The Economic and Financial Crimes Commission has opened investigations into the massive fraud that characterized the eight-year administration of the immediate past Governor of Abia State, Dr Okezie Ikpeazu. The probe by the commission followed the massive discovery of the forensic auditors engaged by the current Governor of Abia State, Dr Alex Otti......See Full Story>>.....See Full Story>>
Sources in the commission confided in THE WHISTLER that a thorough probe of the administration of Ikpeazu has commenced.
One of the sources in the commission told THE WHISTLER that the probe by investigators in the commission will cover broad areas such as allegation of misappropriation of funds, violation of the public procurement laws of Abia State, the diversion of the N10bn which the governor raised money for from UBA that was paid to Ferotex Construction company for the execution of “non-existent” airport project among others.
Another source told THE WHISTLER that the commission has received copies of the forensic audit report prepared by KPMG Advisory Services that indicted the governor of financial recklessness during his eight years in office.
The report was submitted by the administration of Dr Alex Otti to the EFCC. The Commission upon receipt of the report commended the governor, stating that this is the first of its kind in the country.
The Commission added that the forensic audit report has made the investigations to be done by EFCC operatives on the alleged misappropriation of funds of the immediate past administration easier.
Analysis of the forensic audit report done by THE WHISTLER has unraveled how the ex-governor and state officials circumvented the Public Procurement Law of Abia State in the award of various contracts running into billions of naira.
The revelation of the violation of the procurement law in the award of the multibillionaire contracts is coming just a few days after the ex-governor issued a statement about the projects his administration implemented during his eight years in office.
Ikpeazu was governor of Abia State between 2015 and 2023.
THE WHISTLER had last week exclusively reported how the government paid the sum of N10bn to Ferotex Construction Company for the execution of the controversial ‘non-existent’ Abia Airport Project.
The report had put the ex-governor and his officials in the spotlight as many Nigerians have started calling on the Economic and Financial Crimes Commission to arrest and prosecute them for corruption.
The former governor had in response to THE WHISTLER’s report through his then Commissioner for Information, Chief John Okiyi Kalu, claimed that the airport funding was diverted for other road projects.
Findings revealed that the N10bn appropriated by the State Assembly cannot be used to finance any project other than the airport project without a virement which must be duly approved by the lawmakers.
Budget Virement means the process of transferring budgeted funds from one line item to another, with the approval of the lawmakers, to enable budget managers to amend budgets in the light of experience or to reflect anticipated changes.
Checks by THE WHISTLER at the Abia State House of Assembly revealed that there was no request from the ex-governor for the virement of the N10bn airport fund for a road project.
Further findings by THE WHISTLER revealed that many of the contracts which the governor had claimed to have awarded and funded were done in violation of the public procurement laws of the state.
Contract Awarding Process For Abia State Government
A review of the Abia State Public Procurement Law 2012 and Financial Regulations 2001, revealed that the contracting process is as follows:
a. The contract award process could either be initiated by the procuring Ministry through a letter to the Governor or by the State Governor directly.
b. The State Governor directly identifies projects, due to the strategic and economic need of the State, and then mobilizes the Ministry to commence the contracting process.
c. The procuring Ministry also initiates a request through a letter to the State Governor requesting approval to commence a project, which would have been budgeted for in ABSG’s Annual Budget.
d. The procuring Ministry advertises and solicits for bids through the following procurement methods:
i. Selective Tendering: The procuring Ministry selects existing contractors based on the contractors’ previous performance and capacity to deliver on the contract. This process is considered, where the project is urgent or upon urgent request of the State Governor and the general tendering process is assessed to be time consuming.
ii. Open Competitive Bidding: The procuring Ministry advertises for bids in the State’s newspaper, on its notice board, in at least two national newspapers and on any official website of the procuring entity.
e. The Procuring entity utilizes the period between the advertisement and bid submission deadline to prepare in-house estimates.
f. The Ministerial Tenders Board (MTB) opens submitted bids in the presence of the procuring Ministry and bidders or their representatives.
g. The MTB evaluates the submitted bids and forwards a brief of the meeting (which includes the analysis of the tenders and the recommended contractor) to the State’s Tenders Board, referred to as Finance and General Purpose Committee (F&GPC), where the contract is ₦50,000,000 and above for consideration.
