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Business and EconomyReps begin probe of fraudulent multi-billion railway contracts

Reps begin probe of fraudulent multi-billion railway contracts

OrderPaperToday – The House of Representatives has begun investigative hearing into how the public purse may have lost billions of naira in alleged fraudulent contracting by the Nigeria Railway Corporation (NRC).
The Reps specifically queried the award of a N1.33 trillion contract for the Port Harcourt to Maiduguri narrow gauge railway project even while a N72 billion rehabilitation project on the same rail line still is yet to be completely terminated.
The House Ad-hoc Committee set up to investigate the N72 billion project awarded since 2011,on Thursday, engaged the Nigeria Railway Corporation (NRC) and other stakeholders.
The committee, led by Abubakar Nalaraba, noted that the aforementioned narrow guage railway project was abandoned after payments of almost 90% had been committed to the contractors whom were yet to complete the project.
The investigative panel perceived this as wastage of public funds.
Three companies that were awarded the contract, namely CGGC Global Projects Nigeria Limited, Lingo Nigeria Limited, and Eser Contracting and Industry Company Incorporation were present at the hearing.
The Bureau of Public Procurement (BPP) that was expected to cause appearance was absent at the hearing.
The committee frowned at discrepancies noticed in the documents submitted by the contractors and the railway corporation on the project.
Director of Operations, NRC, Niyi Ali, said the first segment of the project from Port Harcourt to Makurdi was awarded to Eser Contracting Industry company incorporated for a sum of N19.63 billion for a duration of 10 months.
The second segment was from Makurdi to Kuru, with a support line to Jos and also a support line from Kafanchan to Kaduna, was awarded to CGGC Global Projects Nigeria Limited at the sum of N24.4 billion for a 10 month period also.
The third segment was from Kuru to Maiduguri and this was awarded to Lingo Nigeria Limited at the sum of N23.7 billion for 10 months.
He said for Eser, the percentage of work completion is 88 percent from 2011 till date while 82 percent of the payment had been made. For CGGC he said the percentage of work completed is 90.4 per cent and payment percentage is 90. 35 percent.
For Lingo, he said, the percentage of work completion is 42.10 percent, which was due to security issues. He said the company has gotten 42 percent of their payment.
He said the project had to be abandoned and they adopted an exit plan in 2020 following the award for the reconstruction, with additional lines, of the entire railway project by the Federal Executive Council (FEC).
He said as part of the exit plans they went into negotiations with each of the contractors and arrived at a settlement with CGGC and Eser.
However, he said Lingo did not agree to the exit plan and they are presently in arbitration over the matter.
However when asked to give a update of the sum so far paid to Eser, NRC said the sum of N18 billion had been paid before the exit plan and N425 million paid after. He said there was still an outstanding payment of N1.1 billion.
The figures did not add up to the percentage he gave earlier which prompted the committee to direct that the NRC bring a comprehensive record of all payments concerning the projects to the next sitting.
The companies were also directed to do the same for the purpose of reconciliation.
Ali said the last payments to the companies were in 2020, except Lingo that was last paid in 2019.
Earlier the Marketing Manager of CGGC, Gift Etuk, said they were paid 75 percent of the contract sum contradicting the submission of the NRC.
Legal Adviser of Lingo Nigeria Limited, Ndubuisi Augustine, also contradicted the NRC saying their last payment was in 2014.
Mr. Emmanuel Offordile represented the Managing Director of Eser, who he said was stuck in Turkey, due to restrictions as a result of the COVID-19.
The lawmakers also queried the continued payment to companies in 2020 even when they knew the project was going to be abandoned.
The committee directed that the Chief Executives of the companies must be present at the next sitting of the committee given the gravity of the matter.
Lizzy Chirkpi
Lizzy Chirkpi
Lizzy Chirkpi has a BA in French and is a senior reporter at OrderPaper. She has keen interest in photojournalism and video documentary. She's also a writer and author of a book, "Pourquoi Le Francais." She likes reading, traveling and watching movies.
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