The administration of Governor Bassey Edet Otu is embroiled in a legal battle with Henss Asset Company Nigeria Limited over the failed renovation and remodeling contract of the Cross River State Library Complex.
According to documents obtained, the Cross River State Government, under Governor Otu, had contracted Henss Asset Company Nigeria Limited to undertake the renovation of the dilapidated State Library Complex in Calabar, located behind Millennium Park. The contract was valued at N670,424,703.35 (six hundred and seventy million, four hundred and twenty-four thousand, seven hundred and three naira, thirty-five kobo).
The payment structure for the contract was divided into three phases:
- 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, totaling 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 the submission 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, seven hundred and five naira, fifty kobo).
Henss Asset Company Nigeria Limited stated that work commenced in December 2023. However, in February 2024, the government paid only N164 million as the 30% mobilization fee instead of the agreed N200 million, with N36 million deducted as taxes.
The company further explained that in April 2024, the state government anticipated the project’s completion and commissioning by May 29, a timeline the contractor deemed impossible due to delayed payments. The government subsequently terminated the contract in April 2024, citing the contractor’s inability to meet the May 29 commissioning deadline.
Henss Asset Company Nigeria Limited contended that the delay in project progress was caused by the government’s late release of funds. Despite efforts to resolve the issue amicably, the state Ministry of Special Duties took over the project, with the governor securing executive council approval to increase the contract sum. This led the contractor to seek legal redress.
Court Intervention
The contractor has petitioned the court to compel the Cross River State Government to pay for the work completed and cover damages incurred.
On May 6, 2024, the Cross River State High Court ordered both parties to maintain the status quo pending the hearing and resolution of the case. This directive aimed to ensure the integrity of the legal process by preventing any alterations to the project’s status.
Alleged Violation of Court Order
Despite the court’s directive, the Otu administration has allegedly continued the renovation project through the Ministry of Special Duties, defying the court’s order. This action is seen as a blatant disregard for the court’s authority, raising concerns about the administration’s respect for the judicial process.
Sources indicated that the court’s order was essential to preserving the legal process’s integrity, preventing irreversible changes that could affect the outcome. The administration’s alleged disregard for this order has sparked concerns about its commitment to the rule of law.
Delays in Legal Proceedings
In addition to the alleged court order violation, the state government has reportedly delayed filing its claims and processes in court. These delays have caused multiple adjournments, impeding the timely resolution of the case. Henss Asset Company Nigeria Limited has expressed frustration over these delays, stressing the need for a swift and just judicial process.
Impact on the Contractor
The contractor is particularly concerned about the potential impact of these issues on the final resolution of the dispute. The continuation of the renovation and the delays in legal proceedings could lead to irreversible changes, complicating the situation further. Henss Asset Company is seeking payment for the work done and damages for breach of contract. The company emphasizes the importance of respecting the judicial process to ensure a fair and impartial outcome.
A source close to the situation, who requested anonymity, highlighted the ongoing renovation despite a court order to halt, coupled with delays in legal proceedings, underscoring the complexity of the case. The contractor’s work was stopped in April 2024, with the project intended to be commissioned by May 29, 2024. However, the library remains uncommissioned, and the governor has reportedly sought Exco approval to increase the contract sum by N600 million, awarding it to another contractor. This situation raises broader concerns about governance, the rule of law, and the administration’s adherence to fair contractual practices.
