The House of Representatives on Thursday set up an ad-hoc committee to investigate the procurement process of the contract for the Lagos-Calabar Coastal Highway project and report to the House within four weeks.
The House also directed Minister of Works, Dave Umahi; the Minister of Finance, Wale Edun and the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi to ensure that all guarantees and credit enhancement instruments for the Lagos-Calabar Coastal Road Project are sent to the National Assembly for approval.
The resolutions followed the adoption of a motion of urgent national importance by Rep Austin Asema Achado (Benue, APC).
Moving his motion, Achado said the Federal Ministry of Works had executed an engineering procurement construction and finance contract in favour of Hitech Construction Company to deliver the 700km Lagos to Calabar Coastal Highway and rail project at the rate of N4.329 billion per kilometer using reinforced concrete technology.
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He however raised concerns that the procurement strategy of the project might have violated the Public Procurement Act 2007, Section 40(2) “which requires that where a procuring authority adopts to use Restrictive Tendering Approach, it should be on the basis that the said goods and services are available only from a limited number of suppliers and contractors and as such, tenders shall be invited from all such contractors who can provide such goods and services.”
He said the House was aware that the procurement strategy adopted by the Federal Ministry of Works for the award of the contract violated the Infrastructure Concession as Section 4 of the Act outlined that all approved Infrastructure projects and contracts for financing, construction and maintenance must be advertised for open competitive public bid, in at least three national dailies.
Achema added that Section 5 of the Act further clarified that any direct negotiations with only one contractor could be allowed, only after exhausting the provisions of Section 4.
He expressed worries that the Federal Ministry of Works in promoting the project has provided a rate per kilometer for the planned works, but has not provided the private partner’s financing sources, structure and competitiveness, saying “this is likely to create contingent liabilities to the Nigerian Government.”
He said the contingent liabilities accruing to the Federal Government of Nigeria on the coastal project “violate the Debt Management Office (Establishment) Act of 2023, as Section 22(3) states that the Minister shall not guarantee an external loan unless the terms and conditions of the loan shall have been laid before the National Assembly and approved by its resolution.”
He said the guarantees issued to cover the debt financing component of the coastal project do not have the approval of the National Assembly.
