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Nigeria`s Senate was stunned on
Tuesday as Senator Anyim Ude presented the report of
his Committee which conducted an
investigation into the now controversial N19.5billion
aviation intervention fund.The fund was released by the
regime of former President Olusegun Obasanjo in response
to the air mishaps that gripped Nigeria.But rather than
solve the fundamental problems afflicting the aviation
sector, the committee`s findings revealed that the
funds were mindlessly looted
Hear Senator Ude as he presented the
report today :“The Intervention Fund was
regarded by some officers as a Christmas Turkey which
was provided for people to help themselves. Four
Ministerial Committees were wrongly funded from the
Intervention Fund to the tune of N69, 512,800.
He said that “These committees
include Ticketing and Pricing on International Routes;
Aviation Fuel Monitoring Committee and Committee for the
Investigation of FAAN Agreement for the Supply,
Installation, Management and Joint Holding Maevis Ltd.
The money (N69, 512,800) has since been fully refunded
to the Intervention Fund Account as the fund was not for
the purpose of funding routine Ministerial Committees.
MORE REVELATIONS FROM
UDEH ON VARIOUS ISSUES:
“Consultancy for Perimetre
Fencing:
The contract was advertised by the
Ministry of Aviation and the sum of N506, 328,337.59
approved for payment by the former Minister, Prof.
Babalola Borisade. It was released from the Intervention
Fund as professional fees for Consultancy services for
fencing of Ilorin , Kano , Port Harcourt , Abuja and
Murtala Muhammed Int’l Airport , Lagos . Cheques were
written but payment was later stopped because due
process was not followed and above all the contract was
handled before 2006 and, therefore, outside the ambit of
the Intervention Fund. The money was first credited to
FAAN account and used in the payment of staff salaries
but later refunded and paid into Intervention Fund
Account.
“Companies with Low Share Capital:
That most of the companies awarded
contracts by the Ministry of Aviation and FAAN were
those with low share capital of between N20, 000.00 to
N500, 000.00. They were awarded contracts ranging from
N50 million to N100 million and above which is against
the Law. Examples of such companies include:
Companies
Share
Capital
Value of Contract
(i)
Avsatel Comms.
Ltd
N10m
N6.5b
(ii)
ADB Airport Lighting
Systems
Ltd
N1m
N920m
(iii)
Belform Nig. Ltd
N1m
N725,546,426.00
(iv)
Almonds Nig
Ld
N1m
N145m
(v)
Smarribs
Ltd
N250,000
N50,685,726.35
(vi)
Proxy-U Nig. Ltd
N200,000
N50,358,066.32
(vii)
Umco Royal
Links
N500,000
N50,261,211.00
(viii)
High Grade Tech
Ltd
N500,000
N49,658,000.00
(ix)
Valca Builders
Ltd
N1m
N48,116,112.56
(x)
Abhal
Ventures
N1m
N45,927,000.00
(xi)
Neregroma Nig.
Ltd
N100,000
N44,533,528.42
(xii)
M/s U-Ess & Part. Ltd
N1m
N37,426,533.00
(xiii)
United Prefab
N50,000
N29,190,500.00
(xiv)
Vindotco W/A Ltd
N1m
N27,975,700.00
(xv)
Rockefeller Const. Ltd
N400,000
N21,535,266.32
(xvi)
Remiss Inv.
Ltd
N500,000
N22,825,686.31
(xvii)
Endev Ass.
Ltd
N200,000
N20,371,929.48
(xviii) Jelroi Merchants
Ltd
N1m
N20,785,612.50
(xix)
Batec
Ltd
N5,000
N16,805,000.00
(xx)
Jimmy Nig.
Ltd
N80,000
N14,000,648.00
The 20 companies have a combined
share capital of less than N21million but they were
given combined contracts worth about N10 billion.
Absence of Delay Clauses or
Non-Invocation of Same:
1. That
in most of the contracts awarded by FAAN, there were no
delay clauses and where there were both the Ministry of
Aviation and FAAN seemed unwilling to invoke the clause.
The implication was that defaulting Contractors could
not be penalised for non-performance. That was a
dereliction of duty on the part of the Legal Department
of FAAN;
N2 billion from Rivers State
Government:
2. That M/s
Julius Berger Nig Ltd was awarded a contract of N1.5
billion for the Asphalt resurfacing of the Port Harcourt
Int’l Airport Runway 03/21. The contract was
satisfactorily completed and payments made by FAAN from
the said Rivers State fund;
3. That N200
million of the said N2 billion from Rivers State
Government was used in the rehabilitation work at the
Military Airport in Port Harcourt . The rehabilitation
work has been completed and paid for;
4. That the
sum of N170 million was used for consultancy work at the
Port Harcourt Airport . Out of the N2 billion River
State funds, a balance of about N130 million is in a
dedicated FAAN account;
Additional
Findings/Observations:
5. That FAAN
is top-heavy with 94 Assistant General Managers (AGMs),
30 Deputy General Managers (DGMs), 26 General Managers
(GMs). In one section, a GM has only two personnel in
what was called a department;
6. That there
is no co-ordinated and Joint Security Command at Nigeria
’s Airport;
7. That
Aviation Parastatals are suffering from stunted growth
because of corruption and extreme Ministerial
interference (political and bureaucratic) leading to
administrative inconsistencies, long delays in approving
proposals/requests for reasons that sometimes wear
selfish colouration, instability, low performance and
low revenue generation. Such interference is not good
for organisations that deal with human lives requiring
timely decisions/actions and the observance of
international standards.
