– As hearing begins in Port Harcourt over contract crisis
Mkpoikana Udoma
Port Harcourt — A Professor of Forensic Accounting has told the Rivers State High Court sitting in Port Harcourt how the Nigeria LNG Limited, NLNG, came about owing N5.074Billion to an indigenous contractor, Macobarb International Limited.
The expert, Prof Yohanna Jugu, Senior Partner at W.J Jugu & Co, Jos, told Justice Chinwendu Nwogu that he (the expert) worked out the indebtedness from the contract document and performance history of number B130142PPI (Access control contract) awarded by the NLNG to Macobarb in 2014.
Prof Jugu also told the court that he relied on Sections 2, 7, 8 & 9 of the contract to calculate the liabilities creditable to Macobarb by the NLNG. He also noted that Section 9 is the Macobarb Bill of Quantities.
He further agreed with the defence counsel who read out the content of Section 7, subsections: 5.11, 12.4, 13.2 thus: “If, because of any failure or inability of the engineer, the Company’s Representative and/or the Company to issue within a time reasonable in all the circumstances any drawing, instruction, approval or the like for which notice has been given by the Contractor, the Contractor suffers delay and/or incurs costs, then the time for the execution of the works shall be extended accordingly and the amount of such costs shall be added to the Contract Sum”.
He also agreed when the lead Defence Counsel, Prof Bayo Adaralegbe, read out Subsection 12.4 to show that any inferior materials or items supplied by the contractor shall be at the contractor’s account.
“Such costs shall include any standing time for pending delivery of acceptable Plant/equipment/tools/vehicles. Where Contractor’s program for the Work is delayed as a result, the Contractor shall provide additional resources to recover the time lost so as not to delay the stage completion date/s for the works”.
This was interpreted to mean that whichever side caused a delay of the job shall pay the added cost. The witness said this was the provision he relied on to calculate the cost of delays caused by the NLNG. The statement he submitted and affirmed in court indicated that the only standing time not provided for in the EPC Contract is on engineering design because, he said, it is elementary in design.
The Defence Counsel, Prof. Bayo Adaralegbe drilled the witness for hours and asked him (the expert witness) if he was aware that the contract was terminated sometime in November 2015. He answered that he saw document like that but that when he asked his client (Macobarb), they informed him that the termination was a breach in the sense that the ‘Contract Holder’ was the one to have terminated the contract.
Adaralegbe pinned the witness to admit that the total sum of the contract was N95million and asked the witness how he calculated the debt (if any) at over N5billion, to which he answered that it was for job done that was not paid for, and the breaches that occurred from the contract. He rather told the court that if he was mandated to calculate the time value of money arising from the contract crisis, that he would get another N800m to be compensated.
The fireworks raged for hours but the judge, Justice Chinwendu Nwogu reminded the two professors that they could profess all they knew as professors but that he would dwell only on the law.
The hearing continues on October 29, 2024, when the Managing Director of Macobarb, Shedrack Ogboru, will be led to mount the witness box by his lead counsel, A.J. Okanje, to tell the court what happened in the controversial contract.
Macobarb International Limited, an indigenous contractor had dragged the NLNG to court claiming over N1billion (now amended to N5.074billion) in the Suit number PHC/2013/CS/2022 for alleged breaches to a contract (B130142PPI, Access Control) in the NLNG plant area with three years duration.
The suit said the contract provided that Macobarb be paid bit by bit progressively based on the value of verified work done.
Macobarb in its claims said the contract also forbade delay of any kind in the project and provided for a penalty on whoever caused the delay. It also provided for an alert system should anything want to cause a delay.
Macobarb said it activated the alert clauses when payment delays began to happen but that nothing was done to rectify the delays until the contract was terminated.
