A Review of the Nigerian Energy Industry

N1.1bn contract scandal rocks PTI

*Auditor-General orders contractor to refund money immediately

Emma Amaize

02 August 2012,Sweetcrude, WARRI – AN alleged contract scam of N1.1 billion involving the supply of a Dive Support Sea -Going Vessel has been uncovered at the Federal Government-owned Petroleum Training Institute, PTI, Effurun, near Warri, in Delta State.

Top officials of the Federal Ministry of Petroleum Resources were said to have conspired with a contractor in the rip-off .

Meantime, the Auditor-General of the Federation has recommended that “the contractor should refund the amount of one billion, one hundred and thirty thousand, eight hundred and seventy-three Naira, thirty-one Kobo (N1, 117, 330, and 873. 31)”.

He said the money should be refunded “with interest to the Federal Government of Nigeria immediately.”

The Auditor-General of the Federation, in a report, exclusively obtained by Sweetcrude, said of the swindle: “On the project, there were no records such as payment vouchers and project file maintained, as required by government accounting procedure.”

Sweetcrude gathered that the Federal Government awarded a contract of N1, 117, 330, 873. 31 inclusive of VAT to a Lagos-based company in 2009 to supply the vessel in six months, but two and a half years after the contract was supposed to have been executed, none has been supplied, whereas the entire contract sum of N1, 117, 330, 873. 31 had been paid to the contractor.

Our source said a formal contract agreement with the contractor was entered, July 21, 2009, with the Federal Ministry of Petroleum Resources and that some top officials of the ministry allegedly colluded with the contractor to defraud the government.

In a report, entitled, “Report on the Monitoring and Evaluation of Capital Projects/Programmes executed by Petroleum Training Institute, Effurun, Warri: 2008-2011”, signed by the Director, Programme and Performance, Audit Department, Office of the Auditor General of the Federation, A.O. Ajao, the Auditor-General said, inter alia:

“Article 4, sub section (iii) of the contract agreement states that 25 per cent of the contract sum, inclusive of VAT, shall be paid to the contractor upon the arrival and berthing of the vessel in a designated port in Nigeria.

“Despite this, the total sum of N1, 117, 330, 873. 31 was fully paid to the contractor as at December 2010, whereas there was no evidence to show that the Dive Support Sea-Going Vessel had been supplied as contracted.

“In conclusion, it is clear that the government has not been given value in return for the sum paid for acquisition of the vessel, thus the laudable objective has not been achieved.”

According to the Auditor-General’s report, “In order to enhance the capacity training of the institute (PTI), in the oil and gas sector, with emphasis on higher class deep sea diving training, the Federal Executive Council at its meeting of 10 June, 2009, approved the award of contract for the acquisition of a dive support sea-going vessel in the sum of N1, 117, 330, 873.31 , VAT inclusive to the said company.

“The contract was to be executed within six months of the date of signing the agreement. The Federal Ministry of Petroleum Resources conveyed the award of the contract to the supplier vide a letter dated June 24, 2009.”

Investigations by Sweetcrude at the Federal Ministry of Petroleum Resources, Abuja, showed that some powerful officials had been covering the financial scandal until some months ago, when a team from the Programme and Performance, Audit Department of the Office of the Auditor-General exposed the fraud.

It was discovered that some civil servants were cajoled to authorise payment of N1.1 billion in different installments for the contract that was not executed by the powerful officials in the ministry.

The contractor claimed at various stages of the contract sting that he had acquired the vessel, but it was held up outside the country for some reasons, and later asked for money to sort out the issues, but in all, the vessel was never supplied, while the total contract sum was paid in violation of the terms of the contract.

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  2. Obinna Onuigbo via Facebook Reply

    All is not well that does not end well.without major field equipment,do we call graduates from this tranning professional divers?greatest PTI!