The Chairman of the House Committee on Treaties, Protocols and Agreements, in the House of Representatives, Hon. Ossai Nicholas Ossai, at a resumed investigative hearing on the review of bilateral loan agreements and commercial contracts agreements by Ministries, Departments and Agencies (MDAs), said that some of the loans collected by the government were signed even before the terms were negotiated.
He accused the federal government officials of signing empty repayment loan documents for the development of the Nigeria’s rail sector even before the terms of the loans were negotiated.
The lawmaker also said that it discovered that the Ministry of Transportation signed a commercial contract worth $33 billion without any clear cut financial arrangement while most of the contracts agreement did not have local content clauses.
But the Minister of Transportation, Rotimi Amaechi, said there was such contract existing in the ministry as the only contract was the $1.6 billion loan for the Lagos/Ibadan rail project signed by the President Muhammadu Buhari’s government and the about $800 million loan signed by the former President Goodluck Jonathan’s government.
He challenged the committee to furnish his ministry with details of the contract to enable them make necessary response.
Ossai, who kicked against what he described as the misconceptions and misgivings on the ongoing legislative scrutiny of various agreements, alleged that public officials were desperate to obtain the loan without proper scrutiny of the agreements.
“We have also noted comments on the facts that National Assembly approved these loans; so, why turn around to probe it now? Well, I remember stating in our last meeting here, that executive scrutiny and oversight by the legislature on government policies, programmes and projects can be done at the beginning, during implementation and at the end of implementation.
“From our experience, the MDAs sign these commercial agreements in billions of dollars, then go the President and Federal Executive Council for approval to execute including securing loan facilities through Ministry of Finance and Debt Management Office (DMO) and then proceed to negotiate the terms of these loans before coming back to Mr. President who then writes the National Assembly asking for approval for billions of dollars to do projects without attaching the negotiated loan and commercial contracts agreements details.
“This approach is the reason we have government representatives signing empty pages of loan agreements repayment schedule and other key documents required for the loan agreements to become effective. We have commercial contracts signed in US Dollars, while the loan agreements for the execution of the same contracts were signed in Chinese YUAN currency in Ministry of Communications and Digital Economy/Galaxy Backbone Limited.
“We have also seen references made in the commercial contracts regarding BOQs but none of‘ the commercial, contracts agreements submitted to us especially by Ministry of Transport has a single BOQ attachment.
He said further: “We have noticed from documents available to us that commercial contracts process signed by Federal Ministry of Transport alone within this is over $33 billion without any clear cut financing arrangements. Most of these commercial contracts agreements didn’t also have local content clauses and we’re witnessed by none properly designated and authorised officials.
“There are observable issues relating to procurement process, evidences of 15 per cent advanced payments, payment of management fees, drawdown process and remittances and a whole lot of other matters, which we are strongly poised to ask questions on and hope to get honest answers that will finer tune the current process, plan for possible negotiation of some these governments in order to serve Nigerians better.”
But Amaechi denied obtaining $33 billion Chinese loan, describing the probe as political.
The minister said the Lagos-Ibadan rail project was currently under threat as a result of the ongoing probe by the House.
Amaechi states: “In slight response to your speech earlier, I will repeat here that we need to be more patriotic than we are being. Mr. Chairman, I have the right to speak, you invited me, I was once a member of the House. if you say Ministry of Transport have a contract $33 billion, we want to see it because as the Minister of Transport, the only contract awarded so far is $1.6 billion contract for Lagos-Ibadan which is under threat.”
Amaechi added: “Mr. Chairman the implication of having a contract of $33 billion is that I will have a large number of workers. There’s no $33 billion contract in the ministry of transport. What we have is $1.6 billion contract awarded under President Buhari and $800 million contract awarded by Goodluck Jonathan. By the time we came, the contract awarded by Jonathan signed by Aganga (Olusegun Aganga) have been completed 80 per cent. So, we didn’t have to do the meeting of local content or no local content.
“The only one that have to deal with the issue of local content is the $1.6 billion contract that was awarded for Lagos to Ibadan, for which Chinese government is providing $1.2 billion and we’re providing the remaining $400 million. There are over 20,000 workers and only 560 of them are Chinese, we need to begin to say the truth. It’s good to tell Nigerians the truth, this very political and we will show all the contracts awarded by the PDP government.”
The chairman asked if the $11.1 billion loan for Nigerian railway project that was signed on July 1, 2016, has been approved, but the minister explained that the contract was signed as a prelude to the loan.
