The House said the 2007 Procurement Act was violated on the Lagos-Calabar coastal highway contract and that certain approvals by the National Assembly were not given.
The House of Representatives has taken a resolution to investigate the procurement process of the Lagos-Calabar coastal highway.
The House also summoned the Minister of Works David Umahi; Minister of Finance Wale Edun; and the Attorney-General of the Federation and Minister of Justice Lateef Fagbemi, before it to ensure that all project guarantees and credit enhancement instruments are sent to the National Assembly for approval.
The Green Chamber equally mandated its committees on Procurement and Works to investigate the procurement process of the contract.
The adoption of these resolutions followed a matter of urgent importance by Rep. Austin Achado (APC Benue) on Thursday.
Achado said, “The House is disturbed that the contingent liabilities accruing to the Federal Government of Nigeria on this 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.
“The guarantees issued to cover the debt financing component of this project do not have the approval of this National Assembly.”
Speaking further, he noted that the Federal Ministry of Works had executed an Engineering Procurement Construction and Finance (EPC+F) contract, in favour of Hitech Construction Company Nigeria Limited, for the delivery of the 700km Lagos to Calabar Coastal Road and Rail Project estimated at a rate of N4.329 billion per kilometre, using reinforced concrete technology for a carriage width of 59.7metres to include 10 lanes, shoulders and rail with additional designs of service ducts, street lights, drainages and shore protection.
He further noted that the project, with the prospect of providing easy access for the movement of goods and services across the nation, has a financing structure, as announced by the Minister of Works, which required the Federal Government to provide 15 to 30% co-financing, while the private sector counterpart will provide the balance, and toll the road when completed for a minimum period of 15 years, to ensure full recovery of all debts and equity applied for the delivery of the project.
The lawmaker expressed concerns that the procurement strategy might have violated the Public Procurement Act 2007, Section 40(2) which required 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 could provide such goods and services.
According to him, the procurement strategy adopted by the Federal Ministry of Works for the award of the contract violates the Infrastructure Concession and Regulatory Commission Act 2905, as Section 4 of the Act outlines 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 and Section 5 of the Act further clarifies that any direct negotiations with only one contractor could be allowed, only after exhausting the provisions of section 4.
He expressed concern that the Federal Ministry of Works, in promoting the project, has provided a rate per kilometre for the planned works, but has not provided the private partner’s financing sources, structure and competitiveness, as this was likely to create contingent liabilities to the Nigerian government.
The House, therefore, asked its committee to report back within four weeks.
OrderPaper had rightfully predicted that the demolitions and the controversies around the contract approval for the Lagos-Calabar coastal highway would be raised at the National Assembly.
