N16.85 Billion Fraud rocks FCT, CUSTOMS, PHCN

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Mallam Nasir El-Rufai, former FCT Minister

Mallam Nasir El-Rufai, former FCT Minister
The Independent Corrupt Practices and Other Related Offences Commission has uncovered massive fraud valued at over N16.85bn in federal ministries, departments and agencies.

According a recent report by the commission, while it exposed N1.85bn in MDAs, an additional N15bn fraud was allegedly uncovered in the Nigeria Customs and Excise alone.

Among MDAs indicted in the six-page report are the Federal Ministry of Transport, Nigeria Ports Authority, Power Holding Company of Nigeria, Federal Ministry of Science and Technology, Petroleum Equalisation Fund, Federal Capital Territory, Federal Medical Centres in Ebute Meta, Lagos, Asaba and Owo; National Human Rights Commission and the Energy Commission.

For instance, the investigation into the affairs of the PHCN showed that many approved projects, which were paid for by the organisation, could not be found for verification.

The report added that money paid for various abandoned projects, as well as duplicated projects could not be accounted for.

PHCN: Funds not accounted for
Part of the ICPC report reads, “The PHCN blames the inability of the Central Bank of Nigeria to speedily guarantee the safety of the funds of the foreign firms involved in the projects as well as the problems of delays in clearance at the ports by the Customs and the Standard Organisation of Nigeria.

“We found the same contract in one location awarded to two different companies, such as the procurement and installation of power transformer at Plot 14, Phase 1 Layout. The contract for the 500KVA transformer was awarded to Jianem Eng. Company Ltd. and Danmarke Trading Company Ltd. at N7,716,127.25 each.

“The committee also discovered an abandoned pilot scheme for geographical information system in Benin, Edo State, where out of an appropriation of N100m for the project, N99,780,388 had been paid. Similar projects are also sited in Ibadan and Lagos and are said to have been completed, but there is no guarantee and therefore requires verification,” the report noted.

Again, the ICPC said its investigation revealed that there had been provision for the procurement of pre-payment and billing programme meters for PHCN transmission offices in Enugu, Ibadan, Kaduna, Kano, Port Harcourt, Lagos, Yola and Benin, valued at N1.5bn; but “reports have it that these pre-meters are not readily available in these areas.”

Contract inflation, duplication
On the Federal Capital Territory too, the report said there was gross inflation of contracts for the Millennium Development Goals projects in the nation's capital.

It noted that the contract for an eight-bedroom storey building was awarded in different locations in the FCT at different contract prices of N27.3m, N29.4m, N30m, N32m and N47.6m .

The ICPC added that the FCT could not account for the N47,710,960.50 budgeted for the construction of 16 cluster classrooms with drainage and landscaping; and another N7,308,450 for the construction of a fence and gate house.

The ICPC said, there was no evidence the money was returned to the treasury.

FCT: Insider 'trading'
The anti-graft agency noted that the issue of insider trading was still a source of concern in the affairs of the FCT.

The report added, “Two or three companies were discovered to be the beneficiaries of almost all the contracts of the FCT in 2009.

“For example, Aco Furniture Ltd alone was, in 2009, awarded various contracts for the construction of an eight-bedroom storey building; and supply of three sets of teachers' furniture to Junior Secondary School, Rubochi.

“The company also won four other contracts for the supply of eight sets of classroom chairs and other contracts for the supply of 10 sets of primary school classroom furniture.

“The second contractor, M/S Simag Nig Ltd, was awarded six different contracts for the supply of 40 and 60 leaves exercise books; six sets of classroom furniture; provision of books for FCT secondary schools, construction of central store/exam processing/teachers' development office and construction of zonal education office at Kwali.”

Transport Ministry: Fund diversion
At the Federal Ministry of Transport, the ICPC said its verification of capital projects revealed “the payment of a whopping sum of N26m to some members of staff of the ministry for monitoring and evaluation of the contract of National Transport Survey and projection, out of a total contract sum of N174.81m.”

The ICPC also said it discovered at the ministry that 46 contractors who had executed various contracts between 2008 and 2009 were yet-to-be paid. The commission, however, said the procurement officer had written and undertaken to pay them in June 2011

The report noted that it was strange that the ministry had not yet paid, even when provision for it was made in the 2008/2009 budget.

“It is possible that the money had been diverted since some of the contracts were from overhead,” the report stated.

NPA: Payment for unapproved projects
At the Nigerian Ports Authority, the ICPC discovered the payment of mobilisation fees for projects that were yet-to-be approved because of variation.

They are payment of 15 per cent mobilisation or N12,014,100 for the supply of four Mercedes Benz fire water tankers, out of the contract sum of N80,094,000.

The report noted that the request for variation was still awaiting approval.

The same goes for the supply of two Mercedes Benz fire-fighting trucks at N189m. Mobilisation of N28.3m had been paid.

“We note the payment of 15 per cent mobilisation fee of N3,540,000 for the supply of 200 chemical protection suits, out of the total contract sum of N25.5m for the supply of the equipment that was yet to be ascertained.”

PEF: Excess expenditure
The ICPC said it was highly suspicious of insider trading at the Petroleum Equalisation Fund, where only two companies, Oma Hosting Ltd and JMG Ltd were the only two beneficiaries of all the contract awards in 2009 for the supply of all generators to depots nationwide.

“Clarification is yet to be established as to the source of N25m excess expenditure, where N30m was budgeted to the National Emergency Management Agency for the supply of RIV, but N55m was actually expended,” the ICPC said.

Operatives of the commission had grilled five officials of the Nigeria Customs and Excise for the theft of 10 containers from the Lagos ports.

The containers had equipment for power projects valued at N15bn.

The containers, which had been lying at the ports for many months, were diverted to the Ikorodu terminal and finally evacuated with the aid of forged documents.

According to reports, the five Customs officers, led by an assistant comptroller moved the containers, which they thought had been abandoned, out of the Ikorodu terminal with forged papers.