•As Senate summons FCT minister, Due Process over N22bn inflated contract
Written by Jacob Segun Olatunji, Kolawole Daniel and Ayodele Adesanmi, AbujaThursday, 03 November 2011
THE House of Representatives, on Wednesday, put machinery in motion to investigate the sources of funds being used as bailout for troubled banks
and other government institutions by the Central Bank of Nigeria (CBN), and the Asset Management Corporation of Nigeria (AMCON), to the tune of N1.42 trillion without recourse to the National Assembly.
This is coming just as the House advised President Goodluck Jonathan to ensure that the budget estimates of the CBN and other government establishments listed in the Fiscal Responsibility Act 2007 were incorporated into the 2012 Appropriation Bill due to be submitted to the National Assembly any time from now.
This was sequel to a motion moved by Honourable Uzoma Nkem-Abonta, entitled “expenditure of public funds by the Central Bank of Nigeria (CBN) and the Asset Management Corporation of Nigeria (AMCON) without approval.”
Leading debate on the motion, Honourable Nkem-Abonta said the CBN, in its bid to rescue some ailing commercial banks, doled out N620 billion to the institutions, while another N500 billion was given to private manufacturers and N200 billion to the textile sector, adding that the same gesture was extended to the aviation, power and entertainment sectors.
According to him, over 30 Federal Government-owned institutions, including the CBN, NNPC and NPA, were required by the Act to lay their annual revenue and expenditure estimates before the National Assembly for approval, lamenting that “this has never been complied with, in spite of repeated threats by both chambers.”
He added that it appeared the institutions were deviating from their primary responsibilities, adding that even if it was necessary to use public funds for such interventions, they must be appropriated in line with the provisions of the constitution.
While expressing concerns over the CBN bailout of banks, he noted that AMCON had, in collaboration with the Nigeria Deposit Insurance Corporation (NDIC), dished out another N679 billion to recapitalise the same rescued banks, adding that another N821 billion was earmarked for the rescue of more banks by AMCON as it announced, with more than N3 trillion in the pipeline for bailout.
The lawmaker further alleged that the CBN had used public funds to acquire a property in the Federal Capital Territory (FCT) for the purpose of investing in the hospitality sector, as well as property business, a development he noted was in clear contravention of the BOFI Act.
Consequently, the House mandated its Committee on Banking and Currency to investigate both the CBN and AMCON over the transactions, with a view to finding out how those funds were sourced by the organisations.
The need for President Jonathan to comply with the Fiscal Responsibility Act 2007 while presenting the 2012 appropriation bill to the National Assembly was marshalled by the House during the presentation of the report of its joint committee on finance, appropriations, legislative budget and research and national planning and economic development.
Laying the report before the House, the chairman of the Committee on Appropriation, Honourable John Enoh, said the 2012-2015 Medium Term Expenditure Framework (MTEF), which put the 2012 aggregate expenditure at N4.7 trillion, did not have the revenue and expenditure estimates of the CBN, NNPC, FIRS and other establishments as required by the Fiscal Responsibility Act.
Meanwhile, the Senate Committee on Federal Capital Territory (FCT) was astounded, on Wednesday, when it discovered that a N11.769 billion water contract was reviewed upward to the tune of N22.8 billion.
The contract was awarded to Sarplast West Africa Water Engineering firm in 2006 to construct Tank one and six and associate trunk mains, with the laying of pipes at the sum of N11.769 billion. Each of the tanks, when completed, would have the capacity to store 40,000 litres of water.
The contract, at a 30 per cent level of completion, was reviewed upward by 100 per cent from N11.769 billion to N22.8 billion.
The Managing Director of the company, Mr John Ewere, said so far, he had received N6.7 billion out of the contract sum, which to the committee said was not commensurate with the level of work done.
He added that the upward review of the contract sum was approved and passed through due process.
It was also discovered that inferior pipes, which had earlier been rejected by the same committee in the sixth Senate, were put to use for the project by the contractor.
The Senate committee, during an oversight tour, summoned the Minister of FCT, Senator Bala Moha-mmed; Director-General of Due Process; Comptroller-General of Customs, and the Director of Engineering to appear before it and defend what it called “unprecedented review.“
The chairman of the committee, Senator Smart Ade-yemi, told newsmen during the visit that “it was purely misappropriation and misapplication of funds, adding that they must all come to justify the 100 per cent review.
SOURCE: Nigerian Tribune Newspaper, 3 November 2011. http://www.tribune.com.ng/index.php
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