Vanguard (Lagos)

19 March 2008
Posted to the web 19 March 2008

Leon Usigbe and Tordue Salem
Lagos


CONTRACTORS involved in the execution of the controversial National Integrated Power Project (NIPP) may be asked to refund N3.3 billion for alleged inflated contracts, the Bureau for Public Procurement, otherwise known as Due Process, said yesterday.

Acting Director of the Bureau, Mr. Emeka Eze, testifying before the House of Representatives Committee on Power and Steel said the bureau certified projects worth N195.6 billion or $239 million for the NIPP.


Managing Director of Shell Development Company (SDPC), Mr. Mutiu Sumonu, who also testified yesterday said the Nigerian National Petroleum Corporation (NNPC) had not remitted its counterpart funding of $577 million for the Afam VI CCGT 642 megawatts integrated gas to power project.

Eze said the N195.6 billion was in respect of projects above N50 million which were presented to the Federal Executive Council for approval.

He, however, said the Due Process office did not approve payment for the projects because NIPP was a Federal Government intervention programme which was not overseen by the Bureau.

His words: "These figures are for projects above N50 million that go to the Federal Executive Council. N195.6 billion and when converted, it is 24 million in euros and $239 million. NIPP doesn't come to us for payment because it is a presidential intervention. All the contracts for NIPP were certified for award but because they were presidential intervention, they didn't have to come to us for payment."

In response to a question by a member of the committee, Mr George Daika, to the effect that some of the NIPP projects especially Afam Transmission line had been inflated with about N3.3 billion without the Due Process office doing anything about it, Eze said issues like that justified the setting up of Due Process.

He said officials involved in the certification of inflated contracts would be fished out and punished, adding that he expected excess money paid on any contract to be refunded by the contractors.

"Government lost a lot of money and that was why Due Process was established. People were protected when they went wrong but President Yar'Adua has signed a new law which ensures jail term for up to five years when found guilty.

"This public hearing underscores the need to strengthen due process. The projects you are talking of were awarded in 1999 to 2000. I will clap for myself with my two hands and even legs. A lot of people who are not connected can now implement jobs. At a point it was fashionable for people to say that they have not executed projects because their file is in due process. The law says you cannot keep contractors file for more than 60 days. If you do, you pay compensation."

Contractors to refund money for jobs not executed

On contractors who collected money but have not executed the contracts, he said it was easy to retrieve such monies from them. "Occasions like that will arise if the project managers are not diligent.

The contractors are supposed to provide bank guarantees. If you see that the contractor can't meet up, you force the contractor to revalidate the advance payment. You get the bank to refund your money. You don't even have to beg the contractor," he said.

Similarly, the Due Process chief said it was not the business of the office to verify the registration of contractors whose files were before the office, saying: "We take it for granted that by the time they come to us for clearance, those things are already taken care of. If they are not registered, they are non-existent. If unregistered companies are given jobs, the full weight of the law would be brought to bear."

He defended his office against complaints that it was slowing down implementation of government projects, warning Ministries, Department and Agencies, MDAs not to use Due Process as excuse for not implementing their projects.

"The difficulties that have arisen from due process is due to our insistence on the right thing. We want to give it as a commitment that we won't certify any project if the documents are not right. There are no bottlenecks in due process but from the complaints of people who say their work is not certified. It is an indication that due process is working. We are not giving in to pressure from people. We want to appeal to all our MDAs not to use due process as an excuse for job not done," he said.

Committee members differ on unregistered contractors

Meanwhile, the committee members differed yesterday on whether the contractors who, according to the chairman of the committee, Mr Ndudi Elumelu, had earlier said were not registered with the Corporate Affairs Commission (CAC) but got NIPP contracts, were indeed not registered.

This followed an observation by a member of the committee, Mr Muraino Ajibola who said the committee's view of the registration of contractors had not been accurately reflected by the media.

He argued that the CAC in its letter to the committee did not say that the contractors were not registered but requested more information to enable them to do a proper search for their registration.

According to him, "we owe Nigerians the duty to investigate. We must be very careful. The last caveat of CAC issue says it will be appreciated if further information be supplied to enable them do further search. An investigator does not jump into conclusion. We have our integrity at stake. We are yet to know if these companies are duly registered."


However, another member, Mr Patrick Obahiagbon, faulted him, saying the media report on the registration was correct and was supported by the chairman, who warned against sentiment in the work of the committee.

Elumelu said a Senator had called him after Tuesday's sitting to complain about his statement that the Senator's company which was among the list of contractors given to the media was not registered.

He said: "I am not here to curry favour from anybody. A senator came here and said he heard his company was not registered. I have spoken to him the best way. I asked him to go back to CAC to certify that the company was registered. If he gets the letter, we will read it out. This goes to every other company that has been adjudged not to have been registered. Let us not personalise issues.

