...Explains waivers of Due Process
Report
MOHAMMED MUNIRAT NASIR_________________________________________________________
FORMER President Olusegun Obasanjo
has explained the reasons behind the waiver of due process, saying
it was to avoid unnecessary delays in prosecuting the project. He
gave the reasons in his presentation to the House of Representatives
Committee on Power and Steel, an advance copy of which was made
available to the News Agency of Nigeria (NAN) yesterday in Abuja.
The former
President explained that all power projects went through due process
except on payment certificates. He said the idea of due process was
to check on competence, prices, or cost and projects were issued
with due process certificates.
Power projects
were exempted from due process payment certificate since they were
not on normal annual budget but special provision from excess crude,
Obasanjo said. He said that the fund for the projects were available
and, therefore, there was no need to cause further delay in payment
for such an urgent project where any delay could be costly in human
discomfort and inadequate power supply to industries.
“The first set of
invoices by contractors was delayed in due process office for almost
two months — an unnecessary delay which was holding up progress,’’
he said. He told the committee that after consultation with
governors, chairmen of local governments and the National
Assembly, it was
agreed to finance power projects from reserve of unallocated oil
revenue since energy touches every life everywhere. “It was to be an
investment contribution which is on the basis of revenue allocation
formula and to be refunded when NIPP is privatised on the same basis
of revenue allocation.
“At that time,
everybody agreed and we moved to finance NIPP on that basis,’’ he
said. Obasanjo said that in every case, to the best of his
knowledge, all contracts for NIPP were based on
open-publicly-advertised tender system except for the turbines where
the four major producers in the world — GE, Siemens, Hitachi and
Alshtom — were invited to submit tender.
He explained that
GE was the cheapest with the best terms all round but particularly,
including establishing a repair and maintenance centre in Nigeria.
Obasanjo said that turbines which were custom-produced would only be
produced when there was assurance of payment in form of down payment
or irrevocable letter of credit.
According to him,
the government policy was to pay the contractors only 25 per cent
mobilisation fee. He said it was not the duty of the President to
oversee such payment, saying, “you are all well aware of those whose
duty it is to pay.”
The former
President said if a contractor who had been paid mobilisation fee
was not actively on site, it would be wise to find out what the
problem was, adding that if it was established that it was not
performing, the bank guarantee could be called.
Obasanjo said
that for letters of credit, a contractor was not allowed to draw
money until there was evidence of performance normally in the form
of shipping documents which were negotiated between the bank of the
client and that of the supplier.
On allegation of
non-registration of companies or that non-existent companies were
paid, he said these were not matters for the President but for
appropriate officers in the relevant ministries.
“If this ever
happened, there would have been a big syndicate racket that should
be broken and all concerned prosecuted because monies are paid by
cheques or letters of credit.
“Companies will
not have bank accounts opened for them without evidence of
registration and other documents authenticated. If the Committee has
such a case, please ensure prosecution without delay,’’ he said.
He told the
committee that international and multi-national companies like the
suppliers of turbines did not necessarily need to be registered in
Nigeria to carry out operations, directly asking for waiver if
necessary or through their local representatives.
“I am, however,
informed that the issue of unregistered companies has since been
clarified and the committee has received evidence of registration of
all the 34 companies,’’ he said.
Obasanjo said
that while looking for solution to the country’s energy problem, “I
visited South Africa where they depend heavily on thermal plant
based on coal, generating in total 40,000mw and planning to spend 21
billion dollars in the next five years.
“We could not
embark on coal generated thermal until we can produce coal locally
and no private sector will be involved in coal or other solid
mineral production unless there is assurance or expectation of
reasonable return on such investment backed by necessary law,
regulation and survey.
“The solid
mineral bill lasted two years in the National Assembly. And no
investor could be persuaded to come to invest in solid mineral when
there was no law in place. “The law came in the last quarter
of our administration,” Obasanjo said, advising that very serious
attention could now be paid to thermal generation from coal. |