PORT OF CORRUPTION: This Port Stinks

The Nigeria Ports Authority reeks of Corruption and unwholesome practices.

Seyi Oduyela reports how the Federal government lost N1.3B to over invoicing of contracts that lasted four years (2004-2008) under Obasanjo’s government.

In the eyes of the Nigerian public the Nigerian Ports Authority, NPA, is perceived as a den of corrupt practices. And perhaps this much was well captured in the report of the Economic and financial Crimes Commissions, EFCC-led Special Committee that investigated the activities of the Commission. According to the report, “the Nigerian Ports Authority, NPA is regarded as one of the parastatals where irregularities and malpractices have become deeply entrenched in the management of its affairs. The NPA is widely perceived to be deeply plagued with massive corruption and inefficiency, especially in the award of contracts, which had been characterized by their indiscriminate and unscrupulous nature with little or no regard to financial regulations or due process.”

And like the EFCC report indicated, the Authority is again enmeshed in massive corruption. Our Investigation reveals gross violations of financial regulations, particularly in the area of contract splitting and over inflation of contract costs. As the checks show, out of about 219 contracts that were allegedly awarded between April 2004 and June of 2008 for the purchase of various forms of equipment valued at a total sum of N1, 716, 276, 814:00 about N1, 329, 731, 814 was frittered away through over invoicing. An independent market survey and price analysis however, placed the total contract cost at N344, 482, 000.

Information available to this African Interest shows that a contractor, within the period, MOG Holdings Ltd cornered five contracts valued at N32, 188, 000. Close to MOG are Temilola Temilade Investment Limited and Beenat Enterprises Company Limited which cornered three contracts each valued at N26, 750, 000 and N25, 809, 030 respectively.

Yet, the Authority engaged in indiscriminate splitting of the contracts. Findings show that the contract for the supply of Stromber collapsible standing mobile barrier was split among five companies. Checks showed that on Friday August 5, 2005, a contract was awarded to Donny Ventures through award letter with reference number HQ/ED(MXO) CON/MD677 for the supply of 37 units of Stromber collapsible standing mobile barrier at N8, 177, 000. 17 days after the award, precisely on Monday August 22, 2005 another contract for the supply of the same quantity of the item was awarded to another company for the same amount. This time, it was awarded to New Decade Holdings Ltd with reference number HQ/ED (MXO)CON/MD732. As investigations further revealed, the Authority, twenty-nine days after the second award, on September 21, 2005 Lotus Communications Ltd via an award letter with reference number HQ/ED(MXO)CON/MD/797 bagged a similar contract to supply 36 units of the item for N7, 956, 000. Yet contract for the supply of another 37 units each were awarded to Takie-Way Communications Ltd and U.A Griffith & Company on September 23, 2005 at N8, 177, 000 each. The awards were conveyed via award letters with reference numbers HQ/ED(MXO)CON/MD799 and HQ/ED(MXO)CON/MD698 respectively.

Another area where the Authority engaged in arbitrary splitting of contracts, ostensibly to beat the obstacle of approval limit posed by the financial regulation is in the award of contracts for the supply of High Pressure Oscillating Ground Monitor. This magazine observed that unlike the case of Stromber collapsible standing mobile barrier, Contracts for the supply of High Pressure Oscillating Ground Monitor was split into ten parts and all awarded the same day, May 7 2004 to nine benefiting companies. The companies are Danjuma Kibo & Company Nigeria Ltd, MOG Holdings Nigeria Ltd, Toksben International Investment Ltd and Hope Trust Enterprises.

Others are Kiliz Blessing Enterprises, Anuoluwapo & Company, Faith & Company, Teegee Nigeria Ltd and Martinok International Investment Nigeria Ltd. The nine companies supplied a unit each of the item except MOG Holdings Nigeria Limited which landed two awards. Each contract was awarded at the cost of N2, 405, 000 bringing the total contract cost to N24, 050, 000. Contrary to the contract cost of N2, 405, 000 by NPA, independent survey however indicated that a unit price of the item is in the range of N400, 000. This showed that over N2million was frittered away by the Authority on each of the contracts. (See table).

Similarly, the management of the Authority also robbed the country blind in the award of contracts for the supply of twenty 23.65mm Fixed Spray/Jet Stainless Steel Water/Foam Monitor capable of 30 metres Jetthrow valued at a total of N45, 500, 000. The contract, it was observed split the contract into five parts of four units each and awarded to five different companies. The companies are Adiya Investment Ltd, Rapen Nigeria Ltd, Ajiya Central Services, Multiplus Investment Limited and Kungu Enterprise Limited. ‘

The awards letters has its reference numbers as HQ/ED/(E&T.S)/OP/F.1/163,

HQ/ED/(E&T.S)/OP/F.1/635,HQ/ED/(E&T.S)/OP/F.1/633,HQ/ED/(E&T.S)/OP/F.1/113, HQ/ED/(E&T.S)/OP/F.1/116 respectively.

