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N30bn Channel Contract: National Assembly Flays NPA

30 Nov 2012

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 Senator Zainab Kure


John Iwori


The National Assembly has flayed the Nigerian Ports Authority (NPA) for awarding N30 billion contract for the management of the two main channels of vessels entry into Nigerian territorial waters.

Called Lagos and Bonny channels, the two channels serve as the entry and exit points into Nigerian ports situated in the Western and Eastern parts of the country.

It questioned NPA for not adhering to transparency and due process in the award of N15 billion each for the two channel management companies, namely Lagos Channels Management Company Limited (LCM) and Bonny Channel Management Company Limited (BCM).
The two firms are owned by NPA in conjunction with some private individuals on a 60:40 equity participation.

Most of the dredging equipments used by the two firms for their operations were procured by NPA and given to them some years ago.

The National Assembly expressed displeasure over the way the contracts for the two channels were awarded when members of the Senate Committee on Marine Transport led by its Chairman, Senator Zainab Kure, visited NPA House, the corporate headquarters of the authority in Marina, Lagos as part of its oversight functions.

Members of the committee, who had earlier this year paid a similar visit to the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Shippers Council (NSC), took turns to question NPA over the award of the contract, which will gulp over N30 billion from the central till.

A member of the committee, Senator Ben Ayade, specifically picked holes in the award of the contract, pointing out that it did not follow laid-down rules and regulations. According to him, the contracts were awarded in defiance to relevant provisions of the Public Procurement Act.
Ayade’s position was sequel to a slide presentation by the Managing Director of NPA, Alhaji Habib Abdullahi. He observed that the two companies awarded channel maintenance contracts to the tune of N15 billion each, which he described as insider abuse. He argued that NPA was awarding contracts to itself without due process.

His words: “In law, what you are doing is just insider abuse because you would be awarding contract to companies you have 60 per cent equity participation, which runs afoul of the provisions of the Public Procurement Act. I would also want the managing director to tell us the value and method of payment to NPA by these channels management companies for its 60 per cent equity shareholding because from what you told us, the vessels used by the two firms belong to the authority”.

Members of the committee also questioned NPA over the award of 2.3Kilometre road for N1billion which they noted was outrageous.

According to Ayade, the Niger Delta Development Commission (NDDC), which quoted the highest figures in terms of such construction contracts, could not have spent a whopping N1 billion on a 1.6 kilometre road.

Abdullahi, who tried unsuccessfully to provide answers to the questions, told the legislators that he was reluctant to disclose official secrets in the presence of journalists who were on ground to cover the visit.

He however pledged that in as much as he was not trying to hide information from the senators, he would at the appropriate time avail the committee with relevant information to enable it perform its constitutional duties.

Kure had earlier told Abdullahi and his management team that the visit was in line with the National Assembly’s constitutional oversight functions on NPA.

She had noted that after appropriation, it was proper that the committee knows how the funds allocated to each agency had been spent, which would determine what the lawmakers will do when next such agency comes with its budget proposal.

Tags: Business, Nigeria, Featured, N30bn, Contract, National Assembly, NPA

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