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Market Digest Nigeria

Economy

Transport Ministry, BPP Appear in Court over $3.1b Rail Projects

 Almost a month after the case against Ministry of Transport and Bureau of Public Procurement was of at a Federal High Court in Abuja, the ministry finally appeared before the court after series of denial.

Before their appearance in court at the last adjourned date, the ministry had severally denied ever being served with the court summons.

An indigenous firm, Insight Dynamic Resources Limited, had dragged the minister of transport and the BPP Director-General before the court over alleged violation of procurement Act.

The plaintiff Musa Ibrahim Kuchi is praying the court to interpret the public procurement Act 2007 and also to look at the documents ministry of transport forwarded to BPP to secured certificate of No Objection and determine, if procurement process was followed in the contract awarded to Chinese Civil Engineering Construction Company, CCECC.

After the case was filed, the ministry had failed to show up in court on three different occasions, December 2, 8 and 14 and was not also represented by any counsel.

But at the last adjourned date, December 21, the director of legal services of the ministry, Mr. Gabriel Fan, appeared in court but was not prepared as his team did not filed any defense.

On the part of the BPP, Mr. A. O Zibiri and Mr T. N Muje appeared and served the plaintiff counsel Richard Ubeh, with their defense.

Earlier, Justice Inyang Ekwo of a Federal High Court sitting in Abuja, had ordered the ministry of transportation and the bureau of public procurement to maintain status-quo in the award of contract for construction of $3.1b Port-harcourt – Maiduguri Rail Project contract pending the determination of the motion filed challenging award of the contract.

When the case came up on December 21, Justice Ekwo, told parties in the cases before the court to take another date as he could no longer hear any case for the day.

The case was adjourned to 15th of January, 2021 to give 1st defendant time to prepare their defense in the case

The Federal Executive Council recently approved the award of a contract to a Chinese firm, CCECC, for the rehabilitation and reconstruction of the Eastern line for $3.1bn.

According to the plaintiff, through his lead counsel, Kabiru Turaki, SAN, the minister of transport, Dr. Rotimi Amaechi and Mamman Ahmadu, BPP DG’s action contravened “the provisions of the public procurement Act as stipulated by the provision of Section 58 (5) (a) of the Public Procurement Act, 2007.”

The plaintiff also prayed the court to set aside the contractual agreement between the federal government and the Chinese Civil Engineering Construction Company (CCECC) for the rail project.

The plaintiff claimed that the purported action by the minister denied his partners AECOM who are being backed by US Eximbank other interested and capable companies the fairground to compete for the said contract due to Minister notorious stance against transperancy.

US Eximbank offered less than two percent interest rate but it was ignored because they wanted government to government bilateral agreement

It added that the minister’s action contravened the spirit and provision of Section 16 and 40 of the Public Procurement Act, 2007.Sections 16 and 40 of the Public Procurement Act 2007 stipulate five years imprisonment without an option of fine for such an infringement.

The court has a lot of interesting stakeholders in attendance including foreign observers who came to wetness unprecedented legal tussle but most were left disappointed as the court adjourned till new year

Kuchi said Minister wrote a letter to BPP and said that the President has approved only CCECC price assessment for consideration.

The plaintiff is challenging the consideration given to only CCECC, as according to him, there’s no provision or clause for such presidential fiat under public procurement Act for such multiple billion dollars project.

“It’s a process we will challenge to any level. We won’t be gullible into accepting such lack of transperency and flawed procurement process. It’s only under emergency or if the nation is in crisis that such fait can be entertained. We can’t be intimidated to accept such abuse of process by Ameachi ” kuchi vowed.

He also said, ” the minister wants to take a loan for the project from the Industrial and Commercial Bank of China Ltd ( a private financial institution) to be backstopped by a sovereign guarantee at an interest rate of more than 3% whereas the US Eximbank offers a cheaper interest rate of 1.8% which the ministry spurned. This may explain why the minister has been claiming that there is no alternative to China for funding of the railway projects even after US Eximbank has written over 80 mails to support railway development in Nigeria”.

He said only Lagos – Ibadan Rail project is being finance by Chinese Eximbank.

According to him, all other projects are Chinese private commercial Bank, which is wrong, especially, where Nigeria’s sovereignty guarantee is involved”

Kuchi said it is unimaginable for minister to ignore government-to-government loan arrangements with lower interest rates such as offered by the United States Eximbank.

kuchi is challenging the process Of the award of contract claiming FMOT and BPP only used presidential fiat to approve and select only CCECC as a preferred bidder and he is seeking an order of the court to overturn FEC as presidential approval cannot override the provision of law except there is a national crisis and the NASS would have to give him the power first.

Sections 16 and 40 of the Public Procurement Act 2007 clearly stipulates five years imprisonment without option of fine for such an infringement.

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