73 Contracts Worth ₦95.22bn Cannot Be Traced
Investigations by THE WHISTLER revealed that the Ikpeazu administration awarded and implemented 73 contracts totaling ₦95.22bn that were never advertised for open competitive bidding in line with the Abia State public procurement law and as such cannot be traced.
Section 26 (1) of the State’s Procurement law states that “All procurement of goods and works by all procuring entities shall be conducted by open competitive bidding.
Section 27 (1) further states that invitation to bid may be either by way of State Competitive Bidding or Nation Competitive Bidding.
The forensic audit report reads in part, “The Office of the Governor, ASOPADEC, Ministry of Works and Public Utilities and Water Resources did not provide record of advertisements of tender opportunity for 76 contracts amounting to ₦95,225,934,678.78 on the State’s newspaper, on its notice board, at least two national newspapers and any official website of the procuring entity.
“For the Ministry of Works, the DPRS stated that where there is no ITT. It could either be due to missing records or the contracts were solicited through single sourcing or selective bidding i.e. the Ministry invites selected contractors to bid for the identified project. However, the DPRS did not provide a record or justification to support his statement.
“The other Ministries did not provide responses as of the date of this report. Furthermore, the Ministries did not indicate or provide justification for the contracting method (i.e. single sourcing or selective bidding) utilised in a contracting process.”
The companies that got the contracts that were never advertised are Dichmark Insurance Broker Ltd, Tom Onyeagwa, Sonbroson Services Ltd, Okey Technical Construction Ltd, Track Care Global Const Nig Ltd, Ekcleen Integrated Services Nig Ltd, Logistics De-Luke Ltd, Alphagreen Solution Nig Ltd, J Pros International Nig Ltd, Urban Elite Co, Incomtel Nigeria Limited, Tetralock Bus Serv Ltd, Eedc Remittance.
There is also Solace Multi-Biz Concepts, Smut Edge Integrated Services Ltd, Okey Technical Construction Company Ltd, Ferotex Nig Ltd, Conduit Resources Ltd, Track Care Global Construction, Ekcleen Integrated Services Nig Ltd, African Export Import Bank, Paceo Carretera Nigeria Limited, Abdulkadeer Consulting, Kati Habitat Nigeria, Praise Properties Limited, Dicemokad Consultants Nig Ltd, Seafair Projects Limited, Marguerita Ventures among others.
69 Contracts Worth ₦118.7bn Awarded To Contractors With Incomplete Bid Documents
Section 18 (6) of Abia State procurement law requires that all bidders in addition to requirements contained in any solicitation documents must possess professional and technical qualifications to carry out particular procurements, financial capacity, equipment and other relevant infrastructure, legal capacity to enter into the procurement contract, and all its obligations to pay taxes, pensions and social security contributions.
Other requirements, in addition to the aforementioned requirements, include proposal/quotation, record of contractor registration with Abia State Ministry of Works as contractor, and record of payment of non-refundable tender fees.
However, the forensic auditors in their report noted that 69 contracts amounting to ₦118.7bn were awarded to contractors with incomplete bid documents.
Some of these contracts are the expansion and dualization of Ururuka Road, Phase 2 from Umuobiakwa, Obingwa L.G.A. to Isicourt Umuahia South L.G.A. awarded to Track Care Global Construction Company Limited for N47.41bn; Reconstruction of Link Roads in Aba: (i) Sacred Heart-Chibuike-Uzonikpa-Omuma Link Road Off Faulks Road, Aba with Concrete Pavement; (ii) Ngozi Avenue-Nwokocha Link Road Off Faulks which were awarded to Ekcleen Integrated Services Nigeria Limited for N3.76bn; Reconstruction and Construction of Uratta-Umuezeke-Umuekechi awarded to Ferotex Construction Company Limited for N2.9bn and Construction of Umuobiakwa-Owo-Onicha Ngwa Road (10km) awarded to Delhope Resources Limited for N2.73bn
Road Contract Valued At N1.41bn Awarded To Gemp Engineering Despite Late Submission Of Bid
THE WHISTLER’s analysis of the forensic audit report further revealed that the Ministry of Works awarded a contract for the “Construction of Itukpa to Ossa Ukwu to Mgboko to Obete to Iheorji Road, Obingwa LGA” amounting to ₦1.41bn to Gemp Engineering despite submitting bids after the due date of the ITT.
Further findings showed that three companies bidded for the project which had a bid deadline date of June 14, 2019.
