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N87bn fraud rocks construction of Okerenkoko Maritime University

As Senate Panel Sustains Indictment Report

By Henry Umoru, Abuja, Ejiro Idanigho, Asaba

THE construction of Maritime University, Okerenkoko, Delta State, has been hit with an N87 billion fraud, as officials of Nigerian Maritime Administration and Safety Agency (NIMASA) paid for contracts not executed

Consequently, the office of the Auditor General of the Federation, not comfortable with the fraud following the construction of the University, recommended some of the officials of NIMASA for Investigation by the Economic and Financial Crimes Commission (EFCC).

Series of invitations extended to the leadership of NIMASA by Senator Matthew Urhoghide (PDP, Edo South) led Senate Committee on Public Accounts to defend the 2015 indictment report of the Auditor General were not honoured by the agency.

Angered by the action of NIMASA officials, Senator Urhoghide’s Committee then sustained the query which will be presented to Senate at plenary for consideration.

Among the contracts, not executed, which the agency paid for are the construction of ship-building facility and dockyard, maritime equipment and structure, and ancillary buildings at Okerenkoko, Delta State, awarded to a company at N40.2 billion;

Construction of access roads, internal road network and drainage (work package B) at Nigerian Maritime University, Okerenkoko, awarded on January 7, 2014, to a company at N11.1 billion, with a completion period of 18 months and another N36 billion contracts.

Others are: construction of Administrative Blocks A1, N836,026,170.00 (15% foundation level); lecture rooms A2, N1,729,854,640.00(0%); Vice Chancellor’s lodge and staff quarters A3, at N11,711,090,610.00 (0%); students’ hostels, A4, M (0%); power house/power sub-station, A12, N151,445,250.00(15%, at foundation level); perimeter fence, A13, N446,066,550.00(0%); jetty and ramp A18 N808,091,100.00 (5%, bush cleared); provision and electricity services and connection of the University to the National Grid A19, among others.

The total package for the contracts was N36 billion.

The query read: “The package was awarded at a total contract price of N36,839,747,931.00. The tendering process was found to be selective, in that the award of contract was based on a recommendation letter jointly signed by leaders of Okerenkoko Federated Community, Gbaramatu Kingdom and Warri South-West Local Government Area in favour of the two preferred companies.

“It was observed that the sum of N5.5 billion had been paid vide PV. No. ZIB/EP/0358/14 of 16/04/14.

“During site inspection carried out on 30/7/15, it was observed, among others, that apart from the gatehouse, which had attained 70% completion, most of the jobs were still at foundation level.

“Project inspection visits undertaken by staff were generally misleading, as the reports submitted were not true reflection of the activities on ground.

“It was gathered that some of the staff collude with the contractors to submit false progress reports on the project.

“The Director-General has been requested to justify the selective tendering process adopted in the award of this contract.

“Show evidence and justify in concrete terms, the commitment of the mobilisation fee to project execution, contrary to what was met on ground during physical verification.

“In line with Financial Regulation 3104(i) to recover and refund to treasury, the sum of N5,525,962,189.65 being irregular payment, furnishing recovery particulars for verification.”

Another query over the Maritime University fraud read: “The contract for the construction of ship building facility and dockyard, maritime equipment and structure, ancillary buildings at Okerenkoko, Delta State, was awarded to a company at a contract price of N40,243,702,763.38 on November 12, 2013 with a completion period of 36 months.

“Relevant documents such as letter of award and contract file were not made available during the audit despite repeated demands.

“As a result, I cannot confirm that due process was followed in the award of this contract. It was claimed that ‘there was a presidential approval’ for the project.

“However, presidential approval does not suffice for a Federal Executive Council (FEC) approval or Bureau for Public Procurement (BPP) certification.

“The payment profile indicated that on 05/12/13, through PV. No. GTB/EP/13/0905, the sum of N6 billion was paid as mobilisation fees.

“Meanwhile, as at the time of audit visit in July 2015, though the contractor was on site, there were no structural, mechanical, electrical or ancillary buildings on site.

“The contractor explained that their fabrications are being done outside Nigeria and letters of credit have also been opened for the fabrication of the equipment for the dockyard abroad. This claim could not be authenticated at NIMASA.

“The inability to sight the BOQ and contract file made it impossible to ascertain the project content and confirm adherence to the execution of this project.

“The Director-General has been requested to: give reasons for not presenting the relevant documents relating to this project namely, letter of award, contract file and BOQ, for audit examination;

“Show evidence of compliance with due process in the award of the contract by producing the FEC approval and BPP certification, for audit scrutiny.

“Show evidence and justify in concrete terms, the commitment of the mobilisation fee to project execution, contrary to what was met on the ground during physical verification;

“In line with Financial Regulation 3104(i), recover and refund to the treasury, the sum of N6 billion being irregular payment, furnishing recovery particulars for verification.

“The contracts for the clearing of bush of 20 & 30 hectares of land at the shipbuilding and dockyard, Okerenkoko, Warri, were awarded to two different companies at contract sums of N160,523,900.00 and N221,542,418.00, and in utter disregard to extant regulations, which prescribe graduated payments beginning with mobilisation, the Agency paid the contractors at once through P.V. No. UBA/EP/13/0552 of 13/6/13 and GTB/NIMASA/ EP/13/0704, respectively.

“The payment vouchers which did not pass through normal checking processes were devoid of job completion certificates and other relevant attachments required for a valid payment voucher.

“During an audit inspection visit to Okerenkoko, Warri, on July 30, 2015, contractors on site confirmed that there was no bush clearing at all and that each contractor cleared the bushes on their own project sites.

“This transaction is a clear cut infraction of Financial Regulation 3104 (iii) which states that a public officer who fraudulently pays money to a contractor for a job not executed shall be required to refund in full the amount wrongly paid and shall be removed from that schedule and the matter referred to the Economic and Financial Crimes Commission (EFCC) for prosecution’.

“The Director-General has been requested to explain the rationale behind operating at variance with government policy by making payments for these contracts once without the prescribed graduation of payments;

“Produce for audit scrutiny, all relevant documents relating to the award and execution of these contracts with concrete evidence of recourse to due process in the award of the contract and job completion certificates authenticated by site engineers.

“Recover and refund to the treasury, the sums of N160.5 million and N221.5 million, totaling N382 million being payment for un-executed contracts, furnishing recovery particulars for verification,” the query over Maritime University fraud added.

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