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Issues in Ogun 2009-2019 contracts review

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Twenty-one years since the return to civil rule, development for many communities across the country, at least in the sense envisaged by the country’s founding fathers, remains a mirage.

The explanations for this sad state of affairs include the general lack of political vision, faulty leadership recruitment processes, and failure of the three arms of government to discharge their constitutional roles creditably.

In particular, as the Final Reports of the Contracts/Projects Review Committee for the Year 2009–2019 empanelled by the Ogun State government indicates rather starkly, the vexing issue of the relationship between projects, contract awards, and social development has been at the heart of the failure of governance about which many Nigerians have over the years often expressed grave concern.

Firmly committed to the principle of value for money, Governor Dapo Abiodun set up an 11-man committee comprising astute professionals and headed by a seasoned engineer, Adekunle Mokuolu.

The objectives were quite broad: to identify all outstanding significant construction/projects in the state in the past 10 years, determine the level of execution and quality of output of the projects; ascertain whether the processes of award of contracts were in line with due process as established by extant laws and regulations; assess if the disbursement pattern were in line with established process and procedure and recommend any viable pathways for the completion of the projects, or in the alternative, determine other actions that best align with the interest of the state and the citizenry; recommend a framework that ensures continuity of projects and programmes between succeeding administrations with a view to entrenching accountability and responsibility in government; and, finally, advise the state government appropriately on such other matters considered necessary for the committee on the projects.

The findings of the committee are, to say the very least, damning. In all, it found that over N218b would be needed to complete abandoned projects. Many of the projects awarded by previous administrations were white elephants. In many cases, no needs assessment was done, as projects were awarded merely to satisfy the whims and caprices of political actors.

Now to the specifics: all the contracts awarded from June 8, 2015, when the then state governor, Senator Ibikunle Amosun, signed the law regulating public procurement contravened the law. This is because the projects were not certified by the Ogun State Procurement Bureau before being awarded. There was progressive degeneration of compliance with standard procedures for contract procurement, project administration, and compliance with established extant laws, rules, policies, and guidelines.  Most of the projects were of no socio-economic value to the host communities or even the general development of the state.

Rather distressingly, the state government was unduly exposed to heavy debt and financial burden. No environmental impact assessment (EIA) was submitted in respect of major projects such as the Abeokuta International Airport, Wasinmi project, and the 10-lane Abeokuta-Sagamu Interchange road; there was no common basis for the submission of bids/tenders as each company had different designs and quantities, determining contract sums. No tender evaluation report was submitted on most of the projects, just as the bureaucrats in the various MDAs were not adequately involved in pre- and post-contract procedures.

Worse still, with the general lax supervision, contractors, particularly the multi-nationals, did as they pleased, receiving payments without the knowledge of the appropriate MDAs. The capability of some contractors was never assessed, and so they got additional contracts beyond their capacity to execute.

With government institutions sidelined, contractors received payments without recourse to valuation/certificate.  Indeed, very strangely, some contracts had tax waivers on both withholding tax and value-added tax. Contractors did not bother to submit an advance payment guarantee for mobilization fees obtained, and projects did not have 5 per cent retention clause in their contract. Contractors received the full contract sums before defects liability period, without deducting the retention fee.

In some cases, verbal instructions from higher authorities were often alluded to without written confirmation even for variation of 50 per cent over and above the contracts. In the typically Nigerian method of political abracadabra, some contractors were awarded contract for which they did not submit an expression of interest for the advert of 2011! Surely, this is a recipe for financial anarchy.

Besides, there were strange variation claims, and many contract documents lacked details, being of doubtful professional competence. Most of the contract agreements provided by MDAS had no seal or date on the signature page. Some contracts had neither letters of award nor contract agreement.

That is not all: the unit rates for works by multinational companies were unreasonably higher than those for wholly indigenous construction companies executing works of similar nature, and due consideration was often not given to circumstances that could arise from arbitration or litigation during or after projects. This was to be expected since all the contract documents did not pass through the state Ministry of Justice, and neither was its advice sought. It is therefore no surprise that most of the projects were abandoned due to poor procurement and administration.

No doubt, the culprits brought great embarrassment to the state, and need to be held accountable. But there is an overarching lesson in all of this: whenever they are taking political decisions, political office-holders must always look at their impact on the populace. They must shy away from self-aggrandizement at the expense of state survival, laying the groundwork for future prosperity through ensuring value for money.

With regard to the report under reference, it is a fitting tribute to the committee that it did not shy away from highlighting and documenting the few projects that were faithfully executed while suggesting ways in which the many abandoned projects can be brought back to life at a reasonable cost to the state. If the report is any indication, it is clear that the Dapo Abiodun administration is committed to making real change in the lives of the people of Ogun State. It surely deserves commendation for the laudable step taken to ensure that the loopholes created to siphon the state’s resources are plugged and new mechanisms put in place for greater transparency going forward. In this regard, it is my considered view that the recommendations of the committee are worth considering.

Appropriately, the committee recommended the extension of the one-week stipulated for submission of bids/tender for bids/tender for turnkey projects, since such projects require that the bidder visit the site, take measurement, evaluate, design, price and produce working drawings for the project. Other recommendations are that the state government should produce a master plan for the development of the towns and cities, with urban renewal designed and executed with consideration for the need of present and future generations, and with plans for funding well established.

The state government is asked to establish an archive building to warehouse all its records for safekeeping and easy reference, and to ensure that construction projects have a clear purpose of improving the socio-economic development of the state. All forms of turnkey projects or design and construct for road projects are to be discouraged, while external consultants should be engaged to re-evaluate and review the contracts/projects.

The state government is tasked to constitute the Ogun State Council on Public Procurement and Bureau of Public Procurement as provided for by the Public Procurement Law Of Ogun State, 2014; and to establish and properly document project definition, scope, cost definition, time definition, and availability of resources. It should also develop and institute a policy to ensure harmonized unit rates for construction works without discrimination among the tenderers. This would ensure a level playing field and encourage capacity building of our indigenous contractors for sustainability.

Alhaji Alli sent this piece from yekinalli@aol.com


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