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Nigeria: Senate Threatens to Jail Contractors
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Leadership (Abuja)
5 July 2008
Posted to the web 7 July 2008
Andrew Oota
Abuja
The Senate yesterday threatened to recommend criminal prosecution for contractors who were awarded federal road contracts but could not execute such contracts after payments were made.
The Senate ad-hoc committee investigating the transportation sector was also told that the delay in payment to contractors has resulted in a situation where the initial cost of the contracts had been doubled due to huge interests that had accrued.
Former minister of Works, Chief Tony Anenih had told the committee that some of the contractors could not complete their jobs as a result of lack of commitment by the previous administration of Chief Olusegun Obasanjo.
Chief Anenih had also told the panel that the previous administration under Chief Olusegun Obasanjo did not show enough interest in the construction of roads by owing contractors , whom according to him, took loans from commercial banks at very high interest.
The Senate committee investigating the management of funds released for projects in the transport sector since 1999 was provoked to issue the threat yesterday following shocking revelations to it by officials of the Federal Ministry of Transportation and the road contractors.
The committee took very seriously the revelation that the Gombe-Biu road which was supposed to link Gombe State to Borno State had been abandoned because of alleged disrespect of contract agreement by the contractor.
Irked by the revelation, chairman of the panel, Senator Heineken Lokpobiri said: "Some of you (contractors) will go to jail at the end of our investigation because we are not here to play. We will go on inspection. At the end of the day, we will write our report and some of you will go to jail"
The director in charge of Federal Highways (Construction and Rehabilitation), Alhaji Suleiman Danladi, had revealed to the panel that the Ministry of Transportation had paid the contractor, Messrs SINOCON the sum of N600 million as advance payment and mobilisation to execute the contract.
But the company's managing director, Mr. Austin Owudu Ochei, immediately countered Danladi's submission, saying that his company collected only N316 million.
However, the threat of the panel came after the revelation that the work had since been abandoned following disagreement between the ministry and the company.
The committee was told that the percentage of work done was not proportionate to the amount of money paid to the company.
Also, while Danladi disclosed that only 20 per cent of the work had been done, Ochei said that 52 per cent of the contract had been completed.
The probe panel also expressed shock on hearing that there was an agreement between the ministry and the contractors to the effect that if the ministry delayed in payment, it would pay some money to the contractors as interest.
The committee was told that a particular situation existed in which a total amount of N900 million was to be paid to a contractor as interest on delay, even as the original contract sum was N700 million.
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