The inspection tour of power plants under the National Integrated Power Projects (NIPP) by the House Committee on Power began yesterday with an avalanche of revelations on the controversial project.
The tour took members of the committee to several distribution and transmission stations in Akwa Ibom State.
The 54-man team from the House and Power Holding Company of Nigeria (PHCN) expressed shock as most of the contractors had nothing to show for the huge sums of money they have so far received.
One of the contractors, the committee was told, only visited the project site for the first time about three weeks ago.
The project consultant, Colenco, led by an engineer, Z. Domelenchi, admitted to the lawmakers that actual work on the civil structures of the contract started three weeks ago while he had only been to the site thrice for a contract that was supposed to have been completed last year.
Colenco, in trying to justify the volume of work done so far, explained that the contractor could not mobilise workers and materials to the site on time due to disagreements among the three communities that share ownership of the parcel of land and their demand for unpaid compensation which was not built into the contract.
Receiving the committee in his office yesterday, the Governor of Akwa Ibom State, Obong Godswill Akpabio, said contractors found wanting should not go unpunished.
THISDAY is also in possession of documents which show that the Budget Monitoring and Price Intelligence Unit (BMPIU), better known as the Due Process Office, recommended the issuance of Due Process Certificates for payment in addition to the Due Process Certificates for award of contracts for power projects during the tenure of former president, Chief Olusegun Obasanjo.
While on inspection of the New Haven distribution and transmission substation located at Ikot Una near Ikot Ikpene yesterday, the parliamentarians were, yet again, shocked to discover that the contractor had nothing to show for the contract for which he had already claimed over N17 billion.
When the team visited the site, the only thing that showed any semblance of work was the excavation, apart from a fencing done of the project site which has already been completed.
Domenclechi explained that the contractor, Payma Bargh Co/Cartlark International Limited, had procured all the engineering equipment for the switching sub-station.
He took the members round the warehouse which was provided to them by Una Ma Paper Industries for a fee of N500,000, saying that 30 more containers have been lying at Onne Port in Rivers State awaiting clearance, pending when the civil works and transmission lines would be completed.
The Managing Director of the company, Mrs Mariam Akanmode who spoke to THISDAY on phone from Abuja yesterday, however explained that though equipment had been procured, the company had problems resettling the communities while nothing much could be done because the other contactors involved with the transmission and distribution lines had not done any work which is supposed to precede the designs, taking into consideration the position of the lines and distribution materials.
She said: “We have all the equipment, but you may wish to understand that there are other contracts that will surely affect our completion. The transmission lines and the distribution angle must be completed so that we can position the equipment properly and also make room for expansion when necessary.”
But the communities quarrelled among themselves over the compensation as they told the delegation that they could not say how much was actually voted for the compensation. The Village Head, Chief Joshua Essiet, said it was sad that nothing much had been done since last year when the company moved in equipment and procured the parts for the projects.
The sub station is estimated to cost the federal government N5.96 billion but the contractor has so far been paid N4.5 billion.
Energo, the company that was awarded the Ikot Ekpene-New Haven (Ugwauoju) 330KV, Eket Uyo 132KV and Ikot-Ekpene transmission lines worth N19bn – out of which – N13 billion has so far been disbursed, had virtually nothing to show for the money.
The completion of their job will affect the switching sub station as they have to rely on the lines to switch on.
But that was not the last shocking experience for the 54-man delegation. When they visited the Rural Electrification Project, awarded at a cost of N40 million, they discovered that it was yet to take off two years after.
It was the same story at the N1.78 billion 2×75 MVA injection sub station at Abak, where the controversial Laymeher of Germany (project design consultants) and Steag Encotech (project consultants) have their sites.
The contractors, Benbok Engineering Limited, based in Abuja, have so far collected the sum of N278 million but the Committee noted that only the fencing of the one-and-a-half plot of land donated by the local government has been completed while they hurriedly brought in a Mikano Generating set and tried using manual labour to push it into the gate house built for that purpose, perhaps to create a picture of activity.
At the PHCN Uyo Business District office, it was a shocker of a different kind. The House committee discovered that the impromptu visit merely exposed the Accountant, Mr. Philips Ike, who could not provide vouchers for the payment of staff salaries or explain where the funds received by the District were lodged.
He was subsequently asked to appear before the House when the Committee returns to Abuja for the final part of its investigation.
The Akwa Ibom State Governor however told the committee that the vital role being played by the committee would stabilise the polity.
Akpabio, who flew in from Enugu to receive the House, said the outcome of the probe would show the integrity of the House while he insisted that otherwise nothing tangible can take place in the form of industrialisation.
Meanwhile, THISDAY has discovered that contrary to what its Director General, Mr Emeka Eze, told the House committee, the Due Process Office actually approved payment certificates for contracts for the NIPP projects.
Eze had claimed during his appearance before the House Committee on Power and Steel that the contractors for the power projects did not get Due Process Certificates for payment.
However, a BMPIU Due Process Review Report for EPC contracts (transmission lines and associated substations) listed 10 companies handling several power projects under the NIPP totaling about N90 billion which the Due Process Office recommended for issuance of Due Process Certificates for payment.
The 10-page report dated December 2005 in its conclusions/suggestions stated: “It was also noted that all the lots have WHT taxes added contrary to statutory provisions on the operations of WHT. Only Value Added Taxes shall be added while companies pay WHT which are chargeable as taxes paid by companies.
“Consequently all WHT taxes as added have been removed. “In consideration of the above comments, BMPIU is inclined to grant Due Process Certification for the award of the various lots as follows:
“Due Process Certificate for award in the various sums against the contractors as in the BMPIU column for lots 1-10 can be granted. Also, Due Process Certificates for payment can also be granted since bulk of the money will be needed to fund Letters of Credit that will need to be opened for the manufacture of the said equipment.”
The Due Review Report authored by Prof. Kunle Ade Wahab, Special Adviser to former President Obasanjo and Head, BMPIU, Ms. Bimbola Ogunseitan, SSA to former President Obasanjo and member BMPIU and Mr. Tajudeen Oyawoye, SA to former President Obasanjo and member BMPIU and bearing number MI/DPR/EME /REPORT/ 2005/275 made the following findings:
“The bidding period is adequate; the prequalification criteria used for prequalification of the contractors are agreeable to BMPIU; disqualification of non-responsive bidders is in order and the rates for works included by the recommended contractors are most reasonable and found to be much lower that (sic) rates used in procuring transmission lines in 2001. However, the report observed that there is inconsistency on the basis for the recommendations.
“If time was of very essence as we believe it is, then no company should be awarded more than one lot, otherwise the basis for not allowing Energo to have the two lots it emerged the winner would be brought to question as the RFP did not put conditions on eligibility for two lots as the Ministries tried to canvass in the evaluation report.”
Also, another Due Process Review Report dated January 2006 for the Niger Delta Medium Sized Power Plants EPC BOP Contract for Power Plants recommended Due Process certificates for the seven power plants located in the Niger Delta.
The report bearing number BMPI/DPR/AEA/REPORT/2005/305 stated that “Due Process Certificates for Awards and Payments may be granted as requested by FMP&S based on the reasons in paragraphs 3.9.16 and 3.9.17…” in favour of the firms and at the price approved by BMPIU.
Paragraph 3.9.16 referred to above states: “It is noted that Rockson Engineering is mobilised in Nigeria and is presently executing similar projects. Marubeni built Egbin Power station, a steam turbine plant and the biggest power plant in Nigeria. The need to quickly execute the project on a fast phase basis informed FMP&S in insisting after BMPIU findings, on awarding the projects…taking into cognisance the ability of the two contractors to deploy resources quickly and having a recent working knowledge of the terrain.”
The contracts for the power plants which BMPIU recommended Due Process Certificates for payments include Marubeni Engineering (West Africa) Limited for Calabar, Eyaen and Sapele at the values of N20,346,452,235.00, N15,329,511,485.00 and N16,291,680,715.00 respectively. Others are Rockson Engineering/Burns McDonnel for Egbema and Gbarain Ubie at the values of N17,329,511,485.00 and N18,721,141,497.00 respectively. The total contract value of the power plants Balance of Plant Projects (BOP) is N88,131,991,647.0
Yesterday, former Minister of Finance, Mrs. Nenadi Esther Usman, expressed dismay at the allegation that she refused to honour an invitation extended to her to appear before the House Committee on Power.
Usman, in a letter to the Chairman of the Committee dated March 28, 2008 and copied to President Umaru Musa Yar’Adua, Senate President, Speaker of the House of Representative, Kaduna State Governor and Chairman of the Peoples Democratic Party (PDP) denied any knowledge of an invitation or receipt of any invitation either in writing or verbally to appear before the Committee.
Usman expressed her willingness to appear before the House to testify any time the Committee deems it necessary to invite her, noting that she has nothing to hide on account of her many years of public office.
Paul Ibe, Stanley Nkwazema and George Orji
This Day
1st April 2008
