Jonathan awards N927bn contracts in 10 months •Niger Delta grabs N246bn

President Goodluck Ebele Jonathan

President Goodluck Jonathan has awarded contracts worth N927bn in ten months of his 13 months presidency, a SUNDAY PUNCH investigation has revealed.

The contract figures are contained in a document entitled: Federal Executive Council Approved Contract, exclusively obtained in Abuja, that details contract awards within the period under investigation.

A rash of contract awards in the past, especially during the eight-year presidency of Chief Olusegun Obasanjo, culminated in the execution of 11,886 projects across the country, most of which were declared abandoned by a presidential panel, headed by Alhaji Ibrahim Bunu in 2011.

Findings showed that the N927bn contracts were awarded by the Federal Executive Council between August 10, 2011 and June 13, 2012.

In February, the Senate had questioned the legality of contracts awarded by Federal Executive Council.

According to the upper legislative chambers, FEC’s action was “sheer illegality” as it usurped the powers of the National Council on Public Procurement, established by an Act in 2007.

Deeply concerned about abandoned projects, scarcity of funds, contract abuses by Ministries, Departments and Agencies, the Director-General, Budget Office of the Federation, Dr. Bright Okogu, hinted two weeks ago that new projects might be outlawed in the 2013 budget.

An analysis of Jonathan administration’s contracts revealed that N470bn worth of contracts was awarded in November 2011, the highest in any given month.

Other 2011 contracts were the N10.76bn awarded in August 2011; September had N72.89bn; October N94.97bn; and December N128.34bn.

In 2012, January contract award was N27.23bn; February N16.62bn, April N74.47bn, and May N30.40bn.

Of the total contracts awarded, the Ministry of Niger Delta Affairs with a contract of about N246bn got a huge chunk of the amount.

The N246bn contract, awarded to Setraco Nigeria Limited on August 10 2011, has 28 months completion period.

According to the document, the contract is meant for the construction of sections 1 and 2 of the East-West road spanning Warri, Rivers and Bayelsa.

Similarly, the Ministry of Works, within the period under review, awarded contracts for three major projects worth N144bn, while the Federal Capital Territory Administration awarded N70.2bn contract.

The N144bn contract is for the dualisation of the Abuja-Lokoja road, which the FEC approved on September 28, and awarded to Dantata and Sawoe and other firms.

Section III of the dualisation of the same road was awarded by FEC on November 23 to two construction firms for N56.8bn.

The firms are Bulletin Construction Limited (N28.5bn) and Gitto Nigeria Limited (N31.09bn).

The Oju/Loko Bridge project in Nassarawa State, which cost N36bn, was awarded to Raynolds Construction. It has a completion period of 48 months.

For the FCTA, the provisions of infrastructure at Kubwa and Karshi would gulp N42bn and N28.2bn respectively.

Both contracts were awarded to SCC Nigeria Limited and had a completion period of 24 months and 20 months respectively.

However, some of these new contracts have raised concerns that deal with funding, capacity of government officials in ensuring the execution of capital projects and delays in execution, which culminate in requests for variations in the contract value.

Bunu in his report had noted, “We take no joy in confirming that there is indeed evidence of large scale, widespread institutional mediocrity, deficiency of vision and a lack of direction in project management, which result in poor conceptualisation, poor design and faulty execution.

“It is needless to add that, this has resulted in avoidable losses of billions of Naira to the Federal Government.”

The Director-General of Bureau of Public Procurement, Mr. Emeka Eze, had declared at a forum in May 2012, that his agency had slashed N313bn from strict verifications of MDAs project proposals, since it was established.

“The sum of N313bn has been saved by the Bureau of Public Procurement for the Federal Government since the implementation of the Public Procurement Act, 2007 began,” Eze said.      

The savings are the difference often evaluated by the BPP between project proposals from MDAs and final approvals from it.

Similarly, Okogu, in an interactive session with members of Civil Society Organisation a fortnight ago, said no new projects would be carried out in 2013 fiscal year, given the high number of ongoing projects, and the N7tn needed to complete them.

He had said, “The fiscal consolidation efforts would be sustained because there is need for prudence in the management of public financial resources.

“Given resource constraints, we have proposed a strategy in allocating capital vote and no new project will be allowed in the 2013 budget.

“Some MDAs with large debts may not receive capital votes as their allocation will be used to pay off their debt.

“There are about 6,300 projects that are presently ongoing nationwide and we need about N7trn to finish these and you really cannot run a fiscal system in this manner.”

This development has also raised concerns in the National Assembly.

The House of Representatives had last month, asked the FG to submit to it a copy of the “the Bunu-led committee report on abandoned projects.”

The lower legislative chambers made the request pursuant to a motion seeking to verify capital projects executed by the MDAs.

Consequently, the House directed the Secretary to the Government of the Federation, Senator Pius Anyim, to produce the report.

According to the House, in spite of “Trillions of Naira” appropriated for capital projects since 1999, there was no evidence that the funds were used judiciously.

It, therefore, directed its standing committees to “provide a detailed report of all ongoing projects of MDAs in their purview in preparation for the 2013 Appropriation Bill” within 60 days.

The Deputy Leader of the House, Mr. Leo Ogor, told SUNDAY PUNCH that the MDAs were “conduits” for siphoning public funds because they hardly implemented capital projects meant to serve the majority of Nigerians.

Besides the parliament, the Citizens Wealth Platform, a group of Non-Governmental Organisation, has faulted the large number of uncompleted projects across the country.

In a memorandum the NGO sent to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, on July 11, it alleged that most of the projects were awarded without detailed designs, and feasibility studies.

The memo, which our correspondent obtained exclusively, read, “Even with the little resources available for capital expenditure, the budget is suffused with thousands of projects, which available resources cannot pay for in the medium term. This has led to so many abandoned and uncompleted projects.

“Projects under the ministry of works clearly illustrate this anomalous situation.

“For 2013, there should be a moratorium on new projects and the focus should be on completing projects that will contribute most to government’s policy of poverty reduction, economic growth and improving industrial capacity utilisation.

“In the past, new projects have been admitted into the budget without detailed designs, drawings, specifications and feasibility studies.

“Votes for construction were included in the budget without acquisition of land or compensation to communities.”