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Nigeria: How Obasanjo Bypassed Due Process to Pay Contractors
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This Day (Lagos)
25 March 2008
Posted to the web 25 March 2008
Stanley Nkwazema
Abuja
As the House Committee on Power and Steel probing power sector funding between 1999 to 2007 meets tomorrow to consider over 80 exhibits presented to it during its public hearing, more revelations have emerged on how the former president, Chief Olusegun Obasanjo, waived due process for payments and made anticipatory approvals for the power projects.
THISDAY further learnt that the Implementation Committee also incorporated the Niger Delta Power Holding Company Plc with the Corporate Affairs Commission (CAC) and made 25 per cent advance payments to three companies, Messers Lahmeyer International/O.T. Otis Engineering and a supplier of power generation equipment and related services, General Electric Company (GE), without the necessary approval.
A document made available to THISDAY showed that the Federal Ministry of Power had written to Obasanjo on 22nd November 2005 vide a letter FMP&S/HM/ABJ/033 entitled "Implementation of the Niger Delta Integrated National Power Project: Request for Approval for Payments".
He told Obasanjo that "Your Excellency may please wish to recall that you gave approval for the implementation of seven new medium-sized power plants in the Niger Delta Region at an estimated cost of $2.5 billion (two point five billion Dollars ) i.e N309.7 billion (three hundred and nine billion point seven billion Naira only).
"We wish to intimate Your Excellency that the project implementation committee has incorporated a company - Niger Delta Power Holding Company Plc with the Corporate Affairs Commission.
"Furthermore, a design consultant Messer Lahmeyer International/O.T. Otis Engineering and a supplier of Power Generation Equipment and related Services - General Electric Company (GE) has been engaged and 25% advance payment effected.
"More equipment procurement and Consultancy/Construction services will be entered into as the implementation of the project progresses."
The documents further stated that "to ensure a timely implementation of the projects, a fast-track approach has been adopted which requires Mr. President's general approval to effect all payments to contractors handling the projects from the Excess Crude Oil Accounts."
The letter signed by the minister which was restricted and approved the next day November 23 by Obasanjo also told the President to note that "the estimated cost of the seven medium sized power plants in the Niger Delta region is $2.5 billion (two point five billion dollars) i.e. N309.7 billion (three hundred and nine billion point seven billion naira only).
"To fast track the implementation processes within the agreed time frame, there is need for Presidential Approval to use the Excess Crude Oil accounts to pay all contractors handling the projects."
The minister prayed that "the funding of the Seven Medium Sized Power project be made from the Excess Crude Account".
This would seem to confirm the testimony of the Director General of the Due Process Office, Mr. Emeka Eze, when he appeared before the House Committee that Due Process was not followed in the payments.
The implementation committee also requested from Obasanjo that "payment for all contractors /Consultants engaged on this project is made against the Due Process Certifications already issued by the Presidency".
The letter also requested the President to direct "the Minister of Finance to approve payments to all Contractors /Consultants handling the jobs from the Excess Crude Oil Accounts".
Obasanjo, in a bid to ensure that the content of the letter was implemented rather than approve the letter, again in a foot note in his handwriting copied the Minister of Finance and the Governor of Central Bank, approving the request.
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THISDAY investigations also show that two months after the communication, Obasanjo through a letter dated February 8 2006, from the State House Abuja copied to the Minister of Power and Steel, Finance, the Accountant General of the Federation, the Governor of the CBN, directed that his approval be conveyed to the respective officials.
The letter signed by his Special Assistant, Taiwo Ojo, which he also countersigned, was also copied to Chief of Staff, Principal Secretary to the President and for the external information of the Secretary to the Government of the Federation.
The minister had in the letter to Obasanjo requesting "Waiver of Due Process Certificates for Payments" said "the NIPP has effectively commenced with contracts already awarded for: the supply of gas turbines Generators and their required Power Transformers, the engineering Procurement and Construction of Balance of Plants as required for the proposed power plants: and the necessary transmission lines that would evacuate resulting new generation capacity, while closing the loop to an otherwise radial national transmission grid."
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Records like this reveal the truth of what actually transpired in the course of upgrading and building of the power projects by the Obasanjo administration. Any right thinking person without preconceived ideas can read through former President Obasanjo's mind how passionately he felt about the power situation in the country that he pushed for a fast track of the projects. In the light of the experience in the country presently, was he not right or could this not be seen as somebody with good foresight? It is believed that if since the change of admnistration the new... [Read Full Text]
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