Senate probes NPA for suspected fraud in N7.5b Bayelsa contract

Senate has commenced probe into alleged underhand dealings in award of contract for shore erosion control work at Akipelai, Ayakoro and Otuoke in Bayelsa State.

The Senate Public Accounts panel, chaired by Senator Matthew Urhoghide, based its investigation on 2017 Auditor General’s report submitted to the committee for consideration.

The contract was awarded in March 2012 with 14 months completion period.

But, as at November, N4.2bn has been paid, which represents 56.61 per cent of the contract sum to the contractor.

However, review of quantities (BOGs) under No 1 attachment revealed that mobilisation fee of N1.1 billion paid to the contractor, was supported by conditional bank guarantee from Zenith Bank Plc with validity for 365 days, which expired on March 2, 2013, contrary to the provision of Section 35 ‘1’ of procurement Act 2007 and Financial Regulations 2933 “1” (2009), which only provide for submission of an unconditional bank guarantee or insurance bond.

But NPA, in a written response to the allegation claimed that recovery of mobilisation fee might create a financial strain to the project, hence the need to recover the fee on installment basis.

Also, it was revealed that the sum of N19.5 million was paid for Toyota Hilux Double cabin petrol engine however, there was no evidence to confirm that these vehicles were purchased.

In the NPA response to the allegation, the agency claimed that the Toyota Hilux was purchased.

In another observation by the Auditor General, N128 million provided for insurance against damages to persons and properties was certified and paid through certificate No-3 with no evidence that any insurance was undertaken.

But, NPA in its response said: “Noted for future compliance. Payment for insurance of the works was carried by the contractor as required to the tune of the approved amount.

“The particulars of the insurance are usually retained by the contractor.”

In addition, in the interim valuation certificate No 4 dated, November 11, 2015, showed that the value of works executed at the period was N3.9 billion, representing 52.07 per cent.

But, the total amount paid to the contractor was N4.2 billion, representing 56.61 per cent of the contract sum and it implies that contractor was paid more than the work executed by N344 million.

NPA is expected to appear before the committee to make oral presentation of its response to the query.