"I got a letter that there is tribal sentiment because Agagu was asked a question. If anybody was listed, go and get a letter from CAC showing that the company has been cleared. The letter has been read out and I stand by that letter."

NNPC yet to remit $577m conunterpart fund for Afam VI

In his testimony, Managing Director of Shell Petroleum Development Company (SPDC), Mr. Mutiu Sumonu, said the NNPC had not remitted its counterpart funding of $577 million for the Afam VI CCGT 642 Megawatts Integrated Gas to Power Project.

According to him, since the Federal Government counterpart funding for the project was not forthcoming, the project had suffered delays leading to the seeking alternative financing sources of funding.

Sumonu noted that the cumulative amount spent on the project was approximately $1.05 billion, and $392 million would be needed between now and 2009 to complete the project.

According to him, since the NNPC/Government share of 55 per cent is not forthcoming in the Joint Venture project, there has been closure on securitisation which would hinder the increase on transmission capacity by the TCN/PHCN.

He said Shell would construct Afam V1 642 MW CCT and the new High Voltage Switch Yard with a Long Term Service Agreement with government and also the New Okoloma Gas Plant 240Mm and the new gas receiving facility, drill well construct flow lines and Pipeline while at the same time build new accommodation facility for the operators.
Agagu's ex-aide pleads for protection

Also testifying, former Special Assistant to Chief Olusegun Agagu when he was the Minister of Power, Mr. Jerome Akinwumi, called on the committee to protect all those testifying before it as he claimed that his former boss, Chief Agagu vowed to deal with known individuals who he thought were behind his travails.

Said he: "Sometime in February this year, precisely on the 10th of February, I received a call from Oluyomi and claimed that he was calling from the National Watchers which said they were in possession of documents relating to supply of electrical materials and equipment and as SA to the minister, I was a major beneficiary that I have a company called Cramer. In that position, I was not a member of the committee that awarded contracts. I was not a member of the ministerial Tenders board. Lastly, I was accused of benefiting N240 million. I don't know any company called Cramer Industry.

"The National Watchers may be patriotic but SSS once invited me and requested that I should tell them about the contracts awarded in Ondo State. I told them ecological projects were not handled by the ministry where I served. At the end of the day, they asked me to go.

"When the former minister was giving evidence yesterday (Monday), he said he knew those who were behind the allegation and he was going to deal with them. One of the officials of National Watchers called me to bring the threat to my notice and I asked him whether he heard it from me. I want to request the committee to make sure that all those testifying before it are protected," he said.

However, a member of the committee, Mr Gbenga Elegbeleye, accused him of pursuing a personal agenda since he failed to realise his ambition of becoming the Chief of Staff to Chief Agagu.

"You fell out with the governor because you wanted to be Chief of Staff and he did not appoint you. Since then, you have not been in the same party. Why can't the real people involved come here to defend the petition themselves?" he charged but was over ruled by the chairman of the committee.

this one na long tin!!!!!!!!!!!!

it's a good thing that they are demanding accountability from contractors. it's long overdue.

however, methinks that this is a case of 'if a child is troubling you, give him a toy to distract him'. Yar'Adua must think that the nigerian socio-politico-economic field is very much like a lecture theatre. we have heard nothing but promises and the reports of panel upon panel. these investigations are hings that can be on-going, but the priority now is to creat effective supply of light for nigerians. collecting 25bn from defaulting contractors doesnt automatically translate into electricity for all.

on the other hand, today's news says that a world bank loan of $121m was obtained in the name of electricity project. i am ashamed. after working soo hard to get our debt reduced, some people just went to accumulate some more as though we grow money trees in nigeria. and there is stil nothing to show for it all, except worsening power problems.

they should not even think about lying about the origin of that loan. they cannot claim to be ignorant of it. if they are, it is a slap on their (NASS) face. who endorses/acts as guarantee for the loans??

iceblue:

this one na long tin!!!!!!!!!!!!

it's a good thing that they are demanding accountability from contractors. it's long overdue.

however, methinks that this is a case of 'if a child is troubling you, give him a toy to distract him'. Yar'Adua must think that the nigerian socio-politico-economic field is very much like a lecture theatre. we have heard nothing but promises and the reports of panel upon panel. these investigations are hings that can be on-going, but the priority now is to creat effective supply of light for nigerians. collecting 25bn from defaulting contractors doesnt automatically translate into electricity for all.

on the other hand, today's news says that a world bank loan of $121m was obtained in the name of electricity project. i am ashamed. after working soo hard to get our debt reduced, some people just went to accumulate some more as though we grow money trees in nigeria. and there is stil nothing to show for it all, except worsening power problems.

they should not even think about lying about the origin of that loan. they cannot claim to be ignorant of it. if they are, it is a slap on their (NASS) face. who endorses/acts as guarantee for the loans??

LMAO!!!!! I have been feeling this is all that has been going on for a while now myself.