MDA

Niger Delta Development Commission (NDDC)

Project Location/State

N/A State

Award Year

2012

Contract Sum

₦6b

Amount Paid

₦268.8m

Unaccounted

₦268.8m

Context/Observation

The Commission awarded the above contract at a sum of N6,062,172,454.15 to Messer Japaul Mines & Product Ltd with a contract Ref No NDDC/EDP/EDO/PR/012/0023 dated April 20, 2012. The contract was expected to be completed in eighty-six (86) weeks from the date of mobilization. The following anomalies were observed;
There was no evidence of due process carried out in the selection and award of this contract; no evidence of any advert placement on National Dailies, no bidding submitted by competitors, no prequalification and evaluations of bids were carried out etc. Thus, this award contravenes the PPA 2007 & FR 2921 which requires that “all contractors/ suppliers shall be subjected to the same level playing field”.
Approval of the Contract sum of N6,062,172,454.15 was above the Parastatals Tenders Board approval threshold which requires the BPP certificate of ‘No objection’ and approval of the Federal Executive Council before such contracts can be awarded. Consequently, it violates PPA 2007 & FR section 2906 & 3116.
Audit enquiry and project inspection visit in February 2019 revealed that the contractor has stopped working on site more than two (2) years ago despite a whooping sum of N268,895,797.59 being paid to the contractor on March 22, 2018. All efforts made by the Audit Team to meet the contractor and/ or obtain explanation as to why he stopped working on site proved abortive.
The provisional sum of N148,650,000.00 was paid to the contractor as at 22nd March, 2018 for the procurement of three (3) Toyota Hilux project vehicles and compensation of all structures and economic trees affected by the execution of the project. As at the time of the inspection visit, the contractor has not procured the project vehicles and neither was the purported compensation paid. It was observed that the Udo – Ofunama road is an existing road; thus, there was no need for such payment of compensation to the contractor.
The contract was awarded on April 20, 2012 with completion period of eighty-six (86) weeks from the date the mobilization fee was paid but for no justification the contract was still at 35% stage of completion as at the time of inspection visit in February, 2019. It was observed that the Management of the Commission and the contractor are responsible for this unwarranted delay.

Risk
Noncompliance to due process: There is a risk of absence of adherence to government rules as regards due process in procurement. Absence of due process may lead to poor job execution/performance, project delay, related party transactions, poor job delivery, and project abandonment, non-execution of jobs and loss of public funds.

Recommendations
The Management should explain why this contract was awarded without due process and why the contractor has not returned to site despite the payment of ₦268,895,797.59 on March 22, 2018.
The contractor should be made to account for the sum of ₦268,895,797.59 which included ₦148,650,000.00 for purchase of three (3) project vehicles as well as compensation for road already in existence.

Contractor

MESSRS JAPAUL MINES & PRODUCT LTD

Beneficial Ownership Information

N/A

Legislative Recommendation

N/A

Executive Action

N/A

Progress Report

N/A

Data Source

2013-2018 Audit Report on NDDC

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