Nigeria: Investigation – How Non-Existent Firm Was Awarded Multi-Billion Naira Railway Contract
Eser Contracting and business Firm Included was unregistered however was awarded a N19.2 billion railway rehabilitation contract in violation of public procurement rules.
A multi-billion-naira contract to rehabilitate a piece of Nigeria’s Japanese Railway Line was awarded to an unregistered entity in a course of that reeked of corruption, regulatory failure, collusion, and defiance of Nigeria’s public procurement guidelines, an investigation by PREMIUM TIMES has proven.
That malfeasance was dedicated through the administration of Goodluck Jonathan, Nigeria’s quick previous president, who misplaced his re-election bid in 2015 partly attributable to expenses that his authorities didn’t confront corruption frontally.
However officers underneath the present Muhammadu Buhari administration have additionally not confirmed to be higher. They’ve helped to maintain an internet of subterfuge devised to cowl the fraud that began underneath Mr Jonathan.
A setup named Eser Contracting and Trade Firm Included, promoted by Turkish agency Eser, was awarded the contract to rehabilitate the 463 KM Port Harcourt-Makurdi part of the Japanese Railway line for N19.2 billion in March 2011. But it surely has no authorized capability for the work because it has no required certificates of incorporation, a CAC search revealed.
Our investigation confirmed the setup has attainable connections with individuals – Adekemi Alokolaro, nee Sijuwade, and her husband, Ola Alokolaro – who share household ties with Adeseyi Sijwuade, then Managing Director of the Nigerian Railway Company. For a number of years Mr Sijuwade has been a topic of contract fraud and corruption probes by the Nationwide Meeting and safety and anti-graft operatives.
The couple, Mr and Mrs Alokolaro, didn’t reply to an emailed request for remark. So did Mr Sijuwade, who was contacted by telephone name, WhatsApp message and SMS.
The railway rehabilitation work was divided into three sections: 463 KM Port Harcourt-Makurdi; 1016 KM Makurdi-Kuru; and 640 KM Kuru to Maiduguri, awarded to 3 completely different contractors in March 2011.
This text extends PREMIUM TIMES’ investigative reporting on Nigeria’s Japanese railway fraud, after an earlier story of how a company, Lingo Nigeria Limited, took public money for work not done and had Nigerian taxpayers and two foreign firms, from Czech and China, as victims.
Lingo was awarded the Kuru-Maiduguri part for N23.7 billion. CGGC World Initiatives Nigeria Restricted was charged with rehabilitating the section that runs from Makurdi to Kuru for N24.5 billion.
9 years after the contracts have been awarded, the rehabilitation work has failed regardless of big funds already sunk, dashing the hopes of individuals, particularly merchants, who had up to now a number of years relied on prepare service. The federal government has now determined to wrest the contracts from the businesses, who’ve submitted their exit plans on the federal government’s request.
Of the three contracts, two – the Port-Harcourt-Makurdi part and Kuru-Maiduguri section – given to Lingo and Eser respectively have been related to procurement fraud, our investigations confirmed. And whereas our earlier article described the contract awarded to Lingo as essentially the most problematic, the procurement course of involving Eser pushes the boundaries of impunity.
We didn’t discover the third contract given to CGGC to have been related to any procurement fraud. Nevertheless, as our area investigation involving journey throughout a number of states confirmed, CGGC additionally did jobs, which on-the-ground railway employees complained was perfunctory – the same grievance as that made by the employees on the part dealt with by Eser.
The employees mentioned it was the shoddy job that made the Japanese line now nearly unusable and never completely different from its state earlier than the rehabilitation contract, if not worse.
In opposition to the foundations
Within the invitation-to-bid advert for the contracts positioned within the November-December 2010 version of Federal Tenders Journal, the railway company required potential contractors to submit a sound certificates of incorporation — a statutory requirement.
Nevertheless, this requirement was brushed apart within the consideration of the bid submitted by Eser Contracting and Trade Firm Included whilst the method moved from the railway company to the Bureau of Procurement Procurement (BPP), and the ministry of transport and the presidency earlier than the contract was awarded.
The Public Procurement Act expenses the BPP with the duty of stopping “fraudulent and unfair procurement” and making use of administrative sanctions “the place essential”.
However the BPP failed on this duty because it issued a “Certificates of No Objection” to clear the way in which for the railway company to award the legally non-existent firm the contract. Additionally, it was the certificates issued by the BPP that the then Transport Minister, Yusuf Suleiman, cited in requesting anticipatory approval for the award of the contract from Mr Jonathan.
The ministerial request was made on March 25, 2011, a day after the BPP’s certificates was issued, and was authorised on March 28, 2011, by Mr Jonathan, official information obtained by PREMIUM TIMES present. It was in November of the next yr that the Federal Government Council endorsed the Eser contract alongside the 2 different sections because the president had in March 2011 hurriedly given anticipatory approval.
BPP didn’t remark after repeated requests by way of e mail and a Freedom of Info Act letter.
