Alleged N54bn contract inflation: Counter accusations rock ministry as Reps committee summons Director
There was drama when the House of Representatives Ad Hoc Committee investigating the slow pace and controversies surrounding the alleged re-award of the Ijebu-Igbo-Ibadan road project commenced hearing.
The Hon. Kwamoti Bitrus Laori ad hoc committee had last Thursday, visited the project site in Ibadan, Oyo State, and parts of Ogun State before inviting the Federal Ministry of Works and the contractor for a meeting with the lawmakers on Tuesday.
During the investigative hearing, the lawmakers requested the representatives of the Ministry of Works to explain the re-award of the ongoing Ijebu-Igbo-Ibadan road project (about 45km) to another company when the original contractor was still on site.
Engr. Adedamola Kuti, Director, Highway (South West), Federal Ministry of Works, had told the probe panel during its inaugural sitting on September 7, 2023, that the said contract being handled by DC Engineering Ltd had been terminated since September 2022 and re-awarded to two other companies. He then promised the lawmakers to make a copy of the termination letter available to them within 72 hours.
However, about three weeks later, neither Kuti nor any official of the ministry was able to make a copy of the termination letter available. The ministry officials were also unable to provide any letter regarding the approval by the Federal Executive Council (FEC) and Bureau of Public Procurement (BPP) authorizing the re-award of the project to another contractor at N54 billion. They did not also provide any piece of information regarding the bidding process.
Engr. Ade Adedeji, Executive Director, DC Engineering Ltd, told the committee that he did not receive any letter of termination of contract from the ministry, stating that their equipment and workers are still on the project site. He said the same ministry had certified their work and just paid them last month, August 2023.
He, however, expressed concern about how the officials of the ministry ignored their request for the review of the projects due to the rising cost of materials from N9.8 billion to at least N14 billion but went ahead to re-award the same project to another contractor at N54 billion.
When the lawmakers asked the representatives of the Ministry of Works, led by Engr. Agboola Olajide, Deputy Director, Highway, to justify the re-award of the project, there was confusion among them. Olajide later said the termination letter had not been issued, but the project has been rewarded to another contractor, Areatech Construction Ltd, since September 2022. He noted that it is the duty of the legal department to issue such a letter. The lawmakers queried his assertion, noting that all the departments in the ministry were supposed to work in synergy.
When the lawmakers also asked why the ministry certified the work done in May 2023 by DC Engineering and still paid them in August 2023 instead of seeking means of recovering money given to the contractor, the deputy director echoed what his boss Kuti earlier told the committee during its inaugural sitting on September 7, 2023, that it was an automated payment by computer. However, a check by our correspondent indicates that before any payment is authorized by the Ministry of Works, it goes through offices headed by directors and deputy directors; these include planning, audit, checking, CPO and finance department.
The Ijebu-Igbo-Ibadan road project was awarded to DC Engineering Ltd in 2018. It was expected to be completed within 24 months (2020) but from the documents made available to the ad hoc committee, only about 15 per cent (N1.3 billion) of the contract sum (N9.8 billion) was paid to the company from 2018 to 2023 by the ministry, a situation many attributed to the slow pace of the work.
During the inspection of the project by the lawmakers last Thursday, it was observed that a company, Duhu & Sons Construction, was handling 7km out of the 45km road. The company was awarded 14km and mobilized in 2011, but it was reviewed to 7km in 2013 and still paid some money. After five years of neglect, 45km was awarded to DC Engineering, inclusive of that of Duhu & Sons.
On 23rd December 2019, the ministry reduced DC Engineering’s job by 7km, reduced the contract sum from N9.8 billion to N8.8 billion and still re-awarded the 7km to Duhu & Sons.
When the lawmakers inspected, only the bridge had been constructed with a partial width of asphalt in some places, and some portions of the road had failed. Engr. Olajide claimed that the company did 3.7km, but the committee chairman, Laori, made it clear that what they observed was less than that and not too far from the bridge at Ita-Egba in Ogun State. He also said it was obvious that Duhu & Sons had been on the 7km road since 2011 and paid some amount of money, and the company is no longer on site. The ministry could not clarify whether they had terminated the contract of Duhu & Sons or not.
In the documents sighted by our correspondent, a final warning letter was given to DC Engineering Ltd on December 26, 2022, while Engr. Kuti told the committee that the Ijebu-Igbo Ibadan road contract was re-awarded to two companies in September 2022. He claimed it was awarded to two companies to work from both ends, Oyo and Ogun States.
Olajide told the committee on Tuesday that it was re-awarded to only one company. It took them over a minute before mentioning the company’s name, Areatech Construction Ltd.
Meanwhile, a letter from the Bureau of Public Procurement to the Federal Ministry of Works conveying the ‘Certificate of No Objection’ for ‘Areatech’ received on February 23, 2023, showed the ministry presented N67 billion to BPP for approval, but the BPP only approved N54 billion. The letter brings to question Kuti’s claim of two companies handling the project.
Similarly, a letter referenced, BPP/S./CCM/23/VOL./358 dated May 10, 2023, from BPP indicated that the ‘Certificate of No Objection’ granted to the Ministry of Works in favour of ‘Areatech’ has been suspended. BPP based its decision that a letter of termination is required before a certificate of no objection will be issued to another company.
When Laori sought to know the consultant in charge of the project to clarify many issues, Olajide said there was no consultant. However, after contributions by some of his team members, he said the consultant’s contract had expired.
The House of Representatives Ad Hoc Committee told DC Engineering Ltd, that if taxpayers’ money paid does not equate job done, they would ensure the company refunds the money to the government treasury.
The committee then summoned the officials of the Federal Ministry of Works, Director of Engineering Highways (South West), Director of Finance and Legal Departments to appear on Thursday.
The Laori led-committee said the probe panel will not hesitate to summon the Minister of Works if the officials fail to give the necessary explanations regarding the controversies over the re-award of the said project.