Public procurement in the country is riddled with corruption masterminded by contractors and their collaborators in the bureaucracy. This has resulted in the loss of huge public funds as many contractors abandon the job after full or substantial payments had been collected. In some cases, they collect the mobilisation fee and flee.
Undoubtedly, the Ministry of Power, Works and Housing is embroiled in these incongruities, going by a recent revelation by the Socio-Economic Rights and Accountability Project. In a recent statement, the anti-graft advocacy campaigner said the Minister, Babatunde Fashola, had released documents detailing contractors in breach of their contractual obligations to the Federal Government. One of the contracts was awarded to a firm in 2014 for the supply and installation of test and maintenance equipment relays to NAPTIN regional centres. But only 13 items have so far been supplied out of 16, whereas government had paid N79.4 million to the contractor out of the total N87.7 million involved.
But this is just the tip of the iceberg with SERAP’s demand for details of other defaulting contractors as listed in its Freedom of Information request to the minister, on the basis of which he acted. An FoI suit in a Federal High Court, Lagos, whose leave SERAP sought to make the demand, pulled the trigger. SERAP’s Executive Director, Kolawole Oludare, said, “We will continue to push the ministry and its agencies to reveal more details of the alleged corrupt contractors and companies, as contained in our FoI request.”
It is surprising that the country is still bedevilled by this “business as usual” culture in contract execution, despite the President Muhammadu Buhari government’s stance on corruption. The magnitude of this gangrene was exposed by a Presidential Projects Assessment Committee in 2011, chaired by Ibrahim Bunu, which identified 11,886 projects abandoned across the country, after the contractors had collected a whopping N2.69 trillion. As of 2014, the Niger Delta Development Commission had a total of 285 abandoned projects, which received a vacuous presidential reprimand.
These anomalies thrive where the Bureau of Public Procurement template for the award, execution and payment for job done is not being adhered to by the government itself. According to Section 35 of the BPE Act 2007, a contract mobilisation fee shall not exceed 15 per cent. The law further provides for a “performance guarantee,” a precondition for the award of any contract. Subsequent payments are graduated based on performance or on achieving agreed targets.
Yet, despite this global best practice, government continues to lose money to contract scams, climaxed in the 100 per cent full payment and over-payment to some National Integrated Power Project contractors during the Olusegun Obasanjo administration. Details of these were unfurled in a House of Representatives Power ad hoc committee public hearing, in 2008, chaired by Ndudi Elumelu.
The NIPP contracts, the committee observed, were entangled in the mesh of “waiver of due process certification for payment,” which fraudulent contractors took advantage of. “It is curious and quite strange that (government) officials rush to pay contractors in full even before engineering design for the projects has been completed and approved,” the committee noted.
When a contractor abandons his work, after collecting more than his due, a responsible government should not fold its hands in resignation. The Economic and Financial Crimes Commission and the Independent Corrupt Practices and other Related Offences Commission should go after such dubious contractors. In fact, the opacity of such contracts does not help matters. For instance, the Federal Capital Territory Administration, in 2013, lamented that the execution of some of its hospital projects in its area councils, which were expected to last for 18 months, had spanned eight years without completion. Situating the challenge properly, the Health and Human Services Secretary, Demola Onakomaiya, said then, “The major problem is how to get the original contractors to fulfil their own part of the obligation.” This suggests that the contract had changed hands illegally and the whereabouts of supposedly genuine contractors remained unknown.
SERAP should remain steadfast in its crusade until other violators are revealed and public funds recovered. If the EFCC was let loose on 180 companies by the then Director-General of BPP, Emeka Eze, for trial under Jonathan’s government, then the Buhari administration should do better on contractual breaches. At this stage of our development with massive infrastructure gap, contract fraud or shabbily-executed projects should be viewed as a serious economic crime.
This fact comes in bold relief with the Africa Development Bank’s assessment that “Nigeria’s infrastructure cumulative financing needs are estimated to reach $3 trillion by 2044 or about $100 billion annually.” Nigeria by now ought to have a database of credible contractors and, by inference, those blacklisted as development institutions like the World Bank and AfDB have, to ensure value for money and integrity in public procurement.
Experts say that all the stages of the construction process are susceptible to corruption, especially the pre-qualification, tendering and inspection phases being the most at risk. Halting this contract sleaze in the country implies that every contract has to pass through the furnace of due process. When a contract has a performance bond, the guarantor should be held liable in the event that the contractor disappears. But it is not just the contractor that is at fault; all those in the bureaucracy that create the fertile ground for this mess to fester must be held to account. That is the hallmark of good and accountable governance.
The anti-graft agencies should uphold the law by exposing corruption and pursuing justice for those lawbreakers who abuse their authority and positions of trust. While no company should be too big for prosecution, unscrupulous individuals whose criminal behaviour erodes trust in government should also be brought to justice.
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