Energy Probe: 10billion Naira Inflated Contracts Uncovered

Nigeria’s House of Representatives Committee on Power and Steel has uncovered two fresh contract scams in the power sector worth 10 billion naira.

This revelation came to light at   the ongoing probe into how former President Olusegun Obasanjo’s government spent 16billion dollars on power without any commensurate result.

The Contracts

Skip to next paragraph One of the contracts was the New-Haven-Ikot-Ekpene power line awarded to ENEGO Nigeria Limited, a firm chaired by former Head of State, General Abdulsallami Abubakar retired

The transmission line, covering a distance of 168kilometres was awarded in the initial sum of 13billion naira but officials of the Power Holding Company of Nigeria reportedly inflated it to 19.7billion naira, with a difference of 6.7billion naira.

The distance of the transmission line was also fraudently extended by more than half to 340 kilometers.

Another contract, the Afam transmission line, initially awarded for N3.3bn, was also discovered to have been inflated by 100 per cent.

The distance of the line was extended from the original 75km to 150km to cover up the alleged fraud.

The Chairman of the panel, Mr. Ndudi Elumelu, pointed out the difference when the Acting Director-General of the Bureau for Public Procurement, Mr. Emeka Ezeh, appeared before it in Abuja.

When Ezeh was asked what he thought should be done in such cases of fraud, he replied that if such funds were found to have been fraudulently taken, they should be refunded to the coffers of government.

He said, “The submission underscores the need for due process. The officials involved must be up and doing. If the scope is not properly defined, they will have to apply the money up to the scope of work. All the quantities are provisional. If you realise instead of five kilometres, you have done two kilometres, the contractor will be paid for two kilometres.”

He continued “If the work goes beyond the scope, the contractor has a right to ask for more payment. The project you cited has not been completed. The payments we made are on account basis. I expect the officials to ask for refund when preparing the final certificate.”

Alibi

He, however, observed that most contracts ran into problems because contractors solely drafted the agreements and asked government officials to sign.

He added that in such situations “the contractor puts caveats that will be in his favour.”

Ezeh told the panel that the bureau, otherwise known as the Due Process Office, certified contracts worth 239.5million dollars for payment out of a total of 1.7billion dollars, about 195.6billion naira .

On why companies that were not registered won contacts, Ezeh said that by the time the documents reached the bureau it was taken for granted that the ministry awarding the contracts had certified the firms.

He added, “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 on those who approved the firms.”

He, however, explained that the office did not certify the payments for any of the 320 power projects awarded under the National Independent Power Projects.

The Due Process Officer affirmed “Due Process did not certify any NIPP projects for payment; they were presidential intervention projects, so they did not pass through us.”

Funds totalling over 3.07billion naira were drawn from the Excess Crude Account to fund the NIPP during the administration of former President Obasanjo.

 

NP/Qasim