Anenih Tackles Reps On N2.3b 'Failed' Road Contract

Former Works and Housing Minister, Chief Tony Anenih, has described as libelous his purported summon by the House of Representatives Committee on Public Accounts over the N2.3 billion Nasarawa-Loko ‘failed’ road contract.
In a four-page letter to the Speaker, Aminu Waziri Tambuwal, yesterday and entitled: “Re: Reps Summon Anenih over N2.3bn ‘Failed’ Contract,” Anenih said he felt pained that a member of the House of Representatives could make comments on issues as the one in question without adequate investigation. 

He said although he had not received any official summon from the House Committee or any other investigative committee whatsoever, he considered the issues raised by the news report serious enough that he had decided to give a brief account of what he knew about the award of the contract for the reconstruction of the road while he was in office as minister. 

The letter reads: “My attention has been drawn to a libelous publication in some Nigerian National Newspapers, that I have been summoned by the House of Representatives through the House Committee on Public Accounts to appear before it in connection with a N2.3bn contract awarded to Messrs Torno Internationale Nigeria Ltd. in Nasarawa State in September, 2001. 

“Although I have not received any summons from the House Committee on Public Accounts or from any other Investigative Committee whatsoever, I consider the issues raised by the news report serious enough, that I have decided to give a brief account of what I knew about the award of the contract for the reconstruction of Nasarawa-Loko road while I was in office as the Minister of Works. 

“In 2001, tenders were received from five major companies for the award of the contract as follows: Torno Internationale Nig. Ltd, which quoted N2,318,643,233.36 with 18 months duration; Micans Nig Ltd, which quoted N2,635,715,572.19 without specifying completion time; P&P Construction & Co Ltd which quoted N3,013,890,450.18 without any duration; PW Nig Ltd, which quoted N4,407,274,447.02 with 18 months duration ; and Rockbridge Construction Ltd, which quoted N4,486,567,064.60 with 24 months. 

“A Technical Evaluation Committee made up of Senior Engineers in the Highways Department of the Ministry in summary, found Torno’s tender of N2,318,643,233.36 to be most desirable and recommended to the Honourable Minister that the contractor be considered for the award of the contract. Thereafter, the Honourable Minister forwarded a Memo to Federal Executive Council for consideration and approval. 

“At its 36th meeting on Wednesday 5th September, 2001, the Federal Executive Council (FEC) considered and approved the award of contract No 5092 for the reconstruction of Nasarawa – Loko Road with Alushi Loop, to Messrs. Torno Internationale (Nig) Ltd at the contract sum of N2,318,643,233.36 with a completion period of eighteen (18) months. An award letter dated 14th September, 2001 was, thereafter, written to Torno accordingly. 

“It is instructive to note that during evaluation and inspections, the competence and capacity of Torno to execute the contract was never in doubt because their construction equipment were all on display at Zuru Town in Kebbi State where they were doing a township road for the Kebbi State Government. Also of note is that Torno’s parent company, Torno Internationale SPA, built Shiroro Dam in 1990. 

“Furthermore, it is worthy of note that during the consideration of the Memo by FEC, Mr. President whole-heartedly supported bringing in new companies like Torno who have investor’s mind-set and whose tenders tended to be generally lower than those of older companies, with the view of bringing down the cost of road construction in Nigeria. 

“Following the signing of the relevant contract agreement between the Federal Ministry of Works and the contractor, and in accordance with relevant clause of the agreement, the contractor requested for Advance payment of 25 per cent of the contract sum. 

“He presented the necessary Advance Payment Bank Guarantee, Ref No FSB/GUA/2001/189 from FSB International Bank Plc to cover the sum of N552,057,912.71. The guarantee was to remain valid and in full effect from the date of payment into the account of the contractor with the Bank until the Federal Ministry of Works and Housing receives full repayment of the same amount from the contractor. 

“In addition to the Advance Payment Bank Guarantee, the contractor also submitted a Performance Bond, Ref. No FSB/GUA/2001/190 in the sum of N220,823.165.08, to guarantee his performance. 

“In October 2001, an Engineers Certificate No.1 for the Advance Payment of N552,057,912.71 (excluding VAT of N27,602,895.64) was issued to the contractor and processed for payment accordingly. 

“Also, 5 no Interim Payment Certificates (IPC) in the total sum of N120,380,712.74 were approved and paid to the contractor, bringing the total amount paid to N672,438,625.45 as at end of October 2002. At this stage, the contractor was still on site and the project was at 16% level of completion. This was the position of things as at the time I left the Ministry in 2002. The recovery of the mobilisation advance had not commenced because the contractor had not reached the stage of physical completion (20%) as required. 
However, the Advance Payment Bank Guarantee was still valid and enforceable. 

“However, I am told that in 2004, two years after I had left the Ministry, based on the threat by the contractor to stop work on the ground that the contract has been frustrated by government’s failure to pay for job executed after several demands for such payment to be made, the then Honourable Minister, (Senator Adeseye Ogunlewe) took a Memo to Federal Executive Council for the termination of the contract. 

“I was further informed that the contractor in 2005, took the matter for arbitration and obtained judgement against the government. 

“It is, therefore, clear from the foregoing that the contract was not terminated by government on the ground of incompetence of the contractor rather, it was the contractor that sought termination because of failure of Government to pay for job done. 

“I must, however, emphasise that the events that led to the termination of the contract and the subsequent arbitration that followed all took place years after I had left the Ministry. 

“It is, therefore, my view that those who were in the Ministry at the time should be able to provide the relevant explanation in the circumstance. 

“Right Honourable Speaker, I feel pained that a member of Nigeria’s House of Representatives under your able leadership should make comments on issues like this without adequate investigation. I advise the Committee to carry out thorough investigation on this matter in the interest of justice and fairness.”a