Lagos: Critics complain the new head of the state-run Nigerian National Petroleum Corporation, Shehu Ladan is tied to corruption dragging on the energy sector. Acting Nigerian President Goodluck Jonathan replaced NNPC chief Mohammed Barkindo with Shehu Laden, a former head of the national oil company.
Laden was fired from his post at the NNPC by Umaru Yar’Adua, the Nigerian president who fell ill in November.
The dismissal of Barkindo was viewed by critics of the acting president as an inside move, the BBC reports. His opponents said Laden is linked to corruption that has dragged on the Nigerian energy sector.
Political uncertainty and militant activity in the oil-rich Niger Delta region is forcing international oil explorers to move cautiously in Nigeria as domestic production efforts limp along.
The BBC report said the reappointment is an effort to breathe new life into the NNPC.
The shuffling comes as Jonathon exercises his political authority after gaining executive powers in February. The first Cabinet under Jonathon was appointed Tuesday and lawmakers are calling for a move to declare ailing Yar’Adua incapacitated.
Changes in NNPC won’t stop probe, Senate insists
Reps panel claims monumental fraud in airport runway contract
THREE public institutions – the Nigerian National Petroleum Corporation (NNPC), the Federal Airport Authority of Nigeria (FAAN) and the Bureau of Public Procurement (BPP) – are to remain under the scrutiny of the National Assembly in the days ahead.
The Senate, which is set to look into the financial transactions of the NNPC, said yesterday that Tuesday’s sack of its Group Managing Director (GMD), Dr. Mohammed Sanusi Barkindo, by Acting President Goodluck Jonathan would not affect its resolve.
A principal officer of the Upper House said yesterday that the Senate would still scrutinise the financial records of the corporation from 2007 till date.
The House of Representatives, through its Committee on Aviation, set the stage yesterday when it grilled aviation chiefs over the controversial N63.5 billion Abuja Airport second runway.
The House action followed allegations that due process was violated in the selection of the contractor, Julius Berger Nigeria Plc for the project by FAAN and BPP.
It was also alleged that there were cases of inflation of the runway contract.
A Senate source said: “We are going ahead with the investigations of NNPC because it was not targeted at a person but a system that we suspect allows for the mismanagement of our hard earned money.”
Thirteen senators had put together a motion seeking a comprehensive investigation of the records of the NNPC.
For weeks, the motion was listed for deliberations but was skipped several times leading to fresh grumbling among the lawmakers.
Two weeks ago, it was speculated that the screening of ministerial nominees was responsible for the motion not being discussed.
Senators had even mulled the idea of Barkindo proceeding on leave to pave way for a thorough investigation.
Four principal officers of the Senate, including the Majority Leader, Teslim Folarin; Minority Leader, Ma’aji Lawan; Deputy Majority Leader, Victor Ndoma-Egba (SAN); and Deputy Minority Leader, Adeleke Mamora, were among signatories to the document calling for an inquiry into the monies that came to NNPC since 2007 and how they were spent.
At the yesterday’s hearing on the airport runway project in the House of Representatives, the committee chairman, Bethel Amadi, said the session was to determine the alleged inflation of the contract from N4 billion to N63.5 billion and to ascertain how the Ministry of Aviation, the BPP, and FAAN arrived at the figure.
First to testify were the Managing Director of FAAN, Richard Aisuebeogun, and his Director of Engineering Services, Saleh Dunuma.
Aisuebeogun said the idea to build a second runway was necessitated by the fact that the present one was built 30 years ago, which he declared had run out its life-span. He stressed that the proposed runway upon completion would accommodate the largest aircraft in the world – the A380.
He explained that the project would come with perimeter fencing, Category 3 airfield lighting, crash roads, satellite fire system, associated civil works, and navigational aid.
The FAAN boss, however, said six companies – Julius Berger, PWD, Dantata and Sowei, China Habour and RCC – made bids for the project, with Julius Berger coming top.
Under cross examination, Aisuebeogun said while Julius Berger quoted N72 billion initially for the job, PW and others demanded less than N30 billion and the question was asked why FAAN and BPP overlooked the lowest bidder, a deviation from the BPP law.
Aisuebeogun stated that the duration of the project was 24 months, noting that the project would be funded from N4 billion appropriated by the National Assembly last year while another N13 billion would be sourced from this year’s budget which had already been approved while $68 million would come from the Bilateral Air Services Agreement (BASA) fund and the balance from 2011 budget.
