Leadership (Abuja)
Philip Nyam
18 November 2008
Abuja — The House of Representatives yesterday beamed its searchlight on the railway sector as it commenced investigations into the alleged payment of $7.7 million (about N1billion) by the ministry of finance under former President Olusegun Obasanjo's administration to Technics Engineering Architecture Marketing (Team), an Italian based company without the knowledge of its sister company based in Nigeria.
The payment is said to be part of payment for the consultants' contract of $240million for the construction of Ajaokuta-Itakpe-Warri rail project entered into by former President Olusegun Obasanjo but later cancelled.
Chairman of the House committee on land transport, Hon. Bernard Udoh who led the committee to the company on a fact finding mission queried the payment of the money to an Italian based company not registered to carry out business in Nigeria just as he observed that it was not guaranteed by a bank bond as required by the law.
He also queried the non remittance of withholding tax and Value Added Tax (Vat) to the authorities on the money paid. In addition, the committee is not comfortable with the alleged decision of the company to cart away government properties including furniture and 21 project vehicles in lieu of debt owed it from the rail village when the contract was cancelled.
According to the chairman, the committee in the course of the investigation also discovered that the only Nigerian engineer in the employ of the company, Mr. Chinedu Nwazoje has ceased to be one, having defaulted in the payment of Council for the Regulation of Engineering in Nigeria (COREN) dues in the last three years. Udoh equally pointed out that the company sacked all Nigerian engineers, opting to employ expatriates in their place.
He said they also discovered that the company never registered with COREN, a pre-requisite for practice of engineering profession and consultancy in Nigeria.
When the chairman asked the external auditor of the company, Messrs Olukayode Akindele & co. represented by Mr. Tony Okubanjo whether he was aware of the payment of $7.7million made to the company in 2007 and whether such was captured in its audit reports for the year, Okubanjo responded that the payment was not captured explaining that "We are not auditing TEAM Italy but the TEAM registered to do business in Nigeria."
On the failure of the company to remit withholding tax and Vat, Okubanjo stated that the normal practice is for the government to deduct the tax from source before paying the balance to the company.
The committee however disagreed with the auditor's submission insisting that the nation would have been shortchanged in the payment. Committee members were also suspicious of the motive for the payment made directly to the Italian company without reference to its local counterpart.
Mr. Dott Menegath, vice chairman of TEAM Nigeria in his presentation before the committee however argued that the suspicion of the committee was not particularly true. Although he agreed that the money was paid directly to its parent company in Italy, he claimed that it was neither to launder funds nor to evade tax.
According to him "The money was paid directly to our parent company in Italy because it was to carry out procurement and supply expertise." He explained that the amount required to be paid by the government was $24million representing 10percent of $240million contract. He insisted that the $7.7million was paid on account and that the tax must have been posted.
He explained that he evacuated the project vehicles and furniture from the site to avoid pilferage and damages adding that efforts to meet with the transport minister in the last two years to discuss the matter have not been successful.
It will be recalled that this is one out of the many investigations being carried out by the House under the leadership of Speaker Dimeji Bankole. Just this week, the Hon. Igo Aguma-led Ad hoc committee that investigated activities of the Nigerian National Petroleum Corporation (NNPC), its subsidiaries as well as the Department of Petroleum Resources (DPR) is expected to turn in its report. Also, the House committee on power chaired by Hon. Ndudi Elumelu, which investigated the power sector from 1999 to 2007 has since laid its report on the table and it is awaiting deliberation by the House. Similarly, its committee on capital market and banking had before now carried out series of investigations into the capital just as the committee on finance made a lot of discoveries while investigating the non-remittances of revenue generated by ministries, departments and agencies into the Federation Account
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