An example of political interference
is the instability in the industry arising from frequent
changes in the appointment of Chief Executives of these
Parastatals – FAAN had 5 Chief Executives in 5 years,
most of them non-professionals from outside the Aviation
Industry;
8. The N19.5
billion released in 2006 for the development and
rehabilitation of aviation infrastructure did not impact
positively on the Aviation Industry as a result of
corruption, poor performance and lack of selfless
leadership;
9. All
Aviation Unions expressed serious concerns on the issues
of concessioning of Airports, Ministerial interference,
infiltration and employment of foreigners by Domestic
Airlines, movement of headquarters to Abuja , welfare
and security matters.
The Committee informed them that
although some of those issues were important, they fell
outside its mandate;
10.
That the Federal Government’s contribution of N11
billion loan was withdrawn en-block from FAAN’s 2007
Capital expenditure allocation and returned to the
Federal Government Treasury thereby crippling the
operations of the Parastatal. That action raised the
question: Did the Federal Government in any real sense
give any intervention fund to the Aviation Sector? The
same applied to the N6.5 billion loan from Commercial
Banks at very high interest rates which had crippling
effects on FAAN when there were idle funds in BASA
account with the CBN (put at N47 billion at the time).
That would not have attracted any interest.
SHOCKING SUSPENSION OF
PROCEEDINGS
In the face of these staggering
revelations, the Senate President David Mark suspended
deliberations on Ude`s report. Ude had read out
his committee`s findings and was about to reel out
the committee`s recommendations when Mark stopped him in
his tracks.The Senate President said “My
suggestion will be that we read this report because
there are technical issues I raised with Ayim Ude. ..And
I also wanted clarification on very serious technical
issues so that we’ll be properly guided. Then I’ll
explain that before we get to the recommendations.”
After stopping Ude, a closed door
session of the senate was held to further
deliberate on theissues. Ayogu Eze, spokesman of
the senate addressed the press afterwards.
According to Eze “You have seen that we have taken the
report in the open today and nothing was held back.
..The only thing that we had to reconsider was some of
the recommendations in the Committee’s report which are
likely to prejudice the outcome of the judicial process
that has been instituted against some of the actors that
are mentioned in person in the report.
He added:“And you know in our rule
book, anything that is likely to affect the outcome of
the judicial process one way or the other, we are
mindful of it and we are enjoined by our rule to avoid
it. I am sure that we have also given this matter to our
legal experts who are supposed to isolate issues that
are likely to prejudice the judgment of the proceeding
in court and then of course, we will return to the
matter and take the conclusion and the resolution
tomorrow(Wednesday).”
He laboured to explain the
difference between this report and that which probed and
indicted Nasir el rufai, former minister of the Federal
Capital.According to Eze, in the case of the FCT,
elrufai went to Court to stop the debate of the report ;
but in this particular case the dramatis personae
are already being tried in court ,of course by the
Economic and Financial Crimes Commission,EFCC.Perhaps
the senate may be treading carefully to avoid
unnecessary duplication of the case so that the
people involved do not suffer double jeopardy.But
all this may not explain the sudden resort by the senate
to a closed door session.
Meanwhile ,two former Minister of
Aviation Babalola Borishade and Femi Fani Kayode among
others are known to have been dragged to court already
by the EFCC over the N19.5 billion scam.
NEWSDIARYONLINE`S EARLIER
REPORT :
Exclusive:SHOCKING DETAILS OF THE
REPORT BY SENATE COMMITTEE ON THE CONTROVERSIAL
N19.5 BILLION AVIATION FUND
.COMMITEE URGES EFCC AND POLICE TO
PROSECUTE BORISADE, IYAYI AND AVSATEL
..
RECOMMENDS NOTHING AGAINST
FANI KAYODE
BY DANLAMI
NMODU Posted Tuesday
Nov.4,2008
A report by the Senate
Committee that conducted an investigation into the N19.5
billion aviation intervention fund has been scooped by
Newsdiaryonline.The report which was written in
July 2008 is titled:``THE SENATE, FEDERAL REPUBLIC OF
NIGERIA,REPORT OF THE COMMITTEE ON AVIATION
Investigative Public Hearing into the sources and
utilization of the N19.5 Billion Federal Government
Intervention Fund for infrastructure in the aviation
sector and N2billion Loan/Grant from Rivers state
Government for PortHarcourt Airports.``
The report uncovered several untoward
acts with respect to the N6.5billion Safe Tower
Project.It may not be surprising that its shocking
findings led it to recommend drastic measures against
key officials of government.The report made eleven
recommendations which began with an indictment of
Professor Babalola Borishade, the former Minister of
Aviation,,Captain Roland Iyayi, former MD of NAMA and
the contractor that ,Avsatel which executed
the safe Tower project.
