House to Investigate Alleged N19bn Railway Contract Awarded to Unknown Company


By Udora Orizu

The House of Representatives yesterday resolved set up an Adhoc Committee to investigate the N19.2 billion railway rehabilitation contract awarded in March 2011 to a contracting company which was allegedly not in existence.

The resolution followed the unanimous adoption of a motion of urgent national importance, sponsored by the Minority Leader, Hon. Ndudi Elumelu.

Moving the motion, Elumelu noted that Eser contracting and industry company incorporated was awarded the contract to rehabilitate the 463km Port Harcourt – Makurdi section of the eastern railway line for N19.2 billion in March 2011.

He explained that the railway rehabilitation work was divided into three sections namely, 463km port Harcourt- makurdi track, 1016km makurdi -kuru track and 640km kuru – maiduguri track and the three sections were awarded to three different companies.

He said that there are allegations that while carrying out due diligence on Eser company, it was discovered that the company was not in existence as it was not duly registered with the corporate affairs commission as required by the procurement act neither did it have the required tax clearance nor audited statement of account for the preceding three years and therefore had no legal capacity to do business in Nigeria.

He expressed concerns that the Bureau for Public Procurement (BPP) which is charged with the responsibilities of preventing fraudulent and unfair procurement failed in it’s responsibility by issuing a certificate of No Objection to clear the way for the railway corporation to award a job of such magnitude to a company without any legal status.

According to Elumelu, the then minister of transportation Yusuf sulaiman relied on this certificate issued by the BPP in requesting for approval for the award of the contract from the federal executive council then led by president Goodluck Jonathan.

Elumelu said, ‘’Aware that in the invitation to bid advert for the contract placed in the November-December 2010 edition of the federal tenders journal, the certificate of incorporation was a major requirement listed as one of the criteria needed to bid for the job, but surprisingly the railway corporation, the bureau for public procurement and the presidency, all brushed aside this requirement in the consideration of Eser contracting and industry company incorporated for the job.

‘’Worried that after the contract was awarded in March 2011, the promoters of Eser contracting and industry company incorporated, knowing that they have deceitfully gotten the contract devised a way to smoothen the irregularities by registering Eser west Africa limited in June 2011, three months after the contract had been awarded and the new company continued dealing with present day government officials without any form of questioning on the sudden change of name.

‘’Disturbed that the contract is now considered failed and abandoned and there are allegations that the government have gone far with plans to re-award the job to another company without certainties that anyone will be made accountable for the regulatory failures and corporate fraud that characterized the charade. Also disturbed that if these consistent abuse of procurement laws and incessant corrupt practices by government agents are not put to check, it will continue to ridicule the fight against corruption as canvassed by Mr president and the country brought to disrepute amongst sister nations.’’

Adopting the motion, the House said the adhoc Committee will report back to it in four weeks for further legislative action.