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The N3.6 trillion ($12 billion) standard coastal railway line contract 
awarded before the 2015 elections did not follow regulations guiding 
contract award, a House of Representatives committee has revealed in an 
interim report. 
The contract was awarded by the government of former President Goodluck Jonathan to the Chinese construction giant, CCECC. 
 
The rail line is to run from Calabar, through the president’s native village of Otuoke in Bayelsa State to Lagos. 
However,
 the interim report of the House Ad-hoc committee, which is 
investigating railway contracts from 2010 to 2014, has unearthed serial 
breaches of the Public Procurement Act and other laws. 
 
The 
committee, chaired by Rep Johnson Ehiozuwa (PDP, Edo), was set up to 
investigate the activities of the Federal Ministry of Transport, the 
SURE-P programme and the management of Nigerian Railways Corporation 
from 2010 to 2014. 
A scrutiny of the 20-page report, exclusively 
obtained by Daily Trust, shows that almost 40 railway contracts reviewed
 were breached in one way or the other. 
 
The anomalies range from 
multi-billion contracts awarded without competitive bidding; contractors
 without verifiable cognate railway experience or using the names of 
international companies to secure contracts but executed without their 
involvement. 
The report is also replete with evidence of contracts 
awarded without proper documentation and at inflated costs, as well as 
contract manipulation without the involvement of the Board of the 
Nigerian Railway Corporation. 
 
In the case of the N3.6 trillion
 costal rails the report revealed that there was no competitive bidding 
even as the cost was inflated. 
Also, there was no cogent feasibility 
study or independent technical assessment or advice and no front end 
engineering design (FEED) or even preliminary design, the report said. 
It
 is mandatory for major contracts to get the approval of the Bureau of 
Public Procurement (BPP), but in this case the bureau had refused to 
approve the contract because the cost was inflated and there was no 
funding plan. 
 
Contracts also routinely must be approved by the Federal Executive, but the council was bypassed this time around. 
The
 Jonathan government allegedly went ahead and signed the contract even 
without the approval of both the bureau and the FEC, the report said. 
“FMT
 (Federal Ministry of Transport) entered into a commercial contract with
 CCEEE/CRCC on November 19, 2014. The award did not obtain a ‘no 
objection’ certificate from the BPP due to the absence of a verifiable 
funding plan”, the report stated. 
 
It added: “It was not presented
 to FEC (Federal Executive Council) and there was no constitutional 
approval for this contract; indeed the contract was signed a week after 
the BPP refused a ‘no objection’ certificate and insisted it was 
overpriced.” 
This, according to the report, is contrary to the 
preamble in the contract document which claims that all due process 
steps were complied with and that the BPP issued a no objection 
certification no: BPP/DG2014/2162 dated November 12, 2014. 
 
“An 
examination of the records indicates that a letter bearing the same 
reference number and same date was written to the Minister of Transport 
by the BPP giving reasons a no objection certificate could not be 
issued”, the report stated. 
The report said the preamble clauses in 
the contract document further disclosed that the former President 
(Goodluck Jonathan) granted anticipatory approval for the award of the 
contract vide a letter with reference number: Pres/99/MT/203 dated 
November 17, 2014. 
 
“In the absence of sight of the purported 
presidential letter, no comment can be made on its adequacy save that, 
there is no provision in the Procurement Act for anticipatory 
approvals,” the report stated. 
The CCECC had told the committee that work was yet to commence and that no payment had yet been made. 
However,
 the committee feared that certain caveats in the contract may not 
adequately protect the current government from financial liability if it
 decides to stop the contract or is unable to find the $12bn required to
 fund it. 
 
Other railway projects 
The report also 
provided the status of other railway projects awarded between 2009 and 
2014. These include the Kaduna to Idu standard gauge contract also 
awarded to CCECC on October 22, 2009 at the cost of $849million for a 
period of 4 years. Its consultancy was awarded to TEAM for $318million. 
However,
 work did not begin until February 2011. On May 13, 2015, there was a 
variation in cost shooting the total sum to $1.04billion while the 
completion date was extended to December 31, 2015, a date which has not 
been achieved, the report noted. 
 
While the Ministry of Transport 
told the committee CCECC had to date been paid $769.8million, the 
contractor said it had received $792million. 
Also, the committee 
report revealed that site operations were yet to commence on the Lagos –
 Ibadan standard gauge contract which was awarded to CCECC on August 28,
 2012 to be executed in 36 months. The contractor claimed it was yet to 
receive any money in respect of the contract which is about 40 months 
late. 
 
Among past chairmen of the NRC who were invited by the 
ad-hoc committee to explain their roles in the award and implementation 
of the contracts were: Alhaji Bamanga Tukur (2014-2015); Alhaji Kawu 
Baraje (2011-1013); Ambassador Ladan Shuni (2011) and Alhaji Bello 
Mohammed Haliru (2009-2011). 
While Alhaji Bello was said to have 
failed to attend the committee’s hearing, Tukur and Shuni were said to 
have attended. “Each took turn to disown any involvement in the award of
 contracts at the NRC. Ambassador Shuni ...also denied the existence of 
any report in respect to any such investigation”, the report said. 
 
Although
 the committee described its interim report as “report of an 
investigation in progress” and offered no recommendation, a member of 
the committee who spoke with Daily Trust in confidence said: “This is 
only a tip of the iceberg because we have not even started the technical
 review to look into the execution of the contracts. 
“All we have 
reviewed so far are the contract documents and not the physical work to 
see whether the work has been done or not, if it is true when they tell 
us that they have completed 90% of the work and paid the contractor. 
What we know is that the contractors have all but one disappeared into 
thin air,” it said. 
 
Source:http://www.dailytrust.com.ng/news/general/n3-6tr-rail-contract-bypasses-fec-approval/135815.html 
 
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3.6 Trillion Naira Rail Construction Contract Bypassed FEC Approval-Senate Ad-Hoc Committee

The N3.6 trillion ($12 billion) standard coastal railway line contract awarded before the 2015 elections did not follow regulations guidin...