A team of journalist’s from various media houses recently undertook a visit to the Line 11 and Evacuation Road projects constructed by the...
A team of journalist’s from various media houses recently undertook a visit to the Line 11 and Evacuation Road projects constructed by the United Cement Company of Nigeria Limited (UniCem) in Cross River, Nigeria’s Niger Delta Region.
A team of journalist’s from various media houses recently undertook a visit to the Line 11 and Evacuation Road projects constructed by the United Cement Company of Nigeria Limited (UniCem) in Cross River, Nigeria’s Niger Delta Region.They also spoke with Mr Oliver Lenoir, the Managing Director of the multinational company, shortly after the visit. Our Regional Correspondent, Diana Okon-Effiong was there. Excerpts.
The Evacuation Road project has suffered delays in completion, what has been the major impediment to this project?
The Review in Scope of the project, challenging alignment of the road due to vast swamp and limestone rocks deposit on the right of way and Inclement weather due to excessive rainfall experienced in Cross River State have been the major limitations to early completion of this project.
Looking at the terrain, how many bridges and culverts are along the stretch of the entire road?
There are two bridges on the entire stretch of the road, one of 30m length, across Etamkpini River at km 13.5 and another of 105m length, across great Qua River at the border of Ebereka and Etamkpini at Km. 9.6 and in all we have over 80 numbers of box and pipe culverts across the 20 kilometre Evacuation road. These are conceived to give the road the desired stability in view of the terrain.
What maintenance arrangements do you have put in place for the road after completion?
Care was taken to provide for two years post completion maintenance cost in the contract. The contractor will be around two years after completion to address any challenge that may arise when the road becomes available to traffic.
What is initial cost of the road project and with the delay, has there been any review of the initial project cost?
Originally, the project was estimated to cost about 5bn Naira but with the review as earlier mentioned due to the challenges, the total cost now is over 9bn Naira.
When is the completion date for the project and how certain are we about the completion of the project as anticipated?
The current completion date for this project is September 2015, the major challenges of the project which include the rock excavation and filling of the swamps are near completion.
The current route plied by your product transporters-the Atimbo Road into Calabar has been in a deplorable condition until recently when a minor repair work was done. We hear that UniCem had declined direct maintenance due to the imposition of the road maintenance levy introduced in September, 2013 by the Cross River State Government. What is the current position with respect to the levy?
Government has been collecting the levy of N12, 800 per truck since 2013 September as you have rightly mentioned. We understand it is meant for road rehabilitation and we expect accordingly that the proceeds from the levy will be utilized in that regard. It is Government’s responsibility to do so and not UniCem. We were demonstrating goodwill when we did the rehabilitation in the past before 2013. The current repair carried out by FERMA is commendable and should be sustained.
What is the level of work done so far since the ground breaking ceremony of the Line II project?
We have made progress on the project. The actual progress on extension of the Captive Power Plant (CPP) is 85%, and for the civil construction of the 2nd line is 38%. Both progresses in line with the schedule of work.
How many persons are to be employed in the construction phase of the project and what number will be employed at the operational phase?
As you may have seen from the Presentation earlier, this project will at peak employ a total manpower of 1915. At this moment the manpower working in the project is 1290. The operations will determine what the manpower need will be when we handover the project.
What challenges do you currently encounter and will this project be completed on schedule and when?
The principal challenges in this project are:
Non-technical:
Malaria. We are experiencing higher level of malaria in this part of the country than expected.
Heavy rains. It is difficult to predict how long the rainy season here is.
Customs Clearance
Interaction with current Line I Operations.
We are optimistic to finish the project on schedule. The relevant dates are:
· Construction of the 2nd line:
– Clinker NOCP (Normal operation condition period) forecast to date => September 2016
– Cement NOCP(Normal operation condition period) forecast to date => December 2016
· Extension of the captive power plant
– -End of performance test => September 2015
Provisional acceptance of power plant => October 2015
The coming into operations of the second line will increase your capacity and translate to more cement in the market; do you foresee any reduction in price per bag of cement in the market?
Ordinarily, yes it should translate to more supply which should bring down the retail selling price following the basic economic principle of Demand and Supply. However, other cost-push variables are not constant nor reducing e.g. energy cost, distribution cost including taxes and other environmental factors like road infrastructure.
What is key in driving down retail selling price is reduction in cost of production and distribution which the government can do by creating of enabling environment like provision of basic infrastructure. We hope the incoming government will look into this by addressing the current road infrastructure concerns.
Last year, the cement industry dominated the media with the issue of the new cement standard. Have you started implementing the requirements of the new standard?
UniCem produces and sell cement products that conform to applicable standards in Nigeria. All our products are in compliance with regulatory standards. We went to offer production and services that satisfy customers’ needs.
What are the impacts of the devaluation of the naira and declining oil revenue to your business?
The devaluation of the Naira impacts negatively on our business because most our transactions like procurement of spares and materials, payment of some of contractors (Macmahon and CBMI), energy cost and servicing of foreign creditors are basically dollar denominated. Cumulatively, we will have a revenue loss of N9bn in 2015 due the devaluation of the Naira.
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