Crude oil pre-shipment inspection contracts breach due process – Reps

House of Representatives

A House of Representatives panel yesterday uncovered several breaches in the procurement processes in the contracts for the pre-shipment inspection of Nigeria’s crude oil.

The committee on public procurement, chaired by Rep Wole Oke (PDP, Osun), established yesterday that the engagement of consultants for pre-shipment inspection and monitoring of crude oil and gas exports was done without adherence to the Public Procurement Act, 2017.

This is even as the committee summoned Finance Minister Kemi Adeosun and the permanent secretary in the ministry to appear before it unfailingly today or face arrest warrant. This followed the committee’s rejection of the representation by the director of legal in the ministry.

The lawmakers found that a company with a tax of over $100 million ended up paying only N20,000 and eventually got the contract.

The committee heard from the Director General of the Bureau for Public Procurement (BPP), Mamman Ahmad, that no procurement plan was submitted to it by the finance ministry before the process was kick-started.

The DG, who assumed office last October, said the procurement process for the contracts was “flawed” from the beginning and that the bureau would have suggested for its total cancellation, adding that the procurement process began in February 2016, long before his assumption of office.

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“I think there was an error on the part of the procuring entity (finance ministry). It appears the ministry didn’t understand how to do this procurement at the beginning,” he said.

The House had in March heard through a motion that some “vested interests” in the Federal Ministry of Finance engaged “non-responsive companies that do not meet basic statutory requirements like possession of valid PenCom certificates before being engaged.”

The committee also established that some of the companies engaged did not meet up with their various obligations such as tax payments to the Nigerian government, yet they were contracted to carry out the project.

In addition, based on documents the panel obtained from the Corporate Affairs Commission (CAC), three different companies said to be registered by the same owners got allocations for both inspection and monitoring, but the BPP DG said the bureau was not aware of that.

The lawmakers discovered that the turnover of a company, Trobell International, was N795,000 as at 2013, yet it got the contract. The panel doubted the tax certificate of the company and referred it to the EFCC, ICPC, Attorney General of the Federation and the police for their opinion and to report back to it.

But the managing director of the company, Sede Thomas, said the tax for the contract was deducted at source by the Central Bank of Nigeria (CBN), which ought to issue the certificate but that the apex bank failed to do that.

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Similarly, the committee wondered why the finance ministry would involve itself in the procurement process in the oil and gas sector when it should have been the exclusive right of other ministries such as that on petroleum and environment.

The panel also wondered why a procurement process should be cancelled after a bidding process was opened.

It also rejected the representation of the Department of Petroleum Resources headed by the Director of Procurement, Usman Ndanusa, insisting that the director of the agency must appear in person today.

The committee also asked a company, JBI, to present its tax clearance and PenCom certificates, evidence of registration, audited accounts, among others today as the investigative hearing continues.