The companies that applied for the contract are Mauphil Company Enterprises which submitted its bid on June 21, 2019 (seven days after the deadline); Gemp Engineering Limited which submitted its bid on June 24, 2019 (nine days after the deadline) and Admau Integrated Service which submitted on July 15, 2019 (31 days after deadline)
But rather than rejecting the bids in line with the provisions of Section 29 of the Abia State Procurement Law 2012, the government of Ikpeazu awarded the contract at a cost of ₦1.41bn to Gemp Engineering.
The action of the Ministry of Works that awarded the contract is contrary to Section 29 of the Abia State Procurement Law 2012, which states that “any bid received after the deadline for the submission of bids shall not be opened and must be returned to the supplier or contractor which submitted it.”
The Ministry was said not to have provided any justification for the violation of the procurement law.
No Records Of In-house Estimates For 33 Contracts Worth ₦9.82bn
THE WHISTLER also gathered that the Ikpeazu’s administration failed to provide an In-house estimate which is a rough approximation of the potential cost of construction or procurement contracts.
This, it was learnt, would have enabled the procuring Ministry to make informed and data-driven decisions when evaluating and selecting a contractor.
Based on standard practice, the In-house estimate should precede the evaluation of submitted bids.
However, THE WHISTLER understands through the forensic auditors that there was no record of inhouse estimate for 33 contracts amounting to ₦9.82bn
“The In-house estimate provided by the Ministry of Finance, Works, Youth, Public Utilities and Water Resources and the Office of the Governor is not dated, hence there is insufficient information to determine the timing of the In-house estimate as stated in the aforementioned practice,” the report noted.
Some of the contracts with no records of in-house estimates are the Construction of Link Roads to Major Economic Zones of Abia State such as Amaise-Umuobiakwa-Ohanze Road, Owo-Ahiafor Agburike-Ohanze Road, Umuaro-Umuanunu-EkwereazuNto-Border Road 4. Ovom/Umuogele Junction, Ukuenyi-Abala-Ika (Akwa-Ibom Border).
The projects were awarded to Tunnel End Investment Company Limited for the sum of N3,370,832,840.00
Similarly, the construction for the Upgrade Of Umuahia Township Stadium In Umuahia North Lga, Abia State which was awarded to ARON NIGERIA LTD for N1,200,000,000 did not have records of in-house estimates.
Seven MDAs Have No Bid Document Records For 85 Contracts Worth N157.34bn
Investigations by forensic auditors also revealed that seven Ministries did not provide a record of bid opening for the 85 sampled contracts with a cumulative value of ₦157.34bn. Consequently, it was discovered that there is no record that the seven Ministries complied with Section 32 of the State’s Procurement Law, which requires that all bids be opened in public, in the presence of the bidders or their representative and any interested member of the public.
It was gathered that there was no record of the Ministry’s Evaluation for 72 contracts which is a violation of Section 34 of the Abia State Procurement Law that states, “a contract shall be awarded to the lowest evaluated responsive bid from the bidders substantially responsive to the bid solicitation.
Furthermore, Section 24 of the Abia State Procurement Law and Section 3303 of the Abia State Financial Regulations reflect that the relevant tender board has the responsibility for the evaluation of bids.
The Ministry of Works, Finance, Public Utilities and Water Resources, Office of the Governor and ASOPADEC did not provide a record of bid evaluation for 72 of the 85 sampled contracts with a cumulative value of ₦98.57bn
Consequently, it was learnt that there was also no record that the Ministries complied with the relevant laws and regulations for the 72 contracts.
Some of the projects that do not have bid documents were the expansion and dualization of Ururuka Road, Phase 2 from Umuobiakwa, Obingwa L.G.A. to Isicourt Umuahia South L.G.A. The project was awarded to Track Care Global Construction Company Limited at a cost of N47.41bn; Reconstruction/Dualization of Port-Harcourt Road with Services Lane on both sides was awarded to Hartland Nig. Limited for N9.88bn
There is also the Reconstruction of Faulks Road/Rehabilitation and Expansion of Ifeobara Pond awarded to Setraco Nig. Limited for N8.82bn and the Reconstruction and Expansion/Dualization of UrurUka Road from Obikabia to Umuobiakwa LGA as well as Construction of Roundabout at Obikabia Junction, awarded to Track Care Global Construction Company Limited for N6.94bn among others.