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Nigeria: House panel recommends probe of Obasanjo, Imoke, Agagu

The House of Representattives Commmittee on Power that investigated Power projects awarded during the 8 year tenure of former President Olusegun Obasanjo has recommended the prosecution of former President Obasanjo, current Cross River state Governor Liyel Imoke, former Governor of Ondo State, Olusegun Agagu; the former Managing Director of the Power Holding Company of Nigeria Joseph Makoju; a former Minister of Energy, Abdulhamid Ahmed; and NIPP officials for alleged complicity in the award of ‘ghost projects’ under the power project.

Obasanjo: recommended for probe

According to a 297 page report that will be presented for debate this week in Nigeria’s House of Representative’s, Nigeria ost almost N242.6billion  in the execution of the $13billion [N1.95trillion] power projects during the administration of former President Olusegun Obasanjo.

Citing many of the contracts awarded by the Obasanjo administration as ‘ghost projects,’ the committee asked that the Economic and Financial Crimes Commission [EFCC] begin a probe on two contracting firms handling independent power projects located in Kwara State which it claimed were nonexistent. These are the 132KV Bay Extension contract awarded to Payma Bargh and Catlark Limited; and the Ganmo to Ogbomosho Transmission Line awarded to CCC International.

Another project in Damaturu, Yobe State, according to the committee, was duplicated by the authorities in charge of the independent power projects executed by the Obasanjo regime.
The NIPP awarded the 150MVA, 330/132KV and 60MVA, 132/33KV Transmission Substation at Damaturu to Parsian High Voltage Development Company and Cartlark International for N1.487billion, but the committee found to its surprise that the NIPP again re-awarded the same project to the same company for N5.747billion.
The report documented how power projects were routinely inflated and over-invoiced like the New Haven-Ikot Ekpene 2x330KV Double Circuit Line which it claimed was “over-scoped by 49 per cent whilst the Afam-Ikot-Ekpene 330KV line was over-scope by more than 100 per cent”.
“NIPP Distribution EPC contracts were awarded at costs averaging about 10 times the norm when compared to PHCN contract costs for similar projects in the past five years. This 1000% cost inflation of the contract translates to an aggregate overpricing of over N50billion” the report chillingly asserted.
It added: “A clear example of project cost inflation is the proposed supply of nine General Electric [GE] Frame 9 gas turbines and auxiliaries at the cost of N185 billion ($1.55 billion) awarded to Rockson International.
“In comparison, it is noteworthy that GE supplied 18 No. turbines of similar specification previously at about $404million, including cost of technical assistance services and Long-Term Service Agreement (LTSA). The implicit cost inflation on the 9 No. additional turbines and associated services exceeds $1.145billion.
“Another example is the costing of the so-called change-order provisions for Alaoji Power Plant (Phase 1) at a highly questionable amount of $123million. NIPP contracts were not only overpriced in comparison with PHCN contracts, they were also wide off the mark when viewed against comparable power stations in several parts of the world” the Committee suggested in its report that is certain to generate a lot of heat in the polity.
The committee then asked the EFCC and the Independent Corrupt Practices and other Related Offences Commission to investigate 17 power contracting firms over alleged corrupt practices in the handling of some Independent Power Projects in some parts of the country.

Companies indicted

Top on the list of the affected companies are Rockson Engineering, owned by Joseph Arumeni-Johnson, also the owner of Arik Air, and Chrome Consortium Energy, belonging to multi-billionaire businessman, Emeka Offor.
Also recommended for trial are Pivot Engineering; Marubeni International; Marubeni International; Lahmeyer International; ABB Powerlines; Energo Nigeria Limited; IOEC/Kaztec Consortium; Cartlark International; KEC/News Engineering; Hoquado Nigeria Limited; Santon Energy; Union Allied Engineering; Mogabs; Atlantic Engineering; Harlesden Engineering and Charnel Engineering.
The committee wants Rockson probed with a view to recovering huge sums allegedly received fraudulently on some of the power projects it is executing. The company is handling the construction of the Alaoji, Omoku, Egbema and Gbarain-ubie power plants. But as far as the House committee is concerned, the firm has exhibited “incompetence, lack of execution capacity and poor performance”.
While Pivot was accused of having received unreasonably high sums for the contracts awarded to it, Marubeni allegedly received payments for contracts not executed. Lahmeyer, the committee said, indulged in “complicity in tender manipulation, negligence or complicity in over-scoping as well as overpricing of NIPP projects, abuse of due process, certification of invoices for payments for works not yet done by contractors.
“The company has already been black-listed by the World Bank. It should henceforth be blacklisted by the Nigerian Government,” the panel added.
ABB Powerlines, Energo and Chrome, IOEC/Kaztec, Cartlark, KEC/News Engineering were slammed for receiving huge sums for work not done while Hoquado was said to have “received contract sums in excess of $10million since March 2006 and refused to carry out its contract on the excuse that the community land owners claimed compensation of N18 million when interest it earned on the $10million it received would be about $2million (N240million).
“The company displayed disgusting lack of diligence in prosecuting its contracts and was apparently enjoying the excuse so as to collect more money and receive interest on dollar payments while ignoring to perform the contract, thereby leading to worsening of the power problem in Nigeria.”
Santon Energy, Union Allied Engineering, Mogabs, Atlantic Engineering, Channel Engineering and Harlesden Engineering, according to the panel, are to be investigated for non-performance of projects for which they had been paid.
The House committee had in 2008 embarked on a probe of the power projects after it realized that the huge the about $13billion expended on the power sector by the Obasanjo regime did not translate to an improvement in electricity supply in the country.
After visiting project sites across the country and holding a public hearing where contractors and other stakeholders in the power sector testified, the committee submitted its report to the leadership of the House in July 2008.
Written with reports from: