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Exposed! How MDAs, Contractors Defraud Govt

Bureau For Public Procurement Has Blown The Lid Off Discreet Plots Used By MDAs In Connivance With Contractors, To Defraud Government As Nerc Boss Blames Corruption For Power Sector Failures

The Bureau for Public Procurement (BPP) yesterday, at the ongoing annual conference of the Nigerian Bar Association (NBA), opened up on how heads of Ministries, Departments and Agencies of government, popularly tagged MDAs, connive with contractors to loot the nation’s financial resources.

Director General of the Bureau, Mr. Emeka Ezeh, who made the disclosure, however, stated that due to the adherence by the Bureau to due diligence principles in award of contracts, the Federal Government was saved the sum of N659 billion, which would have been lost to dubious contractors, between 2009 and 2014. Ezeh, while speaking on the topic “Ending the Scourge of Abandoned Projects in Nigeria” also outlined the roles BPP plays in project development, adding that “such savings were made possible through the Bureau’s prior reviews of contracts awarded”.

He revealed that such resource hemorrhage in the public sector was often made possible by high level connivance of heads of MDAs with the contractors to plunder the nation’s resources, especially through low-value contracts. As he spoke, Chairman, Nigerian Electricity Regulatory Commission (NERC) Dr. Sam Amadi, also identified corruption and poor budgeting as the major problems facing the nation’s electricity sector.

Ezeh listed “contract splitting especially for low-value contracts” as well as “the use of fake documents by bidders” with active connivance of public office holders in the MDAs, as ways in which the country was defrauded. Ezeh also listed “multiple ownership of companies” by bidders, who, working in active connivance with MDA officials, present multiple bids using the fake companies to win government contracts.

While charging members of the judiciary to support current efforts by President Muhammadu Buhari to tackle corruption, Ezeh also blamed “long delays in investigation and prosecution of cases” as some of the reasons corruption persists in Nigeria.

He declared that the BPP had over the years worked hard to improve capacity gaps in the MDAs and contractors, even as he also called for reduction in the period for paying contractors as such long delays in payments for jobs duly certified had the tendency to reduce efficiency on the side of the contractors. Ezeh used the forum to draw attention of government to the disturbing trend involving the withdrawal of multinational construction companies working in Nigeria, following the nation’s dwindling resources.

He noted that construction firms, which used to handle huge construction projects in Nigeria, were now shrinking or closing operation, resulting in the few capable international companies being “overburdened with many jobs with its attendant possibility of collusion”. Mr. Ezeh noted that the Bureau successfully resolved a total of 365 out of 557 complaints it received from contractors also during the period.

He listed the abandoned projects to include both those for huge infrastructure and small contracts in different parts of the country embarked upon by different tiers of government. Meanwhile, Chairman, Nigerian Electricity Regulatory Commission (NERC) Dr. Sam Amadi, yesterday identified corruption and poor budgeting as the major problems facing the nation’s electricity sector.

Amadi made the declaration at the opening of two-day meeting of NERC and Industry Performance Management Officers of Generation and Transmission Company of Nigeria (TCN). The UNION reports that the meeting was organised by NERC to present a template for effective project management to the electricity industry performance management officers in Abuja. Amadi, who noted that prior to 2010, the sector suffered the problem of modeling, however, observed that the sector had been bedeviled by project management problem from 2010 to date.

He stated that the problem was mostly caused by corruption, adding that inefficient budget circle had made it difficult for effective delivery of projects within a target time frame in the sector. According to the NERC boss, by now Nigeria would have hit about 9,000 megawatts (mw), if all the Nigerian Independent Power Projects (NIPP) were completed and the capacities of existing electricity generation companies recovered. “Today, the real problem of this sector is performance management. We have moved from modeling.

We have set a fairly good enough model that will allow us to create sustainable electricity. “The problem is poor project management. It includes corruption, which is the beginning because, if you mis-procure, if you award contracts to those, who cannot deliver, there is no magic. So, it is not a NERC problem. It is a problem of delivery. “If we had delivered all the NIPP projects, recovered all the capacity of existing electricity generation companies, we would have been doing over 8,000mw or 9,000mw today.

So, the problem of the electricity sector is, we need to develop the skills, project and deliver. “Some of them are budget circle, think about the Transmission Company of Nigeria. TCN gives a bill of N50 billion, government appropriates N30 billion and release N10 billion. There is nowhere in the world, where projects can be completed with that kind of budgeting circle. So, what we are trying to do in our own little way, as regulators, is to, in this meeting, put our finger on why are we not executing efficiently and effectively,” he said.

Amadi said that the meeting would provide the opportunity to present the performance management officials a template designed by NERC in collaboration with a consultant.

He added that the template would enable the performance management officers to learn how to deliver on projects in good time. “This meeting is for us to meet with our stakeholders to show them the template we have designed with consultants to enable them deliver on time and effectively. We want to increase our capacity.

There is a possibility of ending this year with over 6,000mw, or close to that,” he added. On fixed charge, Amadi clarified that: “fixed charge has not been removed. A regulator does not remove something by executive fiat. It has to go through a process”.

In his welcome address, the Commissioner, Market Competition and Safety, Engr. Abba Ibrahim, noted that there has been improvement in electricity supply. Ibrahim, however, urged the officers to ensure that free governor control device is in good working order to ensure good management of the overall frequency and voltage quality of electricity in the country.


-Tony Ailemen and Teddy Nwanunobi, Abuja

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