N55m Fraud: Ministry Faults Bailey's Defence
From Kunle Aderinokun in Abuja
Commissioner for Insu-rance, National Insuran-ce Commission (NAI-COM) Chief Oladipo Bailey's claim that the Finance Minister was aware of the N55 million Vehicle Insurance Sticker (VISER) contract has been denied.
Bailey, along with other commission's officials, were summoned last Tuesday by the Minister of State for Finance, Mrs. Nenadi Usman as directed by the Minister of Finance, Dr. (Mrs.) Ngozi Okonjo-Iweala who asked her to investigate the VISER project in which there has been allegation of fraudulent practices that was widely reported in national dailies recently.
It would be recalled that Bailey was accused of inflating the contract price for VISER by N11 from N39 to N50. The fraud was uncovered when the Tender Board Committee reviewed the contract awarded to Rocstone International Limited, London by the Commission for the printing of five million units of VISER. But the commissioner for insurance (CFI) has since denied the allegation and also claimed that he sought approval from the minister of finance on the contract.
However when contacted Okonjo-Iweala said she was not aware of the contract award but assured that she would direct Usman to probe into the matter.
The meeting was attended by officials of the ministry of finance, NAICOM's representatives and chaired by Usman, indicted Bailey. Those in attendance were Dr. G.T Irele, Director, Planning, Research and Statistics; Director, Expenditure, Budget Office, Dr. A.A Kiaima; Deputy Director, BFI, Dr. S.A. Bamidele; Former Chairman, NAICOM, Alhaji Ibrahim Sadiq; Deputy Commissioner (Technical), NAICOM, Chief O.E. Chukwulozie; Deputy Commissioner (Finance and Account), NAICOM, Alhaji Mustapha Umar; Director, NAICOM, Mr. Samuel Ordu Director, NAICOM, Mr. Laide Benson-Onashokun and; Secretary, B.J. Mohammed, CAO, BFI.
According to the minute of the meeting made available to THISDAY, the NAICOM officials at the meeting who were also in the Executive Committee disclosed that the contract to print five million units of VISER was actually awarded at N39 per unit and not N50.
"Other staff of NAICOM at the meeting with the exception of the CFI unanimously agreed that the production of the sticker at N50 per unit was the price initially approved.
"The CFI's (Bailey) efforts to defend his positions on why the company should be paid N50 per unit despite earlier agreement on N39 per unit did not receive the support of the entire members," the report stated.
Bailey had explained that three companies bidded for contract namely, Messrs Soaring Heights Nigeria Ltd, Check Point Ghana Ltd and Rocstone International Ltd, UK. He added that, after due and painstaking consideration, Rocstone was unanimously picked as "the best credible company capable of handling the job."
Consequently, the commissioner for insurance further said, the Governing Board of the Commission gave approval to the company to print 400,000 VISER at the price of N50 per sticker however noting that "the commission's initial target for the sticker was 5 million, which amounted to N250 million."
However, he added, the commission was financially constrained and ordered only 400,000 units in the first instance with the expectation that more orders would be placed as funds become available.
The schedule for the printing exercise for the first quarter, according to Bailey was: January 2004- 400,000 units @N50 = N20 million; February 2004- 400,000 units@N50 = N20 million and; March 2004- 400,000 units@N50 = N20 million.
Bailey had explained further that the initial 400,000 units was exhausted earlier than expected and he wrote to Rocstone to print and supply additional 410,500 at the same initial cost of N50 per unit to meet the increasing demand of the sticker. The price of N50 per unit, according to him, "would take care of current inflationary trend and the foreign exchange fluctuation."
He said the decision was a collective one by the Executive Committee and not a unilateral one taken by him. But the members disagreed that he took a unilateral decision, claiming that that the decision was just passed to them for information and not for deliberation.
When queried by the minister of state for finance why he ordered for 410,500 instead of 400,000 approved by the board, Bailey replied that "the additional 10,500 units added to the original number of 400,000 units was done in error."
Already, NAICOM has paid for the VISER contract and it would soon delivery of the stickers printed at N50 per unit.
In his response, Chikwulozie revealed that "what was agreed upon with Rocstone International Company Limited (UK) , as far as printing and supply of additional 400,000 units of the stickers was concerned was N39 and not N50 per unit as being claimed or portrayed by the CFI(Bailey)."
He lamented that he was the second in command but payments and other matters of crucial importance were being effected or taken without his knowledge.
Also, Umar said " the argument advanced by the FCI to justify his stand on the cost of N50 per unit of time factor and scarcity of products in the market was not justified."
The Secretary/Legal Adviser disclosed that "the final amount agreed upon following series of negotiations, for the printing and supply of additional 400,000 units of the stickers between NAICOM and Rocstone International Company Ltd was N39 per sticker.
He added that "when the company wrote again July 2004. threatening to withdraw from the contract unless the price was N50 per unit as agreed, the Tender Board committee met and upheld that the contract be cancelled outrightly ."
Making his own contribution, Sadiq, the erstwhile Chairman, NAICOM Board of Directors, "the additional printing and supply of 400,000 units of the stickers at the sum of N50 per unit was even canceled by the Board due to some observed irregularities."
This, according to him, "was done shortly before the dissolution of the boards of all government companies and parastatals."
In addition, the meeting faulted Bailey for making 100 per cent advance payment to Rocstone at N50 per sticker arguing that the "approach was very not procedural.
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