we can be competitive as we spend more money than the local processors.”

 He stated that due to the short fall of the cost, from the inception, the amount allocated for the project was not enough: “when the project was awarded the price of so many things had not gone up, but now, they have gone up and the project needs money.”

The representative of the Bank of Industry (BOI) Mr. Kabir Salaudine Abudrahuf disclosed that the bank had completed disbursement to the states leaving everyone of them to their various contract.

He denied the report that the bank was slow in issuing out funds, saying that “we have to recover the loans out, do internal checks, proper documentations, CBN regulation and the international financial regulations’, and if request come we process as quick as possible.”

He added that the bank could not go out of the mandate given it in the MoU, lamenting the incomplete documents paraded by the contractors and stressed that as soon as the documents were in place the loans will be issued out.