As the nation reels from the news of the EFCC’s arrest of the Managing Director of the Nigerian Railway Corporation, Mr Adeseyi Sijuwade, following his indictment by the State Security Service (SSS), questions are being asked as to whether he could have acted alone or in concert with others.
As the nation reels from the news of the EFCC’s arrest of the Managing Director of the Nigerian Railway Corporation, Mr Adeseyi Sijuwade, following his indictment by the State Security Service (SSS), questions are being asked as to whether he could have acted alone or in concert with others.
THE DAMNING INDICTMENT
“The efforts by the Federal Government in revamping the moribund rail sector, to complement road transportation has been marred by controversies and allegations of corruption in the NRC. The current administration in NRC under Sijuwade has not shown any sign of seriousness, to revamp the system as it has allowed personal interest to override its duties.” – SSS Report
THE CHARGE
“Investigation has revealed that the process for the award of the contract for the rehabilitation of NRC Eastern line, Port Harcourt – Kaduna Junction and that of the other NRC Eastern line, Kafanchan – Maiduguri, is fraught with corruption and irregularities, masterminded by Sijuwade. He has been accused of manipulating the contract procedures to favour predetermined contractors and recommending unqualified contractors for specified jobs” - SSS Report
THE BACKGROUND
The project involves major rehabilitation of Nigerian Railway Corporation’s existing narrow gauge single line rail track, including the bridges and culverts, from Port-Harcourt to Maiduguri. The estimated total length of track work to be covered is 1,654km. In order to enable quick delivery of the work within the expected time frame, the work is divided into two contracts.
Contract (3) covers the rehabilitation work from Port-Harcourt to Kaduna Junction through Kafanchan - approximately 916km. Consultant’s Estimate: N47.9 billion.
Contract (4) covers the rehabilitation work from Kafanchan to Maiduguri, including the branch line from Kuru to Jos, totaling approximately 738 km. Consultant’s Estimate: N30.7 billion.
Bids were invited in February 2010 by publications in the Nigerian press. Thirty-five companies expressed interest, and 13 of them were prequalified to submit technical and financial proposals. Twelve companies submitted bids in May 2010 and were evaluated by a team led by Sijuwade. Two of the companies were recommended to the Ministry of Transportation for award of the contracts. In the end, Contract 3 went to Eser Nigeria Contracting Company Limited at N35.59 billion, while Contract 4 went to Symdicate Construction and Commercial Company Limited at N29.96 billion.
Complaints however followed the awards, and the Chairman of the NRC, Alhaji Bello Haliru, initiated an investigation which was later expanded to involve the SSS.
THE CRIME
The investigation revealed that Eser Nigeria Contracting, which Sijuwade recommended for Contract 3, had family connections with him. It is alleged that his brother or a relative (one Aderemi Sijuwade), is a signatory to the bank account of the company held with Skye Bank at Adeola Hopewell Branch on Victoria Island, Lagos, and that records at the Corporate Affairs Commission reveal that the registered office of the company is 65 Queen Street, Alagomeji, Lago. That property belongs to an uncle of Sijuwade, the well-known Ooni of Ife, Oba Okunade Sijuwade. Aderemi Sijuwade is also known to be a Deputy Chairman of Espro Asphalt, an affiliate of Eser Contracting . One Prince Tokunbo Sijuwade has also been named as a Director of Espro Asphalt. Engr Adeseyi Sijuwade has up till now not declared this conflict of interest as required by the Public Procurement Act.
The Public Procurement Act in Section 57 sub. 10 provides that:
“Any person engaged in the public procurement and disposal of assets who has assumed or is about to assume, a financial or other business outside business relationship that might involve a conflict of interest, must immediately declare to the authorities any actual or potential interest.”
It further states in sub 11 that:
A conflict of interest exists where a person:
(a) possesses an interest outside his official duties that materially encroaches on the time or attention which should otherwise be devoted to affairs of government;
(b) possesses a direct or indirect interest in or relationship with a bidder, supplier, contractor, contractor or service provider that is inherently unethical or that may be implied or constructed to be, or make possible personal gain due to the person’s ability to influence dealings;
(c) entertains relationships which are unethical, rendering his attitude partial toward the outsider for personal reasons or otherwise inhibit the impartiality of the person’s business judgements;
(d) places by acts or omissions the procuring entity he represents or the Government in an equivocal, embarrassing or ethically questionable position;
(e) entertains relationships compromising the reputation or integrity of the procuring entity he represents or the Government;
(f) receives benefits by taking personal advantage of an opportunity that properly belongs to the procuring entity he represents or the Government;
(g) creates a source of personal revenue or advantage by using public property which comes into his hands either in the course of his work or otherwise; and
(h) discloses confidential information being either the property of his procuring entity, the Government or to a supplier, contractor or service provider to unauthorized persons.
