NDDC Cancels 600 Contracts Worth N200bn

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  • Vows to prosecute defaulting contractors, banks

Ernest Chinwo in Port Harcourt

The Niger Delta Development Commission (NDDC) has said it has cancelled over 600 contracts worth more than N200 billion, in its efforts to streamline the procurement processes in the commission.

The commission also said it would prosecute contractors who abandoned its projects after collecting advance payments, as well as commercial banks that issued advance payment guarantee for the defaulting contractors.

Addressing journalists at the commission’s office in Port Harcourt yesterday, Managing Director of NDDC, Nsima Ekere, said the commission discovered irregularities in the cancelled contracts.

He said the commission was also working with the Presidency to arrest and prosecute the defaulting contractors and the commercial banks that provided guarantees for the contractors.

His words: “We are determined to go after all the contractors who got money from the NDDC and abandoned their projects. We are not going after the contractors only, but we are going after the banks they issued the advance payment guarantee. We have already recovered about N60 million from the banks.

“We have a committee that we set up that is working on it to identify all NDDC funds that are in the hands of contractors and projects have not been executed to match those funds that have been paid out. We will recover those monies and put them back in the system and then, prosecute the contractors involved. We are working with the Office of Mr. President on the prosecution of these defaulting contractors.”

He emphasised that the commission had to cancel the 600 contracts as part of its efforts to restructure the NDDC balance sheet.
The NDDC boss said, “So, the process and system of running the NDDC must be properly reformed so that it can run efficiently and deliver efficiently. We said we must restructure our balance sheet. The NDDC balance sheet is presently over-bloated, we have contingent liability in excess of N1.3 trillion.

“Therefore, there is the need to look at the resources of the commission, whatever the receivables that come on monthly and yearly basis is and then reform that balance sheet so that it can become more meaningful and achievable.

“One of steps we have taken already and we have already done this, at the last management meeting, we approved the cancellation of over 600 projects that the NDDC already procured. We discovered that those projects, some of those contracts were either not properly procured, some of them were procured while the contractors have not gone to site and some of them are as late as 2001.

“Surprisingly and sadly also, some of the contractors already have collected advance payments from the commission and yet zero work has been done on site. So, we terminated those contracts worth about N200 billion.”

He expressed regret that in the past some of the contracts were awarded strictly for political reasons or patronage.
He said the commission, under the present management and board, was determined to return to the Niger Delta Regional Development Master Plan to ensure that projects impacted positively on the people.

He however pointed out that the Master Plan was not an entirely NDDC affair as other stakeholders like states, local governments, international oil companies (IOCs) also have roles to play.

“So, we need to go back to the core mandate of the NDDC. We will concentrate less on smaller projects and more on bigger projects,” he said.