EFCC releases report on controversial N13.7 billion NPA dredging contract


December 2, 2018

Contrary to the content of a petition it received, the Nigerian Ports Authority did no wrong in the award of a N13.67 billion contract, the anti-graft agency, EFCC, says.

The contract was for the dredging of the Escravos Channel, Delta Port in Warri, Delta State. It was awarded to Dredging International Services Nigeria Limited, a subsidiary of the Dredging Environmental and Marine Engineering Group, Belgium.

The contract which was awarded in 2017, has been a source of controversy attracting investigations by the House of Representatives and the Bureau of Public Procurement following a petition by Cadrell Advocacy Centre, a non-governmental organisation.

The position of the EFCC is contained in a legal opinion written by EFCC’s Zainab Ettu. The report, dated October 19 was endorsed by the commission’s Head of Legal and Prosecution Department, A.B.C Ozioko, and sent to the commission’s acting chairman, Ibrahim Magu.

THE PETITION

Cadrell Advocacy Centre, in its petition, alleged that the NPA had awarded the said contract to Dredging International Services and Dredging International Services Cyprus, both subsidiaries of the DEME Group Belgium, said to have been convicted in Switzerland on May 2, 2012.

The group asserted that by awarding the contract to the convicted companies, NPA was in breach of the Procurement Law.

The revelation by the group drew the attention of the House of Representatives which in May this year mandated its Committee on Ports, Harbours and Waterways, as well as its committee on public procurement to investigate the allegations.

The resolution to probe the contract followed a motion brought by a lawmaker from Delta State, Nicholas Ossai, who expressed concern that the NPA took advantage of the FEC’s approval to award contracts without any prior budgetary appropriation.

He also stated that the contract was awarded to a company whose reputation and professional competence was questionable after suffering criminal indictments and convictions in many countries.

The facts of the matter showed that 22 companies had indicated interest in the contract by submitting bids when NPA concluded plans to carry out the dredging work.

Two of the 22 companies, Dredging International Services Nigeria Limited and Dredging Atlantic Nigeria Westminster Dredging and Marine Limited (DANL) were cleared and prequalified.

Following the evaluation of the financial bids of the two companies, DISNL which submitted the lower bid of N13.68 billion was awarded the contract, as against DANL which submitted a bid of N13.70billion.

Besides the allegation made by the NGO, DANL had raised an allegation of irregularity against NPA over the corrected mathematical error corrected in the bid of DANL without its knowledge contrary to Section 31(4) and (5) and which was not addressed by the NPA.

NPA’S REACTION

The management of NPA denied the allegations, saying they were made by companies that lost out in their bids to secure the contract. The agency insisted that due processes as enumerated in the Procurement Act, 2004 were followed in the award of the contract.

It said apart from being guided by provisions of the Procurement Act in all its procurement processes, all procurements by the authority was subject to the supervision/approval of the Bureau of Public Procurement, BPP, and the authority received the necessary approvals before going ahead with the award of the contract for the dredging of Warri Channel.

The agency also said that when it received the petition alleging that Dredging International Nigeria Limited had been convicted by a law court in Switzerland, it sought the legal counsel of the Office of the Attorney General of the Federation and requested that the Economic and Financial Crimes Commission, EFCC, investigate the claim.

EFCC operatives

“In addition to this, although Dredging International Nigeria Limited provided us with a sworn affidavit in support of claims that they were different from the company that was so convicted, the Authority engaged a legal practitioner, who embarked on an independent investigation of the petition and the claims of the company,” NPA had said in a statement issued in September.

“These investigation(s) revealed that allegations that Messrs Dredging International Services Nigeria Limited had been convicted in a law court in Switzerland for corrupt practices involving some officials of the Nigerian government including the NPA were incorrect.

“The conviction of a subsidiary company indeed is not the conviction of all companies within a group of companies. In addition, none of the directors so convicted for complicity by the court in Switzerland is on the board of Dredging International Nigeria Limited.

“The result of these investigations were made available to the BPP. Nevertheless, the BPP itself set up an independent investigation of the petition and came to the conclusion that the company was eligible to participate in the bidding process.”

The relevant section of the Procurement Act 2007, Section 16(8)(e&f) provides that “Whenever it is established by a procurement entity or the Bureau that any or a combination of the situations set out exists, a bidder may have its bid or tender excluded from any particular procurement proceeding if: (e) the (entity) has been validly sentenced for a crime committed in connection with a procurement proceeding or any other crime committed to gain financial profit, and (f) the bidder has its management or is in any portion owned by any person that had been validly sentenced for a crime committed in connection with procurement proceedings or other crime committed to gain financial profit.”

It is on the strength of this provision that the NGO based its allegation and petitioned against the NPA, upon which the EFCC and the House of Representatives conducted their investigations.

EFCC Report

But the EFCC after its investigation concluded that the NPA justifiably awarded the contract to DISNL since the company was never convicted or indicted by any court of law.

“Dredging International Services Nigeria Limited (DISNL) is not a convicted company,” the EFCC memo stated. “The company wasn’t at the time of the award of the contract managed or partly owned by any convicted person.

“The contract to carry out the remedial works and minor dredging at the Escravos Channel, Delta Port, Warri awarded to DISNL followed due process without contravening the provisions of the Public Procurement Act 2007 as alleged.

“The allegation levelled against NPA in the petition of Cadrell Advocacy Centre is unfounded, without substance and no facts have been received to establish any prima facile case against the Nigerian Ports Authority.”

In its observations, the commission’s legal department noted that besides the fact DISNL was neither convicted nor indicted for any procurement or financial fraud, contrary to the subparagraph (f) of the Act, no member of the management of DISNL or any person partly owning the company was indicted for a procurement related offence.

“Assuming without conceding that both conditions in the subparagraph (e) & (f) are present in this case, it is my humble view that it wouldn’t amount to an automatic exclusion of DISNL’s bid from the bidding proceedings because the operational word in the act is ‘may’. Which means it is at the discretion of the procuring entity to either exclude or retain any such indicted bidder in the bidding process,” the EFCC memo read.

“Having erroneously arrived at the conclusion that DISNL is a convicted company, the complainant is asking the relevant authorities to blacklist DISNL which in my opinion assuming that were to be the case, will be at the discretion of the procuring entity whether or not to invoke Section 16(8) (e&f) of the procurement Act 2007.”

The EFCC based its conclusions on the findings that DISNL and Dredging International are part of the DEME Group, Belgium, while Dredging International Services Cyprus (DISC) is a subsidiary of Dredging International (DI).

House of Reps

The commission also found out that all the companies parent or subsidiary are separately incorporated, having different structures from one another.

According to the commission, the companies indicted were Dredging International Services Cyprus (DISC) and Dredging International NV and not Dredging International Services Nigeria Limited (DISNL).

They were said to have been convicted by the Swiss Government for their involvement in the payment of bribes to government officials in relation to the Bonny Channel Project contract awarded to DISC sometime in 2005.

The commission also found out that convicted along with the companies were Christian Van Meerbeeck and Marc Maes who served as Chief Finance Officer and Head of Legal respectively.

The EFCC, however, agreed to the claim by DANL of an irregularity of a correction made of a mathematical error in its bid without its notice.

The commission, however, held that despite the requirement for notice, the law did not make any provision for failure to give such notice which in effect did not invalidate the financial evaluation and the entire biding proceedings.

The House of Representatives, despite commencing investigations long ago, is yet to make public its findings on the matter.

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