From the Federal Executive Council last week came another confidence-shattering disclosure that several multi-billion naira projects had been awarded without proper engineering designs and costing. The result, according to the Minister of Information, Labaran Maku, is that the Federal Government has to review the contract sums upwardsin some cases, by about 150 per cent. Among such projects considered at the FEC meeting were those in Kubwa Districts 4 and 5, whose value was increased from N18.88 billion to N42.68 billion; Karshi Districts 1 and 2, from N11.52 billion to N28.22 billion, and River Niger dredging, from N34.8 billion to N43.3 billion.At a media briefing, the Minister announced the displeasure of President Goodluck Jonathan over the shoddiness of the contract award processes, and assured Nigerians that, thenceforth, "no new contract without complete design and cost" would be approved. The United States Agency for International Development says "the potential for fraud is created when the need assessment is not adequately or accurately developed. A government agency which, with or without collusion, continually changes its mind about what it wants, will make it possible for a contractor to substantially increase the contract price."Makus disclosure was a clear admissionand most lamentablethat, up till that moment, the Nigerian authorities had yet to be sufficiently resolved on the enforcement of statutory requirements and regulations governing contract awards. Nothing was said about possible punishment for culprits nor the source of the additional funds allocated as augmentation! The Public Procurement Act, signed into law in 2007 by the late President Umaru YarAdua, was a confidence-building initiative, as the Federal Government explicitly committed itself to best practices in matters of public procurement and capital projects execution. It should therefore be of interest to know just how the Due Process Certification mechanism, superintended by the Bureau of Public Procurement, got so short-circuited in a routine fashion by ministries, departments and agencies over the years. Should ministers, as chief executive officers of the MDAs, just walk away from this scandal without sanctions'BPPs guidelines for public sector procurements and award of contracts are designed to achieve the best in economy, efficiency, fairness, reliability, transparency, accountability and ethical standards. The guidelines apply to civil works (bridges and buildings, highways and basic physical infrastructure), goods (equipment, material and supplies, commodities, textbooks, medical supplies) and services (expert advice and training, building maintenance, computer programming). Virtually, all the projects with poor design and costing fall under one category or the other of inputs that require certification. Corruption drives contract award processes in the country. It is said that the cost of executing projects in the country is one of the highest in the world. In 2009, Kellogg Brown & Root and Halliburton paid $177 million in disgorgementrefundsto the United States Securities and Exchange Commissions after being found guilty of bribing Nigerian government officials over a 10-year period in order to obtain construction contracts. KBR also agreed to pay a $402 million fine to settle parallel criminal charges against it by the US Department of Justice. Again, on June 28, 2010, Technip S.A., a Paris-based, worldwide engineering, construction and services company agreed to pay a criminal penalty of $240 million over the same $6 billion contracts to build the Bonny LNG project.Section 4.2(b) of the PPA stipulates that all public procurement shall be conducted based only on procurement plans supported by prior budgetary appropriations; and no procurement proceedings shall be formalised until the procuring entity has ensured that funds are available to meet the obligations and has obtained a "Certificate of No Objection to Contract Award." Now that the Federal Government has gone ahead to approve augmentation in such staggering sums, where is the evidence that the BPP was part of the review process, as required by the Act' Is the rule of law on course' BPP should be asked to explain if and how the projects passed through its scrutiny.It is regrettable that the government has failed to demonstrate an awareness of the correlation between contract awards, infrastructure development and economic performance. Public procurement is one of the government activities most vulnerable to corruption. Around the country are some 11,886 capital projects, worth N7.78 trillion that have been abandoned, according to the Presidential Projects Assessment Committee. How much augmentation is required to have them completed is simply too frightening to contemplate. Between January 2010 and March 2011, contracts for 358 projects (worth N1.16 trillion) were awarded by the Federal Government. In May 2010, it was discovered that the N63.8 billion second runway construction job of the Nnamdi Azikiwe International Airport, Abuja, was over-quoted by over 30 per cent. It is generally known that corruption thrives on secrecy. What is the degree of transparency in the award of contracts by government' A US Department of State report, 2011 Investment Climate StatementNigeria, states that "corruption persists in the awarding of government contracts. Procurement for capital projects is often subject to over-invoicing, which permits improper payments or kick-backs to private and public sector officials."Jonathan has to accept responsibility for the severe lapses in capital project management that have drained the country of scarce financial resources, and strive to improve the capacity of his government for service delivery. He should provide the enabling environment for civil society organisations, the mass media and the wider public to scrutinise public contracts. Key terms of major contracts should be made public at all times and officials must be held accountable for lapses.
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