Senate Launches Investigation Into NPA Over Alleged Irregularities In Award Of N7.5bn Contract

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The Senate Committee on Public Accounts has commenced investigation into alleged irregularities in the award of contract for shore erosion control work at Akipelai, Ayakoro and Otuoke in Bayelsa state.

The Committee headed by Senator Matthew Urhoghide based its action on the 2017 Auditor General of the Federation’s report forwarded to the Senate for consideration.

The report states that the erosion control contract was awarded in March 2012 with 14 months completion timeframe by November of the same year, while N4.2 billion had been disbursed to the contractor which marks 56.61 percent of the contract value.

It also noted that the review of quantities (BOGs) revealed that mobilisation fee of N1.1 billion released to the contractor was backed by conditional bank guarantee from Zenith Bank Plc with validity for 365 days which lapsed on the 2nd March, 2013, against the Provision of section 35 ‘1’ of procurement Act 2007 and Financial Regulations 2933 “1” (2009) which only provide for submission of an unconditional bank guarantee or insurance bond.

The report further found out that the sum of N19.5 million was released for Toyota Hilux Double cabin petrol engine while there was no evidence to confirm that these vehicles were purchased.

The Auditor General (AuGF) also observed that N128 million provided for insurance against damages to persons and properties, was certified and paid with no evidence that any insurance was undertaken.

The AuGF query against NPA read in part: “A contract for Shore Erosion Control Works at Akipelai, Ayakoro and Otuoke towns in Bayelsa State was awarded at a contract sum of N7,503,344,599.00, vide award letter Ref. No.: HQ/GME/CP/CON/R.16/067 dated 22nd March, 2012, with 14 months’ completion period. As at 11th November, 2015, four (4) payment certificates and an advance payment totalling N4,247,938,353.26, representing 56.61 per cent of the contract sum, had been paid to the contractor.

“Review of documents and the Bill of Quantities (BOQs) under Bill No. 1 (General) attached to these payments revealed that: Mobilisation fee of N1,125,501,659.85 paid to the contractor, was supported by a conditional bank guarantee from Zenith Bank Plc. with a validity period of 365 days which expired on the 2nd March, 2013, contrary to the provisions of Section 35 ‘1’ ’a’ of the Public Procurement Act, 2007 and Financial Regulations 2933 ’i’ (2009) which only provide for submission of an unconditional bank guarantee or Insurance bond.
“More than four years after expiration of the bank guarantee, the contractor fails to renew it and the balance of unrecovered advance payment stood at N539, 452,959.95.

“The sum of N19, 500,000 was paid for the purchase of three Toyota Hilux double cabin petrol engine vehicles; however, there was no evidence to confirm that these vehicles were purchased. The sum of N13,500,000 was made for annual running cost of the project vehicles, in which N6,750,000.00 was certified and paid to the contractor, but there was no evidence to show what the amount was used for. The sum of N11,250,000 certified for compensation of properties to be affected by the project and paid in Certificate No. 3, had no records on how the money was utilized nor the beneficiaries involved.

“Also, N12,500,000 provided for Community Relations, was certified and paid vide Certificate No. 3 with No supporting documents to validate the payment. N128,000,000 provided for insurance of the works and insurance against damages to persons and properties, was certified and paid through Certificate No. 3 with No evidence that any insurance policy(s) was undertaken.”

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