Obasanjo Awarded NIPP Contracts Without Tenders Board, Says MD

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Saturday, March 15, 2008              

Obasanjo Awarded NIPP Contracts Without Tenders Board, Says MD
From John Abba-Ogbodo, Abuja

THE panel of the House of Representatives investigating expenditure made in the power sector between 1999 and 2007 was stunned yesterday when the Managing Director of the National Integrated Power Project (NIPP), James Olotu disclosed that former President Olusegun Obasanjo awarded some contracts under the programme without recourse to tender’s board at the federal level.

The managing director who said NIPP was not a legal entity and needed repositioning also disclosed that so far, the outfit had opened letters of credit worth$1.46billion and another component of about _224,600.24 million for the different contracts being handled under the programme. He added that the total sum of $414, 944, 42.08 million and _30, 119,117.77 had been drawn for the offshore components.

The panel expressed concern over the sum of N84 billion paid one of the engineering firms handling some contracts, Rockson Engineering Limited for the jobs being handled, mentioning in particular, the N15.8billion paid in respect of Egbema power project out of the total cost of N16. 67billion. The panel was worried that about 90 per cent of the payment had been made whereas the job done so far was not more than 19 per cent.

The chairman of the company Senator Anietie Okon, however, disagreed with the panel, saying that the company, in order to ensure speedy completion of the contract had to go out of its way to take a credit facility of about $80 million from Intercontinental Bank Plc.

The panel also received information about another project being handled by Rockson at Gbarain, Bayelsa State. Olotu told the panel that the sum of N17.6 billion had been paid out of the contract amount of N18.25 billion for the local component. The company, according to NIPP, had so far drawn $84 million from the offshore component of the contract.

The NIPP boss also said only 11 per cent of work had been done but Senator Okon insisted that 50 per cent had been done. He pleaded with the committee to visit the sites and see things for themselves. At this point, a member of the panel from Bayelsa, Donald Egberebin raised an objection that not much work had been done and faulted the position of the contractor that the place was waterlogged.

Olotu maintained that he did not know how payments were being made since he was not involved. “We don’t have control over payment. Projects management funds are not paid to the NIPP. As the MD we don’t maintain an account with the CBN,” he disclosed.

“The Chairman of the Steering Committee releases the funds and then it was Senator Liyel Imoke. Now it is the Minister for Energy (Power) that approves. I don’t have the power to do that. If my office was not side-tracked, there would have been an improvement. It has to do with the abuse of due process. For instance, I am the MD but the Director of Technical Services Mr C.N.O. Nwachukwu who is the chairman, technical, approves and sends to the committee,” he said.

When confronted with the issue of letters of credit and the contractors who benefited, Olotu listed them as follows:

General Electric for supply, $196million;

Marubeni $49.935million; Marubeni $40,321,527 million; Marubeni $16,318.3 million; General Electric $19, 622.96 million; Rockson Engineering $13,494,753.93 million; and Rockson Engineering $13,999.249.95 million; Rockson Engineering $16,718,34.93 million; Rockson Engineering $16,7450 million; North China Electric Company $20,373.84 million; Okwagu International $70 million; Pivot $4,35; Pivot $108,959.9.8 million and

Steers engineering $138,983.89 million;

He went further to list some of the contractors who had drawn down to include Matarik _11, 955.08 million; Energo Nigeria _6,471,558 million; SeltaSpar _5,383,667; Pivot _620,327.8; and Barbak _6,297,49

He pointed out that there were some fundamental problems with the operation of the NIPP, saying: “There are fundamental concepts that surround the NIPP. It’s from the sourcing of the funds by the three tiers of government. We have not fashioned out a management standard to solve the problem.

The NIPP is a conglomeration of experts borrowed to form a unit. Nigerians who are supposed to monitor and take over from the experts are not there. We need to employ and deploy the Nigerians to take over from the expatriates.”

He said that former President Obasanjo influenced some of the contracts given to Rockson and when asked whether it was the proper action, he said: “Former President Obasanjo was the one who said the job should be given to Rockson.” When he was asked whether it was proper, he said:” “It did not go through federal tender’s board.”

When further asked whether proper things were done at the NIPP, he answered: “There were some things that I could have done differently.”

The panel yesterday directed the Central Bank Governor, Prof. Chukwuma Soludo, to appear on Monday having absented from today’s proceeding. The directive was given after the House turned back the deputy director of operations in the bank, Alhaji Suleiman, who appeared for the governor.



OBJ Aided Chinese Firm To Loot N116b

Idowu Samuel and Bola Badmus, Abuja – 15.03.2008

AS part of its excesses in the award of contracts for National Integrated Power Project, the government of former President Olusegun Obasanjo awarded a contract sum worth N116 billion to two Chinese companies without bothering to monitor the process of execution.

The contracts involved were for Power Plant Projects at Papalanto in Ogun State and Omotosho Power Station in Ondo State. The assessment of the two contracts by the NIPP were put at almost zero level execution.

One of the Chinese companies, CEPCO, was awarded the contract for the Papalanto Power Station for N58,477,350,000 and was indeed overpaid to the tune of N437 million, where as the company was never challenged to execute the contract within a specified time frame.

The other Chinese company took up the contract for the building of Omotosho Power Station for the sum of N58 billion and equally did not measure up to 10 per cent performance as stated by the Managing Director of NIPP, Mr A Olotu.

An enraged Chairman of the House of Representatives Panel probing the misappro-priation of the sum of $13.28 billion reportedly sunk into the power sector between 1999 and 2007 had to summon the chairmen of the two Chinese companies, who were said to be in China.

He had refused to allow representatives of the companies to testify before his probe panel on account that the huge amount of the contracts necessitated that only the chairmen who signed for them could shed light on why the processes of execution were stalled.

Meanwhile, the Governor of Lagos State, Mr. Babatunde Fasola, who also appeared before the probe panel lamented what he called the unlawful deduction of the sum of N9 billion by the federal government from the statutory allocations due to his state.

Fasola made this known in his briefing to the House on the predicament by the government of Lagos State with its attempt to generate electricity through Independent Power Project (IPP).

According to him, Lagos State, while appreciating the enormity of the problem by the federal government to generate sufficient electricity for Nigeria, took the initiative of engaging the private sector for the purpose of generating electricity for Lagos through IPP.

The government of Lagos, he said, brought in an AES for that purpose and was able to generate about 250 megawatts of electricity, whereas the government was able to mobilise the major industries in the state for the purchase of the megawatts being generated.

He said rather than for the Power Holding of Nigeria to appreciate the initiative by Lagos State by offering support, it failed to dedicate the power being generated to Lagos and all the same decided to be deducting a sum of N225 million from the statutory allocations of the state to make up for the price differentials in the private power generating project.

The amount being deducted from the Lagos State account from 2001 till date, according to Fasola, has increased to N9billion.

Fasola, however, urged the National Assembly to encourage the executive arm of government to involve more private sector participation in the power sector in Nigeria, as he also canvassed for acceleration of Privatisation


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