Most road construction projects across the country are lagging behind while some are currently on hold as foreign exchange (forex) volatility has triggered a rise in the price of bitumen, a critical component in road construction, it has been learned LEADERSHIP.

This development has led to adjustments in the financing of road construction projects, with some projects seeing their delivery dates postponed. Bitumen, a major component used in the production of asphalt, increased by 150 percent in seven months, specifically between August 2023 and March 2024, and the price rise continues.

LEADERSHIP checks showed that 20 tonnes of bitumen, sold for N854,375 in August 2023, now costs over N2 million in August 2024.

Road contractors are also concerned about foreign exchange differentials, rising prices of cement, diesel, granite and crushed stones.

While some contractors have abandoned projects, others are engaged in bitter discussions with their clients over the need to renegotiate contracts and reconcile variations in material costs.

An impeccable source at Lagos Public Works revealed that the cost per tonne of asphalt as of August 2023 was N70,000 but it increased to N155,000 by March 2024.

Considering the rate of inflation in the price of bitumen between August 2023 and March 2024, the source said, 20 tonnes of the product cost N854,375 in August; 1,121,175 naira in September; 1,082,775 naira in October; 1,301,000 naira in November; 1,351,000 naira in December 2023; 1,366,000 naira in January 2024; N1,770,280 in February and N2,008,330 in March, respectively.

Various factors such as inflation, exchange rate volatility, removal of fuel subsidies, state budget deficits and dependence on imported materials have been identified as the reasons for the rise the cost of bitumen and other construction materials.

Meanwhile, Minister of Works, David Umahi, has warned contractors engaged by the ministry for federal road projects that government will not pay for changes to a project delayed by contractors.

Speaking on the road construction sector, Umahi reiterated his stance on the use of asphalt or concrete in the construction of federal roads across the country, stressing that there is still no controversy over this question. He said each technology is subject to conditions relating to its deployment on Nigerian roads. He strengthened his position on the six main policies of the Ministry of Works to guide the road construction sector in the country.

According to Umahi, clarification became necessary because several factors were raised regarding the concrete technology alternative, even though “all things are not equal and can only be understood by professionals and not by people who do not understand them.” have no knowledge.

The National President of the Nigerian Institution of Roads and Transport Engineers (NIHTE), Saidu Hassan, has maintained that the increase in the price of bitumen would impact the cost of road construction.

Hassan said that to date, the price of bitumen has seen an increase of about 150 per cent from N1.4 million per metric tonne in December 2023 to N1.77 million in the current month. He said the government, as a major player in the use of bitumen, should intervene to increase its supply to carry out road projects across the country.

FOCI President Vincent Barrah underlined this call, highlighting the incessant inflation of construction materials and the rise in the price of diesel, which have plunged the industry into unprecedented difficulties, jeopardizing the viability of countless projects and threatening the livelihoods of millions of workers.

Barrah pointed out that expensive construction materials, including cement, steel, gravel and asphalt, significantly increased project costs, making industry players insolvent.

The skyrocketing price of diesel, a key fuel source for construction machinery and vehicles, has further increased the financial burden on businesses, worsening their already precarious financial situation.