The BASA fund was money generated for Nigeria through the liquidated Nigeria Airways from commercial agreements it had with the foreign airlines. The fund is in the custody of the Nigerian Civil Aviation Authority (NCAA).
The committee said it was illegal for the BPP to tamper with the BASA fund that was not appropriated in the budget and could not have been seen as part of the funding for the project.
According to the FAAN boss: “It is very expedient to construct second runway for Abuja and the runway needs urgent repairs because of critical nature of safety.”
On why FAAN refused to engage its engineers in the project but consultants whose prices were inflated, the FAAN team disclosed that the total in-house costing for the project was N36 billion based on the bill of quantity submitted to the contractor with a sample of the project.
“We gave them a bill document that will guide the consultants and the contractor on the type of project we want”, they added.
The panel was stunned when FAAN Director of Engineering, Dunuma said the agency was yet to visit the site of the project, which was supposed to be its priority. Amadi asked if it was proper for an agency that was supposed to oversee an important project like that not to visit such project site?
The panel chief said it was unacceptable that FAAN Directorate of Engineering had not shown desired competence to put any template on the table and did not develop it, accusing them of not laying the proposal for which the companies were asked to work on.
Members of the committee questioned the competence of the contractors that were asked to bid, considering the fact that none of them had track record of building runways anywhere in the world.
Reading through some documents, Amadi queried why FAAN awarded airfield lighting for the runway to Julius Berger at N11 billion.
Amadi said: “From the beginning, FAAN made up their mind to give the job to Julius Berger and you wonder why the hurry to award this contract. They should tell us why they wanted Julius Berger at all cost and they should tell us what they are hiding. The disclosure from the Director of Engineering of FAAN that they did not visit the site shows that he is not competent for this position he is holding.”
A lawmaker, Dino Melaye, who moved a motion for the hearing said: “As I speak to you, I can say on good authority that this is one of the highest monumental fraud that has taken place in the Federal Republic of Nigeria. It is very unrealistic, it is satanic, it is wicked, it is a rape on the masses of this country.”
He said a comparative analysis with Akwa Ibom Airport runway showed that the contract was inflated. “As I speak to you, their runway in Abuja is to cost N63.5 billion as proposed by Julius Berger. While the Akwa Ibom runway with better facilities cost N13.6 billion. The length of the Abuja runway is 4.2 kilometres. The length of that of Akwa Ibom is also 4.2 kilometres.”
Some members of the committee called for the revocation of the contract in view of what they described as “abuse of due process in its award.”
At 4.10 p.m., the immediate past Minister of Aviation, Babatunde Omotoba, was called to the front row and put on oath. He said he would not be worried if the National Assembly decides to review the contract, adding that he would have thought otherwise if he had not listened to divergent views from members of the committee.
He admitted that a lot of errors could have been made not because the people saddled with the responsibility wanted to shortchange the country.
While responding to queries on the award of the contract, the former minister who supervised the conception, process and award of the project, told the committee that the ministry embarked on the project “in its effort to ensure that the construction of the second runway is fast tracked based on distress on the current runway and its effect on political and economy if Abuja runway is closed down.”
He explained that FAAN requested from BPP to allow a selective tendering of “Engineering Procurement and Construction (EPC)” and that the ministry’s responsibility was to ensure that due process was followed from the beginning to the end.
Omotoba affirmed that BPP after the review of the process, communicated the delisting of two companies from the six companies short-listed by FAAN via a letter to the Ministry of Aviation and that only four companies are currently mobilized to work in Abuja and BPP added Arab Contractor as well as Dantata and Sawoe after which FAAN sent a sample of the bid document to BPP and we got the certificate of no-objection.
“Later around September, FAAN informed that PW submitted a proposal of about N30 billion and Julius Berger at the sum of N83 billion but learnt later that PW did not meet the requirement on the execution of the project.”
Omotoba who also expressed dismay over the N83 billion quoted by Julius Berger directed FAAN to give comparable cost of construction from international airports across the world.
On his part, Emeka Eze, BPP Director-General, disclosed that the classical option which was adopted by the bureau was based on the request of the Aviation Ministry, which did not require advertisement in the national dailies in line with Clauses 40, 42 and 43 since government was in a hurry to execute the project.
Senior Special Assistant to the President on Aviation, Captain Shehu Iyal, said the runway and the cost for the airport was justifiable, adding that his responsibility goes beyond runway, but safety of the sector.