Further checks conducted also revealed that contrary to N9, 100, 000 contract cost for four units of the item, market price for a unit of the product as at the time the contract was awarded was not more than N350, 000 and four unit would cost N1, 400, 000.

Investigations by Africa Interest further revealed that some of the companies that benefited from the contract award operated without proper registration while some of the contractors cornered different contracts using different business names. The owners of AF and F Security Limited are also joint owners of Takie-Way Communications Limited, Fodacis and Co Nigeria Limited as well as Rovans Construction Company Limited. The Owners are Francis Aiyegbeni, F.O Aiyegbeni, Pastove Robles, Faith Aiyegbeni and Roy C Aiyegbeni. Others are Francis Oria and Griffitta Ayoola. These companies, according to our investigation, have been traced to one source, Mr. Francis Aiyegbeni, the Proprietor of De Rovans Hotel. Mr. Aiyegbeni, who is also known for his interest in boxing, became an NPA contractor in 1995, when he met late General Gumel, the then Minister of Transport under late General Abacha. Aiyegbeni planted one of his nephews at the Port Authority. Our source at the NPA disclosed that one Nestor Aramabo was brought from Germany to work at the Nigerian Port Authority and since the late 90s he has been an inside man for Mr. Aiyegbeni.

Yet, these are only the latest in the Authority act of profligacy. By 15 October 2003, the problem of massive corruption had become so worrisome that the President, Olusegun Obasanjo approved the constitution of a committee headed by Engineer Mustapha Bukar from the Office of the Head of Service of the Federation to review and verify all contracts awarded by the Authority between January 1, 2001 and October 14, 2003.

The corrupt activities at the NPA had prompted a high turnover in the sack of Executive Officers.  Bello Gwandu was removed in October 2001. The Federal Government failed to confirm the acting appointment of his successor, Engineer Joseph Akagwu until he was replaced by Aminu Dabo in May 2002.  But Dabo himself did not escape the boot as he was removed in October 2003.

Apparently unsatisfied with the report submitted by the committee, former  President Obasanjo mandated the Nuhu Ribadu-led committee to carry out in-depth investigation into contracts awarded by the NPA during the period. The committee consist of the EFCC chairman, U. J. Shuwa of the Federal Ministry of Transport; M. A. Bello from the office of the Secretary to the Federal Government; J. O. Omotosho, representing the Ministry of Finance; Buba Gamawa, who works with the Head of the Federal Civil Service and Y. A. Olaleye of the Budget Monitoring and Price Intelligence Unit; Mrs. G. O. Ezekika of the Federal Ministry of Transport served as the committee’s secretary.

The committee in a term of reference, derived from a letter CM/211/455 of April 1, 2005 was mandated to “examine all outstanding bills from its creditors; ascertain whether or not such contracts were awarded in accordance with extant government rules and regulations governing the award of contracts; and identify the culprits and apportion blames as applicable.”

The special committee in its findings established that the Authority awarded contracts without recourse to lay down rules.  The Board alone awarded contracts with a total value of N9.3 billion, $213.6 million, 9.6 million pounds sterling, 204, 395 euros and 56, 220.00 deutschmark.

Gwandu, as Managing Director of the NPA between January 2001 and October 2001, awarded contracts worth N3.095 billion, $2.4 million, 701, 702 pounds sterling and 382, 226 deutschmark.  Engineer Akagwu, acting Managing Director of the NPA between November 2001 and April 2002, awarded contracts totalling N1.6 billion, $1.9 million, 349,532 pounds sterling, 110,556 euros and 545,607 deutschmark. Architect Aminu Dabo, Managing Director of the Authority between May 2002 and October 2003, awarded contracts worth contracts worth N17 billion, $13.77 million, 4.84 million pounds and 569,411 Euros.

To this end, the special committee also declared that “the Board and management of the NPA and the entire contract approving authorities of the Authority, as well as appraisal officers, during the period under review should be appropriately sanctioned for contract splitting and inflation of contract price in utter disregard to laid down government rules and regulations’.

However, when the report was submitted to the Federal Executive Council, the President requested the EFCC should carry out a forensic investigation. Many however, believe that the rejection of the Ribadu report was an attempt to cover up for Chief Bode George, who was the Chairman of the NPA Board during the period that was investigated. With this slap in the wrist approach to the corrupt activities in NPA, there are indications that the act may well continue unhindered.

Effort to get an official reaction from the NPA proved abortive as the Public Relations Officer, Mr. Christopher Borha declined to comment.

Editor’s note:

Our investigation continues