Authorized skilled, Jiti Ogunye, mentioned a international agency taking part within the procurement course of in Nigeria will nonetheless have to include an entity within the nation to fulfill the “authorized capability” requirement stipulated within the Public Procurement Act.
The Cowl: Enters Eser West Africa
After the non-existent Eser Contracting and Trade Firm Included was given the contract in March 2011, the promoters devised a option to smoothen the irregularities. The plan was to register a brand new firm, thus birthing Eser West Africa Restricted.
Eser West Africa Restricted was registered in June 2011, three months after the contract was awarded, and that entity has since carried on with the contract, partaking with officers, together with these of Mr Buhari. The identify “Eser West Africa” seems on boards on the building website on the railway station in Port Harcourt.
However Eser West Africa had not been registered on the time the contract was awarded and it was not the entity that was formally awarded the contract, in line with information from BPP, NRC, transport ministry, State Home, and FEC.
But, until date, regardless of its not being the unique contract beneficiary and being with out a certificates of incorporation on the time the contract was awarded, officers have continued to have interaction with Eser West Africa and use that identify in official communications referring to the Japanese railway line rehabilitation contract.
Whereas our investigation established that Eser Contracting and Trade Firm Included has no certificates of incorporation in Nigeria, it stays unsure if it glad different necessities, resembling tax clearance and audited accounts for the previous three years, within the advert for the contracts.
The Federal Inland Income Service (FIRS) replied an FOI request for the entity’s tax standing in addition to that of the later-registered Eser West Africa created to smoothen the procurement fraud. The tax company, nevertheless, declined any disclosure.
“The knowledge you will have requested regarding the corporations can’t be disclosed by advantage of the availability,” the FIRS wrote, referring to Part 14(1) (b) of the Freedom of Info Act 2011, which requires public establishments to disclaim functions for data concerning taxpayers and the evaluation or assortment of their tax.
An preliminary procurement course of for the Japanese line rehabilitation contract was cancelled by then transport minister, Mr Suleiman, over allegations of fraud and irregularities. Among the many corporations that benefited in that cancelled preliminary course of was Eser Nigeria Contracting Firm Restricted, registered in March 2009, simply earlier than bidding opened.
That was the primary look of Eser in railway procurement actions. Eser Nigeria Contracting – completely different from the legally non-existent Eser Contracting and Trade Firm Included and Eser West Africa, registered in June 2011 ostensibly to smoothen irregularities – has amongst its homeowners and administrators Venture Area of interest Restricted, alongside Lihan Adiloglu, a Turkish businessman, in line with incorporation filings we obtained.
Venture Area of interest is owned and directed by Mr and Mrs Alokolaro, who signify that firm as administrators on the board of Eser Nigeria Contracting, in line with incorporation filings. Mrs Alokolaro, a daughter of the late Ooni of Ile-Ife, Okunade Sijuwade, shares household ties with Mr Sijuwade, who oversaw the procurement course of. That is the attainable hyperlink our investigation confirmed might exist between Mr Sijuwade’s relations and promoters of Eser.
Additionally, an Eser-associated firm, Espro Asphalt, has Mrs Alokolaro as certainly one of its administrators alongside Eser Contracting and Trade, represented by Cagatay Tezsezen.
Eser couldn’t be reached for feedback. Nothing resulted from our go to to the Lagos handle the corporate listed in its incorporations filings. Safety employees on the constructing mentioned the corporate doesn’t function from that handle. An e mail to the handle listed on the web site of its father or mother firm primarily based in Turkey was not replied.
Then minister, Mr Suleiman, mentioned figuring out the validity of the claims made by Eser was outdoors his cost as minister.
“I actually was not conscious,” he mentioned. “All the pieces about tendering, due diligence and all that have been by the railway company in addition to the BPP. As a minister, I used to be not the accounting officer and was solely transmitting letters to the President for approval. However I had energy to cancel or assessment if there was real grievance. However I acquired no complaints. I cancelled the preliminary course of due to complaints about irregularities.”
“Not rehabilitation actually”
PREMIUM TIMES investigation included the monitoring of the work performed by the contractors in Rivers, Abia, Enugu, Benue, Nasarawa and Kaduna States, which the Japanese Railway line transverses earlier than linking Kuru in Plateau State and going by way of Bauchi and Gombe States earlier than terminating in Borno State. We had earlier carried out fieldwork from Kuru to Gombe for our earlier report.
On the railway station in Port Harcourt, a board bearing “Eser West Africa” because the contractor stands conspicuously on the entrance. This firm, although discovered to have taken the contract in ways in which violate Nigeria’s regulation, labored from Port Harcourt to Makurdi, the endpoint of the part it was assigned, railway employees on the bottom and neighborhood sources mentioned.
Nevertheless, the employees additionally mentioned the rehabilitation work was solely performed by Eser in chosen locations, particularly areas near stations.
