A Review of the Nigerian Energy Industry

Nigeria: Controversy over N30bn NLNG contract


27 July 2015, Abuja – Controversy seems to be trailing the award of a contract for the Liquefied Petroleum Gas (LPG) Vessel for domestic LPG Operation worth $150million (about N30billion) by the Nigerian Liquefied Petroleum Gas (NLNG) Ltd.

An indigenous firm, A.G. Butler Nigeria Ltd, which claimed to have won the contract, is accusing the NLNG management of denying it the offer and allegedly planning to award same contract to a foreign firm, thereby breaching the provisions of the Nigerian Content Act.

The indigenous firm, in a petition to the executive secretary of the Nigeria Content Development and Monitoring Board (NCDMB), a copy of which was obtained by LEADERSHIP, said it passed through all the processes to emerge top among other 11 companies that bid for the contract.

The petition, dated February 14, 2015, stated that the indigenous firm got all the clarifications from the management of NLNG to prove that it won the contract and was awaiting the award of the contract which was scheduled for end of June or early July 2015, before it got information that the same contract had been awarded to a foreign firm.

LEADERSHIP gathered that the said foreign firm was not part of the 12 firms that bid for the contract.

The petition reads in part: “We wish to register our complaint with respect to the above stated tender which NLNG invited Nigerian companies to bid, and after going through all the rigours of the tendering process, NLNG declined awarding the contract to an indigenous Nigerian company. We have been reliably informed that the above referenced tender has been awarded to a foreign company, contrary to the provision of the Nigerian Content Act.

“It will be recalled that on the 14/11/2014, NLNG sent out ITT for the charter of LPG Vessel for domestic LPG Operations to Nigerian companies. Following the receipt of this tender, NLNG again invited these Nigerian Companies for (2) pretender clarification meeting. This meeting was held on the 24/11/2014 in Port-Harcourt and was attended by 12 Nigerian companies.

“After the pre-tender clarification meeting, technical bids were submitted accordingly on or before the close of business of 09/01/2015. Prior to the technical submission, NLNG informed bidders that only tenderers are adjudged to be technically capable will be invited to submit their commercial bid.

“On the 10/04/2015, five remaining companies were invited for a commercial pre-tender meeting. The commercial tender was submitted on the 28/04/2015. The commercial tenders were evaluated and A.G. Butler came top. Following this, on May 5, 2015 & May 12, 2015, etc, several clarification mails were resent to A.G. Butler which was promptly attended to.

“While A. G. Butler is awaiting the award of the contract which was scheduled for end of June or early July 2015, information reaching us is to the effect that the whole process has been subverted and the contract awarded to a foreign company, which violates both Nigerian Content and Cabotage Acts.

“It is in the light of the aforementioned that we humbly request your intervention to restore normality to the entire process and let the outcome of the competitive bid take its effect. We believe that you will use your good offices to correct this aberration and abnormality being perpetrated by NLNG.”

When contacted, the manager, Communications and Public Affairs, NLNG, Tony Okonedo, denied the allegation by the indigenous firm, A.G. Butler Nigeria Ltd – that the contract has been awarded to a foreign firm, saying the process for the award of the said contract was still in motion.

Okonedo said, “Let them provide whatever evidence to show that a contract has been awarded. According to them, the contract was later given to a foreign company. I have made enquiries with my people in Bonny. There is no foreign company involved in that bid, and that tender process is still in motion.

“So, if they have any document relating to the award of the contract to a foreign firm, let them produce the evidence.”

He wondered why the indigenous firm would not be patient enough to wait for the outcome of their petition to the NCDMB before going to the press.

“Petition is something anybody can do; it may have merit or may not have merit. If they have written a petition to NCDMB, why can’t they wait for the NCDMB to respond it?” he asked.
*Anayo Onukwugha – Leadership

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