Secondly, it was discovered that the company did not submit a Bid Security at the time the bids were opened in May 2010. In that case, its bid should have been disqualified for being non-compliant. It is alleged, however, that a Bid Security miraculously appeared among the company’s bid documents subsequently. Enquiries at the issuing bank revealed that the Bid Security was only issued in June 2010, several weeks after bid opening. It is further alleged that Mr Sijuwade, with the assistance of policemen, forcibly caused all the opened bids to be moved into his office from the Company Secretary’s custody presumably so that the Bid Security could be inserted subsequently. Under the Public Procurement Act, the insertion of documents such as Bid Security after bid opening is a serious offence attracting a minimum jail sentence upon conviction of five years, without the option of fine.
The Public Procurement Act in Section 58 sub 4 says:
The following shall also constitute an offence under this Act:
f) altering any procurement document with intent to influence the outcome of a tender proceeding ;
In Section 58 sub 8, the Act says:
An alteration pursuant to subsection 4( ) shall include:
b insertion of documents such as bid security or tax clearance certificate which were not submitted at bid opening;
Thirdly, it was discovered that Eser Nigeria Contracting was registered only a few months to the submission of the bids and had no work experience. Its submitted tax clearance revealed that it had no income and no assessable profit or loss. This means, in the opinion of a source at the Ministry, that such a company had no business bidding for high profile contracts of nearly N70billion.
Fourth, the company’s bid of N35.59 billion against the consultant’s estimate of N47.9 billion was adjudged to have been too low and deemed not compliant, as it is 26% below the consultant’s estimate. The prescribed tolerance margin under the act is +/-15% and the tendency is for bids to be higher than the consultant’s estimates, not lower.
As regards Contract 4, the recommended company by Sijuwade, Syndicate Construction, apart from having no requisite railway experience, submitted a fake tax clearance certificate as enquiries made to the FIRS office where the certificate was purportedly issued confirmed that it had not been issued by them. The company was further shown to have submitted a fake Bid Security, as GTB Bank, which allegedly issued the Security, disowned the document as not emanating from it. Several of Syndicate Construction’s other documents, such as its audited accounts, were allegedly falsified. Curiously enough, Sijuwade did not deem it fit to file a report with the EFCC against this company for fraud after it was brought to his attention that this company’s particulars were dubious. Instead, he set about trying to explain the lapses to see how they could be accommodated, and then went ahead to award the contract. It is alleged that his conduct was informed by his personal interest in the company.
Our source at the Ministry said that it is a big shame that the railway rehabilitation has been turned into a contract jamboree because of the attitude of people like Sijuwade. He told this reporter: “There are only three construction companies in Nigeria with the requisite experience and capacity to carry out work on our railways. Unfortunately and because of how Nigeria is, when you invite bids for railway work, you have thirty five companies responding, most of whom have no business bidding for railway work. To make matters worse, it is the incompetent ones that are getting the jobs because they have connections. We have road construction companies who have no experience of railway construction and who have not even completed their contracts on our roads parading questionable foreign companies who they have never worked with before and who have no experience of working in Nigeria before as partners. Some of them submit audited accounts which do not match with the figures in their tax clearance because Sijuwade allows them. That is why a simple job like Lagos to Kano has still not been completed and may never be. This Eastern line contract is not the only indiscretion of Sijuwade. Everything he has done since he went to NRC has been dogged by controversies of manipulation, fraud and corruption. There is a case at ICPC and many others that nobody is talking about yet.” Even Mr. Sijuwade cv which he submitted is full of bogus claims.
