Wednesday, February 11, 2009              

Senate panel queries aviation sector spending

• Wants Fani-Kayode barred from public office
  From Alifa Daniel and Lemmy Ughegbe, Abuja

  THE Senate Committee on Aviation opened a can of worms yesterday as it regaled lawmakers with details of how billions of naira was siphoned from government coffers in the aviation sector.

  Though the Senate refrained from delving into certain matters that were before a court of law, the report read to members by the Chairman, Senate Committee on Aviation, Anyim Ude, recommended a five-year public office ban on a former Minister of Aviation, Femi Fani-Kayode, currently facing court charges based on "established irregularities in the award of contracts."

  The Senate panel urged the Economic and Financial Crimes Commission (EFCC) to go after another aviation minister, a former Managing Director of the National Airspace Management Agency (NAMA), a contractor and recover N5 billion, being inflated cost of the Safe Tower project.

  "In spite of efforts by groups outside the hallowed chambers of the Senate to blackmail, infiltrate, threaten, intimidate and cajole the committee, it remained focused and established," Ude told his colleagues yesterday.

  Ude said that although N19.5 billion was released by the Federal Government in 2006, to finance major intervention projects of the Federal Airports Authority of Nigeria (FAAN) to the tune of N9.2 billion - Nigeria Airspace Management Agency, N7.3 billion; Nigeria Civil Aviation Authority, N2.2 billion and the Nigerian Meteorological Agency, N900 million - the distribution of the N19.5 billion fund to aviation parastatals was changed by the Ministry of Aviation to give Federal Airports Authority of Nigeria (FAAN), N13,100,956,240.07 and Nigeria Airspace Management Agency (NAMA), N6,399,043,759.35."

  The Rivers State Government later released additional sum of N2 billion to FAAN for infrastructural upgrade at the Port Harcourt Airport, the panel added.

  Ude disclosed further: "The N6.5 billion used for the Safe Tower project was borrowed by FAAN ostensibly on behalf of NAMA from Zenith Bank Plc out of which N6,399,043,759.35 (inclusive of letters of credit charges) was paid soon after release for the foreign component. NAMA claimed that it was neither consulted nor did it participate in any negotiation for the loan. The hurried nature of the release and payment was attributed to the need to meet the requirements of the International Civil Aviation Organisation (ICAO) audit team scheduled to visit Nigeria in November 2006."

  Among other findings of the committee were:

  "That half of the N6.5 billion was later refinanced by UBA Plc;

  "That the Safe Tower project cost the nation N6,699,043,759.35 made up of N6,399,043,759.35 foreign component and N300,000,000 local content;

  "That the N6.5 billion Tower project was awarded through selective tendering process (not advertised and not competed for);

  "That the N6.5 billion Tower project had no Bill of Quantities or a detailed listing with specifications of items to be delivered by the contractor;

  "That no due process was followed and the contract was grossly inflated;

  "That the company which operated as consultants, did the initial survey, determined the scope of work and fixed the contract price was the same company that was awarded the contract;

  "That the company is Avsatel Ges MBII Vienna, Austria and Abuja;

  "That the N6.5 billion expenditure on the Safe Tower project was not appropriated by the National Assembly either before, during or after the contract;

  "That the highest quotation received by the Technical Consultant to the Senate Committee on Aviation during the investigation for the same four Towers from both Viasala and Frequenties of Vienna, the manufacturers, and other companies was N1.5 billion at 100 per cent mark-up;

  "That the current management of NAMA, in the 2008 Budget had a provision of N1.5 billion for the same four towers in four other airports in the country (same specification, quantity and quality); _

  "That the current management of NAMA has indeed received quotations which were tendered as exhibits to the committee, one of which was from Viasala and Frequenties, the manufacturers of the four towers under reference for N1.3 billion for the same specifications as that of the N6.5 billion Tower project;

  "That the N6,699,043,759.35 Tower project was grossly over- inflated to about 446.6% above the market price of N1.5 billion;

  "That Due Process was not followed in the award of the contract. The fake Due Process Certificate said to have been issued by the Bureau of Public Procurement should be investigated by the EFCC which should also find out why no Certificate of Payment was ever issued by the Bureau and no request to that effect was made by the Ministry;

  "That as at February, 2008, one and a half years after the loan was obtained, the cost of the N6.5 billion in commercial bank Loan servicing to the Federal Government stood at N1,438,788,496.06 (One billion, four hundred and thirty eight million, seven hundred and eighty eight thousand, four hundred and ninety six hundred and six kobo);

  The Senate committee also listed 20 companies which had a combined share capital of less than N21million but were given combined contracts worth about N10 billion.

  The panel, therefore, recommended that:

• The Senate should, among others, urge the EFCC and the Police to take necessary steps to recover the sum of N5 billion being inflated cost of the Safe Tower project from the former Minister of Aviation, Prof. Babalola Borisade, the former Managing Director of NAMA, Capt. Roland Iyayi and the contractor, Avsatel Nig. Ltd which executed the project and prosecute them accordingly. The Safe Tower Project, though well intentioned, was used to defraud the country;

• the EFCC should investigate the source of the fake Due Process Certificate said to have been issued by the Bureau of Public Procurement for the award of the N6.5 billion Tower Project. The EFCC should also find out why Certificate of Payment was never issued by the Bureau and no request to that effect was made by the Ministry as well as the source of other fake Due Process Certificates used y contractors who did jobs for and were paid by FAAN;

• the former Minister of Aviation, Chief Femi Fani-Kayode should be barred from holding public office for five years.

  That the Federal Government should set up a Contract Review Panel:

• to review all the contracts awarded with the Intervention Fund with a view to recovering all monies on inflated contracts and prosecuting guilty and incompetent ones such as FIAT International Ltd while settling legitimate outstanding payments to ensure that all the contracts properly awarded are completed within a prescribed period in the interest of air safety;

• to discover all ghost contractors, especially at Kano International Airport, unqualified and unregistered contractors who did not follow due process, those given jobs above their equity shares or those who evaded payment of tax on receipt of mobilisation fees for appropriate action;

• the Federal Government should specifically ensure: That the N1.2 billion for MMIA runway extension is not released to M/s PW Nig Ltd until due process and Federal Executive Council approval is received for the proposed taxiway job. The Minister of Aviation should take steps to ensure a legal cancellation of the extension part of the contract, which was not feasible due to lack of space, through an addendum to the contract or any other means as may be advised by the Legal Departments of both the Ministry and FAAN;

• that the EFCC should investigate the case of Almond Projects Ltd and its MD, Mr. Gbenga Obadina, who collected N158,600,000.00 for doubtful Consultancy Services in Lagos and Port Harcourt and was involved in irregular signatures on some documents with which the documents were collected; and

• that the Legal Department of FAAN should be warned for dereliction of duty and non-protection of Federal Government interest by non-provision or invocation of delay clauses in Contract Agreements.

  Meanwhile, an Abuja High Court yesterday granted the request of an Austrian businessman, George Eider, who is standing trial alongside Borishade over allegation of bribery over the N6.5 billion Safe Tower Project, to travel to Austria for medical treatment.

  The trial judge, Mr. Salisu Abubakar, had refused an earlier application by Eider seeking his nod to travel abroad for health reasons.

  But following a fresh application by Eider's counsel, Mr. Rickey Tarfa (SAN), whereof he adduced fresh evidence, the court gave its nod for him to go on the trip.

  "I hereby other that his International Passport should be released to him by the registrar of this court. The applicant should present two sureties, who will guarantee his return to the country to face his trial. The applicant is granted permission to travel abroad for a period of 34 days," the judge ruled.

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