Billions saved from contract inflation in power, transport ministries

The Federal Government of Nigeria through the Bureau of Public Procurement (BPP) says it saved more than N26.86 billion in 2018 alone, by revising down inflated contract sums by government contractors.

The BPP stated this in its 2018 annual report obtained from the bureau by News Agency of Nigeria (NAN) in Abuja.

The affected ministries included Transport and Power, Works and Housing headed by Babatunde Fashola and Rotimi Amaechi, former governor of Lagos and Rivers, respectively.

According to the report, the savings are from the review of contracts awarded to contractors by various Ministries, Departments and Agencies (MDAs) before being given certificate of “No Objection’’ by the bureau.

The report showed that in 2018, 86 certificates of “No Objection’’ was given out by the bureau to MDAs for contracts initially totalling N1.421 trillion but was later reduced to N1.394 trillion.

Of the savings made, the highest amount of N22.22 billion was recorded from the Ministry of Power, Works and Housing. The money was saved from an initial request of N877.40 billion.

Similarly, contracts under the Ministry of Petroleum Resources was reduced from N278.91 billion to N278.64 billion, resulting in savings of about N271 million.

Also, the BPP saved N1.37 billion on projects from the Ministry of Transportation from an initial request of N76.22 billion and from Ministry of Water Resources, N521 million was saved out of N13.12 billion.

From the Ministry of Finance, BPP saved N143.72 million from a request of N3.54 billion and about N33.65 million was saved from the Central Bank of Nigeria’s (CBN) initial request of N1.47 billion.

The report also showed that savings of about N494.96 million was made from various military contracts from an initial request totalling N123.82 billion for the procurement of critical equipment.

In addition, savings of about N8.04 million was made from various contracts under the supervision of the Ministry of Interior, from an initial request of N9.23 billion.

The procurement bureau also saved N104 million out of an initial request of N936.75 million by Federal Radio Corporation of Nigeria for the procurement of broadcast equipment for 2019 general elections.

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The report, however, showed that no savings was made from contracts under the Federal Capital Territory Administration, Ministry of Environment and the Ministry of Budget and National Planning.

According to the report, the public procurement activities in most MDAs are shrouded in secrecy and not in line with international best practices

“The degree of the reported cases being prosecuted in the courts by the EFCC and the ICPC are clear testimony of the breaches in the MDAs.

“As observed in most cases, the procurement officers collude with the contractors and service providers to breach certain provisions of the BPP Act for their selfish reasons.

“These breaches range from faulty bid solicitation process, advance exposure of the bidding criteria to their preferred bidders and overlooking forged procurement statutory documents during technical and financial bid process.

“They also give out in-house prices of contracts to their preferred contractors and service providers which serve as an advantageous guide in their financial bidding, among other numerous breaches of the Act.

“Procurement officers, who are known to be colluding with the bidders to breach the Act, have not been reprimanded enough to deter them from their offences,’’ the Bureau reports.