When the ministry reviewed the tender process, they disqualified all the companies whose documents were not compliant. These included the companies favoured by Sijuwade. This did not go down well with him. So what did he do? He cancelled the procurement process and decided to start afresh. So after 10 months of a bid process, he is starting bidding all over again. The companies which submitted fake documents in the first place or inserted documents in their bids after closure are not barred from participation. They are now being afforded the opportunity to perfect their papers. All bidders’ prices are now known including the consultant’s estimate, since bids in the original process were opened on 26 May 2010. The only people who are being disadvantaged are those who meticulously complied with the terms of reference and submitted compliant bids. Is that fair? To make matters worse, the same Sijuwade who superintended the manipulated process in the first place is superintending the re-run. How can it ever be credible? Where is the Minister in this matter? Where is the Chairman of the corporation in this matter? Where is the Due Process office in this matter? Looks like they are all doing “see no evil, hear no evil, speak no evil.”
THE STORY OF CONTRACT 1 AND 2
When enquiries were made about the issues around the case with the ICPC, our Ministry source became agitated. He said, “That is the story of Lagos to Jebba (Contract 1) which they have promised and promised will be delivered but will never be on time because it was manipulated and given to a company without capacity to do it. It is a story of manipulation and flagrant breach of the Public Procurement Act by Sijuwade and covered up by the previous Minister, Ibrahim Isa Bio.
It is the story of how two companies sent in compliant bids, one was N14billion and the other N12billion, and they took the contract and gave it to the company that bidded N14billion at N12billion”. When a legal expert was asked if the government does not reserve the right to give a contract to anybody it likes to, he said, “Once you have submitted to the precepts of open competitive bidding under the Public Procurement Act, then the government’s discretion is limited by the law. It is a criminal offence to allow a company to change its price after bids have been submitted.
Section 31 sub. 3 of the Public Procurement Act is very explicit in this respect. It states that:
The following shall not be sought, offered or permitted:
(a) Changes in prices;
(b) Changes of substance in a bid; and
(c) Changes to make an unresponsive bid responsive.
The legal expert further said, “In law, when you see the word “shall”, and then it is mandatory. There is no room for discretion at all.”
The situation with the Contract 2 is even worse. The company which was awarded the contract has no railway experience whatsoever. Its bid was identical to the consultant’s purported estimate which is unrealistic and undeliverable. Purported estimate because something very strange happened in that consultant’s estimate.
One key element of work is the Akerri flood control work involving the erection of a major bridge across the river at Akerri. The consultant’s estimate in this segment is inconsistent with its estimates in the other sections of the bill of quantities where similar scope of work is priced. Using the same rates from other sections of the consultant’s bill of quantities for identical elements of work, the consultant’s estimate for the Akerri works should be no less than N10billion. However, and by some miracle, the entire Akerri work was priced lump sum in the consultant’s bill of quantities as N2.75bn. Whereas in the other sections of the bill of quantities, the various elements of work are priced, in the Akerri section the individual elemental rates were left blank and a total lump sum figure of N2.75bn entered against the whole section. Whereas the other bidders priced the Akerri works at no less than N10bn, by some stroke of genius, the company to which the contract was awarded quoted a price of N4.46bn, which was closer to the purported consultant’s unrealistic estimate of N2.75bn for Akerri.
An analysis of the successful bidder’s prices side by side with the consultant’s estimate shows a pattern of being consistently below the consultant’s estimate in every other section. Only in Akerri is he higher than the consultant’s and it appears that the manipulation was a balancing figure to bring him to par with the ‘adjusted’ consultant’s estimate.
What needs to happen now is for that consultant to confirm if it really estimated Akerri at N2.75bn and to explain how he arrived at that ridiculous figure but who will ask him? ”I swear on my mother’s grave that he will not be able to justify it”, said our source.
The consequence of all this manipulation is that the Akerri work is standing there not up to 12% complete and the contractor does not know how to complete it. The contract was signed in February 2010 with 10 months duration which means it should have been completed by December 2010. At the current rate, only God knows when it will be completed and how much more will be needed. Meanwhile trains cannot pass.
The question on many lips is, who are Sijuwade’s collaborators whose actions are helping to keep our railways moribund? Who are his protectors and why is he not in jail?
Our source lamented, “Don’t be surprised if the EFCC turn out to tell you that he has no case to answer. ICPC investigated Contract 1. Where is the case? A permanent secretary was arrested for obstructing the investigation. Where is the case? This is Nigeria wonderland. Anything and everything happen can here. Only God can save us from the Sijuwades of this country. Meanwhile President Jonathan is seeking re election so everyone is now a sacred cow.”
