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The House of Representatives on Thursday read Riot Act to Permanent Secretaries and other accounting officers of all Federal Ministries, Departments and Agencies (MDAs) to desist from breach of Public Procurement Act, which stipulates five years imprisonment on conviction.
Wole Oke, Chairman, House Committee on Public Procurement issued the threat notice at the opening of investigate public hearing into the ‘status and viability of fast power programme accelerated gas production for power generation by Federal Ministry of Power’ as well as ‘fraudulent award of contracts amounting to N42 billion on rural electrification schemes in some federal universities.’
Section 58 of the Public Procurement Act, provides that “Any person who while carrying out his duties as an officer of the Bureau, or any procuring entity who contravenes any provision of this Act commits an offence and is liable on conviction to a cumulative punishment of: a term of imprisonment of not less than five calendar years without any option of fine; and summary dismissal from government services.”
On his part, Daniel Asuquo, chairman, House Committee on Power who noted that the Section 20(1) of the Public Procurement Act, confers responsibility on Permanent Secretaries, Director-Generals and Chief Executive Officers/Managing Directors of public institution are under obligation to fave the wrath of the law for any breach on contract award, while Ministers have minimal or no penalty for breaching the procurement Act.
Asuquo who frowned at the Ministry’s disregard for the resolution of Parliament, observed that the committee sent two letters mandating the Ministry to halt the processes on the award of the contract pending the conclusion of the investigation, which were acknowledged by Louis Edozien, Permanent Secretary, Federal Ministry of Power.
He maintained that the Permanent Secretary and other accounting officers should understand the collateral consequences of their actions and inactions while taking decisions.
The committee alleged that the decision of the Ministry for adopting ‘selective procurement’ contravenes the provisions of the Public Procurement Act.
Speaking earlier, Babatunde Fashola, Minister of Power, Works and Housing who denied the report on the N42 billion contract, however noted that out the N20 billion proposed in the 2017 budget estimates, the Parliament approved the sum of N9 billion.
“If you remember we requested for N20 billion but you only approved N9 billion and when I asked you why you said you can’t get everything and I kept quiet.
“The sum of N9 billion was appropriated in 2017 budget and was applied in initial eight universities, the original plan was to apply it to nine universities and one teaching hospital and not a contract of N42 billion as alleged.
“The Energising Education programme was initially misunderstood as it was presented as if it was just street light instead of a comprehensive electrification project.
“This time around, the allegation has risen against
the same project and it’s pertinent to state that the Energizing Education programme is the first youth and education targeted electrification policy in the country.
“It has a slant towards supporting the realisation of National Determined Contribution of the Federal Government in the world’s change mitigation
Initiative,” Fashola told the lawmakers.
While responding to questions bothering on the process of award, the Minister explained that the approval of BPP six world class bidders were given the nod with an express approval from Bureau of Public Procurement.
On his part, Louis Edozien, Permanent Secretary, Federal Ministry of Power who denied the allegations, assured that all relevant documents on the procuremrnt would be forwarded to the Committee.
He explained that the Ministry applied and got approval for the selective procurement and got Federal Executive Council’s approval.
In her presentation, Damilola Ogunbiyi, Managing Director of Rural Electrification Agency (REA), who denied all the allegations.
She explained that the project was designed for generation of 28.56MW covering nine federal universities and one Teaching Hospital across the six geopolitical zones.
“I would like to unequivocally place it on record that no contract has been awarded by REA amounting to N42 billion on the Rural Electrification Scheme in some Federal or any other Universities,” she said.
While acknowledging the capacities of the 5 preferred bidders as top-notch world players in the power industry, she disclosed that all bidders were subjected to proof of capacity through rigorous technical and financial evaluation criteria during our procurement processes.
“Incidentally, consequent upon the voluntary withdrawal of two of the bidders (Siemens & Watsilla), only two of the three remaining bidding companies (Metka and Sterling & Wilson) were found substantially responsive to the solicitation requirements at the end of the procurement exercise. These two firms were then recommended for award of contracts,” Ogunbiyi noted.
On her part, Olufunke Dinneh, NERC General Manager, Legal Licensing & Compliance explained that the Commission received application from Rural Electrification Agency (REA) for the Captive Generation.
According to the document submitted and onstaimed by BusinessDay, the Cmmmssion on the 23rd October, 2017 approved the applications for captive power generation permits in tandem with the Captive Power Generation Act, 2008.
Dinneh however observed that the application suppose to come from the users (Universities), in line with extant provisions of the NERC Act.
According to her, the conditions have not been complied with by the benefitting University authorities.
“In the course of the evaluation of the applications, the Commission advised REA to contact the universities and submit the applications in their own names since the proposed schemes are cpative power generation. Captive power generation is defined by section 100 of the EPSRA as ‘generation of electricity for the purpose of consumption by the generator and which is consumed by the generator itself and not sold to a third party.
“Therefore the approval was subject to procedural amendment of the submission made by REA and demanding the universities to submit the applications in their respective names. The commission has not issued the permits as the requested forms/documents are still outstanding. The commission has no information on the award of contracts for the RE schemes,” the document read.
In his intervention, Daniel Asuquo, chairman, House Committee on Power who faulted the Commission argued that the procedure was in breach with extant guidelines.
According to him, before granting such approval, the Commission must ensure that the business is profitable and recoverable in lime with global best practice. Hence he mandated the Commission to provide the procedure in respect of the projects to the committee before the next hearing.
While speaking on the investigation, Princewill Okorie, who spoke on behalf of Association of Public Policy harped on the need for implementation of the reports of investigative hearings, noting that similar investigation conducted by Dimeji Bankole’s administration on NIPP was swept under the carpets.
He noted that about N28.665 billion paid to Enugu Electricity Distribution Company yearly without getting electricity, should be looked into.
According to him, Nigeria spend over N796.4 billion annually on fuel to power generators and spend about $13 billion a year to purchase generators.
While responding to various submissions by other stakeholders, Wole Oke, chairman, House Committee on Public Procurement mandated the Permanent Secretary to provide relevant documents on the project, including: minutes of the procurement planning committee, procurement plan as stipulated in the public procurement Act, and approved fund for the implementation of the project in the 2017 Appropriation Act.
He observed that all the companies involved in the contract should comply with the extant law by paying relevant taxes to Nigerian Social Insurance Trust Fund (NSITF), Industrial Training Fund (ITF), Federal Inland Revenue Services (FIRS), among others. |