“I am unable to say that was true rehabilitation,” one employees mentioned, echoing the considerations of others in Otukpo, Benue State. And what the employees complained was manipulation and abuse of their labour rights. They mentioned Eser “used us to do their contract and didn’t pay us. They manipulated that we have been doing our regular official work however they collected billions to do the work and rent employees.”
No less than three individuals corroborated this declare. Then, the employees additional alleged that Eser used outdated rails and equipment that have been saved in shops for the rehabilitation work.
The employees didn’t conform to be named due to concern they may very well be punished by authorities.
In what seems to assist the declare of the complaining employees, PREMIUM TIMES noticed that outdated rails of BS-60 mannequin with dates that preceded independence have been nonetheless on the tracks, which in varied locations have been lined by trash, sand and bushes.
After Eser’s work, trains began utilizing the observe however stopped in 2017. “However trains have been simply derailing due to the character of the work they (Eser) did,” one employees mentioned.
Nevertheless, PREMIUM TIMES confirmed that day by day service between Port Harcourt and Aba solely stopped as a result of COVID-19 restrictions primarily based on interviews with employees and several other individuals who had used the service.
“It’s a safer and cheaper approach of travelling,” Tunde Lasisi, a dealer in Port Harcourt mentioned, including that prepare service was his technique of sending items to Aba, the business nerve centre of Abia State.
In Makurdi, the place CGGC began its work, one senior employees on the bottom, who solely agreed to talk with out being recognized by identify, largely corroborated the claims of his colleagues beforehand interviewed within the part dealt with by Eser.
“They solely put stability stones to make the observe look new,” the employees mentioned. “They changed the rails however they used the outdated ones within the retailer they usually used our males.”
But that was restricted to inside the station yard, the employees mentioned, explaining that rehabilitation didn’t happen within the wider Makurdi space.
Recalling the January 2015 inauguration of “fashionable trains” for Port Harcourt-Makurdi service by Mr Jonathan’s deputy, former Vice President Namadi Sambo, the employees mentioned, “We solely rode the prepare inside the yard, between the extent crossings. It was all formality however the VP might not find out about the kind of work that was performed.”
The employees additional mentioned that “passenger service began however trains have been derailing. So, the loss was an excessive amount of. We stopped in 2017, two years after the rehabilitation.”
In Lafia, a employees member mentioned CGGC labored outdoors the station however “in the event that they labored properly, why are trains not working? Why is our service not efficient. They used outdated supplies already saved in shops.”
In Kafanchan, Kaduna State, related to the Japanese Railway line by way of a spur line, a employees mentioned, “they (CGGC) labored right here however solely skeletal rehabilitation. It was not rehabilitation actually. They did some kilometres and left some.
The employees mentioned service that adopted the rehabilitation lasted just for a “brief interval”
The corporate didn’t work as much as Kuru Junction and it additionally didn’t work on the department line from Kuru to Jos station, PREMIUM TIMES confirmed.
CGGC didn’t remark for this report. A textual content message was not replied and an official ended a name abruptly as our reporter launched himself and defined he needed to make inquiries on the Japanese rail line mission. Repeated calls have been ignored.
No a part of the part rehabilitated by CGGC is now used for prepare service. And besides between Port Harcourt and Aba earlier than COVID-19, the Japanese Railway line isn’t functioning regardless of a number of billions of naira pumped into the mission.
The frontline employees on the bottom are solely reporting to stations day by day with none actual work, they mentioned.
Searching for N5.5 billion in exit plan
Because the N67.3 billion rehabilitation contract has failed, authorities are planning a recent procurement course of and have requested the failed contractors to submit exit plans.
PREMIUM TIMES had previously reported how Lingo, the contractor awarded the Kuru-Maiduguri part, requested N9.2 billion, after being beforehand paid no less than N9.4 billion, regardless of underperforming on the contract. Authorities’s assessors have now rejected Lingo’s declare and concluded the corporate as a substitute owed the nation N1.6 billion for being overpaid, corroborating PREMIUM TIMES’ findings that the corporate made inaccurate claims about its work. The corporate can be being investigated by the anti-graft company, EFCC.
We have now now accessed extra information exhibiting some particulars of the request made by Eser in its exit plan. In response to these information, Eser requested N5.5 billion to exit the contract. Nevertheless, the railway company’s valuation, in line with the information, is N1.3 billion.
The transport minister, Rotimi Amaechi, is but to authorise fee to Eser, sources near him mentioned.
CGGC, on its half, didn’t request any quantity for exiting the contract, in line with the information we now have seen. However curiously, the information present that the railway company says its valuation is N3.6 billion.
Whereas we accessed official information that confirmed what Lingo had beforehand been paid earlier than the exit plan request, PREMIUM TIMES couldn’t decide what was paid to Eser and CGGC.
An FOI request to the Workplace of the Accountant-Normal of the Federation was referred to the transport ministry. The ministry didn’t reply.
The federal government has now gone far in plans to re-award the contract to repair the Japanese Railway line however there are not any certainties anybody might be made to face any sanction for the regulatory failure and company fraud that characterised the failed contracts.