The report recommended among others
that ``The senate should urge the EFCC and the Police to
take necessary steps to recover the sum of N4.5billion
being inflated cost of the safe Tower Project from the
former Minister of Aviation, Prof.Babalola,the former
Managing Director of NAMA Capt.Roland Iyayi and the
Contractor ,Avsatel Nig.Ltd which executed the project
and prosecute them accordingly``.The Committee
which has Senator Anyim Ude as chairman also recommended
that ``the Federal Government should set up a contract
review panel to review all the contracts
awarded with the Intervention Fund with a view to
recovering all monies on inflated contracts and
prosecuting guilty ones while settling legitimate
outstanding payments to ensure that all the
contracts properly awarded are completed within a
prescribed period in the interest of air safety.
The recommendation listed No 4
has several subdivisions.It states inter alia that the
Federal Government should specifically ensure ``That the
N1.2billion for MMA runway extension is not released to
M/S PW Nig.Ltd until due process and Federal Executive
Council pproval is received for the proposed taxiway
job.The Minister of state (Air ) should take steps to
enure a legal cancellation of the extension
part of the contract through an addendum to the contract
or any other means as may be advised by the legal
department of both the Ministry and FAAN.``
It also recommended that
``The Federal Ministry Of Transportation should
set up a committee to review all severance payments to
former staff of FAAN with a view to ascertaining the
status of individual beneficiaries , resolving
duplications in payments and unmasking the beneficiaries
suspected to be ghost workers who were paid a
whooping(sic) sum of N7,773376.07``.It adds,
``That the objective of the severance
exercise in FAAN was defeated by subsequent
recruitments leading to a bloated workforce
including 26GMs, 30DGMs and 94 AGMs attracting a
monthly salary of about N700million.The situation should
be revisited by the committee recommended in 5 above
with a view to proper rightsizing in the
organization which is on the verge of collapse``
The investigative committee
came into being after Anyim Ude,chairman the
senate committee on aviation presented to the
senate in plenary the report of its investigation
on the poor state of safety in our airports.One of its
recommendations was a call for a mandate from the senate
to carry out public hearing into the N19.5billion
fund.The adoption of the recommendation gave rise to the
investigative hearing by the senate committee on
aviation.The comiittee members includeUde, chairman,
Bala Mohammed, vice chairman, Grace Folashade Bent,Umaru
Dahiru, Ikechukwu Obiorah, Gyang Dantong, Gbemisola
Saraki, Kawu Dukku, Iyiola Omisore ,Nicholas
Ugbane,Mujitaba Mohammed ,all members and Victor
Aborishade as secretary.
Details of the findings of the
Committee are more shocking.The committee established
that the total sum of the intervention fund was N21.5
after adding the N2billion released by the Peter Odili
government in Rivers State.Out of this amount,
N6.5billion was sourced through bank loan;the N2billion
FAAN severance benefits and FAAN intervention at
four airports were sourced from FGN Natural Resources
Account while N2 billion came from Rivers State
government for FAAN infrastructure at PortHarcourt
Airport.
The committee noted among
its findings ``That the N6.5billion Tower project was
awarded through selective tendering process(not
advertised and not competed for).That the N6.5billion
Tower project had no Bill of Quantities or a detailed
listing of with specifications of items to be delivered
by the contractor. That the company that operated as
consultant did the survey, determined the scope of work
and fixed the contract price was the same company that
was awarded the contract.That the company is Avsatel
Communications Ltd G.E.S.M of Austria.`` The
report which said the safe Tower project
contract of N6.5billion was awarded during
the tenure of Borihade also noted ``that the
highest quotation received by the technical
consultant to the Senate committee on aviation during
the investigation for the same Towers from both Viasala
and Frequenties, the same manufactures and other
companies was N1.5billion at N100% mark-up``
According to the report, the
disbursement of N2billion severance benefits for
disengaged staff of FAAN started during the tenure of
Borisade but it was completed by Femi Fani
-Kayode..It was revealed that 23 names were duplicated
amounting to N58,332,763.22. It was also revealed in the
report that`` 5 staff were without files and are
suspected to be ghost workers who were paid
N7,773,376.07``
The report also said that N11.O
billion which came from the Natural resources
account was used by FAAN for various
infrastructural development.Out of N11.0 billion,
contracts worth N5.3 billion were awarded
during he tenure of Femi Fani Kayode as minister of
aviation.But the report seen by Newsdiaryonline
did not recommend any action against
Fani-Kayode..
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