Thursday, September 19, 2013

AVIATION MINISTER STELLA ODUA ACCUSED OF INVOLVEMENT IN MULTI-BILLION CONTRACT SCAM


Nigeria’s Minister of Aviation, Stella Adaeze Oduah, has been accused of allocating funds for multiple sham contracts ostensibly for the rehabilitation and upgrade of eleven airports across the country.

A petition by members of the National Union of Air Transport accuses Mrs. Oduah of touting the rehab projects as “quick-win” strategies to burnish President Goodluck Jonathan’s “transformation agenda.” In a letter to the leadership of the Nigerian Senate in July, the petitioners detailed a series of scams at various levels in the allocation process of the contracts. 

Incidentally, the minister has drawn praise from the Nigerian media for the ongoing airport remodeling projects. But the petitioners portray the exercise as an elaborate scam and daylight robbery of public funds. In the words of the petition, the projects are “calculated to dupe [the] unsuspecting Nigerian public.”

The petition discloses that the two-phase projects have become a four-level scam.

The first part was the ministry’s allocation of funds for “consultancy” service, which called for select firms to draw up designs and plans for the upgrade and rehabilitation of the airports. The second part was the allocation of the actual contracts to predetermined companies through a rigged tenders’ process that ignored advertising the jobs to attract qualified companies. The third and fourth segments of the alleged scam involved the repetition of the first two steps under a spurious tag called “Phase II.”

The petitioners alleged that, prior to the award of the main contracts to “upgrade and rehabilitate” the airports, Mrs. Oduah had handed out consultancy jobs estimated at N255 million. The contracts reportedly went to three crony firms without being advertised in order to attract bids from qualified companies.

The petition also alleged that the consultancy jobs were awarded without first obtaining certificates of “No Objection” from the Bureau of Public Procurement (BPP), thereby breaching the due process set out to guide the award of contracts.

According to the petitioners, Mrs. Oduah “contracted three consultant firms to carry out consultancy services for ‘urgent upgrade’ and rehabilitation of terminal buildings in the eleven airports in the country. This, she labeled Phase 1 of the airport remodeling exercise.” The unionists added that, before informing the Tenders Board about the allocation of contracts, the minister had predetermined and given out consultancy jobs to the three firms in a selective tender mode.

“Messrs Ngonyama Okpanum and Associates; Messrs Design Union Consulting Ltd and Messrs Triad Associates Ltd were awarded contracts for consultancy works on the upgrade of the airports at the sums of N99, 179,507.17; N60, 986,730.46 and N95, 520,011.93 respectively without advertisement, certificate of No Objection from the BPP or approval by the tender’s board,” the union stated.

The petition alleged that members of the ministry’s Tenders Board were cajoled into ratifying the allocations and to further approve a “selective tender” method for the award of the actual contracts. “The Companies were awarded in ‘anticipatory approval,’ with [a] plan that [the] certificate of No Objection would be obtained (later) from the BPP,” the petition alleged. Then they contended that the minister’s action amounted to “a criminal offense and had led to impeachment of a seating senator at one time.”

The petition alleged that Mrs. Oduah orally informed the Aviation Ministry Tender’s Board that she had approval from President Goodluck Jonathan to adopt “selective tendering” in awarding the contracts, adding that such presidential approval was non-existent.

SaharaReporters saw a correspondence between the FAAN and the BPP where a reference was made to the president’s said approval, but the actual letter was never seen, according to the union.

The BPP had relied on the virtual president’s approval as the basis for approving the selective tender mode for the ministry to carry out the project. The BPP wrote: “On the strength of Mr. President’s approval, Due Process ‘No Objection’ is hereby granted to Federal Ministry of Aviation to adopt Selective Tendering Method for the urgent Upgrade and Rehabilitation Works at Eleven (11) Airport Terminals in the country.”

Based on the above, the Air Transport Union insists that the minister’s use of “selective tendering” to award contracts only to companies that were predetermined by the ministry, violated sections 40-42 of the Public Procurement Acts. According to the union, selective tendering is only acceptable when a particular contract requires some peculiar expertise available only to a select few companies. “Renovation of terminal buildings falls short of this requirement, but BPP approved it for Selective Tendering (notwithstanding),” alleged the union. Meanwhile, the FAAN had cited “urgency” as its reason for adopting the selective tendering mode and had allotted six months as the maximum duration for the projects. However, according to the petitioners, the projects, which began in 2011, have not come close to completion, contrary to the ministry’s hype.

An executive of the tender’s board told SaharaReporters that the union’s petition “has merit.” According to him, “They said it was for urgency that they elected the selective tender method and stipulated six months, but it is over two years now and you can see their basis for selective tender is defeated. This is all fraud.” He added, “Besides, what they called Phase II is approval for second time on the same projects they called Phase I.”

The union observed that the list of companies proposed by the Aviation Ministry to obtain BPP approval were completely different from those the minister eventually awarded the contract to, even though she never sought again to ratify her decision with the BPP.

Mrs. Oduah “got approval for the job using some companies, but substituted the companies later without writing back to the BPP for fresh approval,” the petitioners alleged, adding that the actual contracts, like the Consultancy, were also not advertised on official tenders’ journals or on any national dailies. SaharaReporters learnt that some members of the tender’s board had raised questions during a September, 2012 meeting when the acting Managing Director of the FAAN, Mr. Emeka Ezeh, had sought their approval for said Phase II of the project. Some board members reported demanded a progress report on the first phase they approved. They also questioned the capability of the contractors proposed by the Aviation Ministry to simultaneously carry out a Phase II when there had not been any significant progress on the so-called Phase I. The union as well as tenders board member who spoke to our correspondent alleged that Phased II was fraught with contract duplications from Phase I.

“For example, Zakhem Construction Nig. Ltd was awarded the contract for upgrade of MMIA Lagos in the 1st phase at the sum of N920, 191, 147.58. Curiously, [the] same company was awarded another contract in the tune of N981, 900,300.45 for ‘upgrade and rehabilitation’ of MMIA Lagos, under a spurious banner of Phase II.” According to the petition, “the entire Phase II is sheer duplication of Phase I.”

The union further alleged that the “various contractors [were] still on site implementing phase I, seven months after respective awards, without any comprehensive project status report to determine capability of the companies, yet the Ministry awarded ‘phase II’ jobs to [the] same firms.”

They also noted that the memos for the jobs were initiated by FAAN, whereas the contracts were for the ministry. The employees also said the contracts had always been awarded before the reports were made. “The consultancy contracts were merely [a] smokescreen to siphon money,” the petition alleged.

In an exchange of correspondence between the FAAN and the BPP, obtained by Saharareporters, the BPP asked FAAN to do more due diligence to ascertain that the contractors had actual capability to simultaneously carry on with another project when they had yet to make any significant progress in the said first phase. The BPP had also requested that the FAAN check with the Corporate Affairs Commission (CAC) to ensure that the companies it awarded contracts to were “unrelated.” There was no indication that the FAAN complied.

The petition stated that “most of the contractors on site are not among those approved by the BPP in the adopted Selective Tender method,” adding a concern “about the safety of patrons at the airports” as well as the abuse of public funds.

In interviews with SaharaReporters, two leaders of the union expressed disappointment that the leadership of the Senate had taken no action since receiving their petition.