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Contract Scam: Senate may take NNPC to EFCC
By Bassey Udo,
Paul Mumeh and
Adetutu Folasade-Koyi
(Abuja)
Senators have grown
impatient with the shoddy handling of contracts and money by the Nigerian
National Petroleum Corporation (NNPC) and have threatened that its Group
Managing Director Funso Kupolokun could face corruption charges.
The Senate Committee
on Petroleum Resources (Upstream) pledged on Monday to take him to the Economic
and Financial Crimes Commission (EFCC) if he fails to provide
“satisfactory answers” to 155 points of query raised on the award
of key contracts and out-sourcing of funds for Joint Venture (JV) cash calls.
It gave Kupolokun a
month to provide the answers.
Areas being questioned
include out-sourcing for about $600 million extra budgetary funding for
operations without due process, continual falling rate of local content in the
oil industry, inflation of contract sums by two JV operators by about $100
million as well as monopoly of tariff fixing on operations by private
companies.
Committee Chairman Lee
Maeba said the rate of local content in the oil industry has declined from
about four percent in 1999 to about two percent and noted that oil operations
continually go to multinational firms to the detriment of Nigerians.
He stated that
although the NNPC provided all the information requested by the committee on
JVs earlier in the year, it is surprising that a differential of about $100
million was discovered as a result of "some bloated and inflated
contracts" by two JV operators.
Maeba is also
surprised that the NNPC is sourcing for about $600 million extra funding for
its JVs with Shell Petroleum Development Company (SPDC), despite the $3.2
billion provided for them in this year’s budget - which the
corporation had agreed was adequate to realise the government’s industry
aspirations.
The award of the
Equipment Procurement Installation and Construction (EPIC) contract for the
Bonga Oil field Floating Production Storage and Offloading (FPSO) project is
one of the contracts the committee considers questionable.
Said Maeba: "Bonga contract with Shell,
particularly the EPIC contract, was fraudulent. Due process was not followed.
There were a lot of sharp practices in the award of these contracts, Details of
these contracts have not been sent to the Senate.
“If after one
year of administering the oil industry, Kupolokun could not see the irregularities
in the procedure, lack of due diligence and due process in the award of the
contracts, he would be considered to have collaborated and endorsed them".
But, in his
presentation, Kupolokun told the committee that there was nothing fraudulent in
the award of the Bonga contract as it was done through a competitive bidding
process that included pre-qualification in the technical and commercial stages
based on NNPC and Shell standard contract procedures.
"All the
contracts, except Topsides and Integration approved for AMEC, were awarded to
the recommended lowest bidders", he insisted, and gave assurance that the
NNPC would provide “all the information requested by the committee after all the relevant
departments” of the corporation “have sent in their inputs on all
the issues involved”.
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