House Accuses FG Officials of Signing Empty Loan Repayment Documents, $33bn Contracts without Terms
*It is not true, replies Transport Minister
Members of the House of Representatives Monday alleged that federal government officials signed empty loan repayment documents in respect of the rail sector before the terms were negotiated.
The House also said it has discovered that the Ministry of Transportation signed contract worth $33 billion without clear financial arrangements and local content clauses.
The Chairman of the House Committee on Treaties, Protocols and Agreements, Hon. Ossai Ossai who disclosed this during an investigative hearing on loan commercial agreements by Ministries, Departments and Agencies (MDAs) said some of the loans were signed before the terms were negotiated.
Ossai said it was observed that officials of the government were in a state of desperation to secure the loans without properly checking the agreements.
He said, “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.
“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 the Minister of Transportation, Rotimi Amaechi, denied this, insisting there was nothing like that, adding that only the $1.6 bn loan for the Lagos/Ibadan rail was signed by the administration of President Muhammadu Buhari and about $800 million loan signed by former President Goodluck Jonathan’s administration.
Amaechi challenged the House Committee members to produce evidence on the allegation to enable the Ministry respond.
Describing the $33 billion Chinese loan probe as political probe, Amaechi said the rail project was now under threat as a result of the probe by the law makers.
According to Amaechi, “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.
“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.”
Members of the House of Representatives Monday alleged that federal government officials signed empty loan repayment documents in respect of the rail sector before the terms were negotiated.
The House also said it has discovered that the Ministry of Transportation signed contract worth $33 billion without clear financial arrangements and local content clauses.
The Chairman of the House Committee on Treaties, Protocols and Agreements, Hon. Ossai Ossai who disclosed this during an investigative hearing on loan commercial agreements by Ministries, Departments and Agencies (MDAs) said some of the loans were signed before the terms were negotiated.
Ossai said it was observed that officials of the government were in a state of desperation to secure the loans without properly checking the agreements.
He said, “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.
“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 the Minister of Transportation, Rotimi Amaechi, denied this, insisting there was nothing like that, adding that only the $1.6 bn loan for the Lagos/Ibadan rail was signed by the administration of President Muhammadu Buhari and about $800 million loan signed by former President Goodluck Jonathan’s administration.
Amaechi challenged the House Committee members to produce evidence on the allegation to enable the Ministry respond.
Describing the $33 billion Chinese loan probe as political probe, Amaechi said the rail project was now under threat as a result of the probe by the law makers.
According to Amaechi, “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.
“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.”
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