By Gbenga Abulude
The House of Representatives on Monday said it has uncovered a $33 billion contract with an empty loan repayment documents signed by the Ministry of Transportation and the Chinese government for the development of Nigeria’s railway sector.
The House also said that the document was signed even before the terms of the loans were negotiated and most of the contracts agreement did not have local content clauses.
The Chairman, House Committee on Treaties, Protocols and Agreements, Honourable Ossai Nicholas Ossai disclosed this during an investigative hearing on the review of bilateral loan agreements and commercial contracts agreements by Ministries, Departments and Agencies (MDAs).
However, the Minister of Transportation, Mr Rotimi Amaechi who was at the meeting, averred that there was no such contract existing in the Ministry.
He said the only contract was the $1.6 billion loan for the Lagos-Ibadan rail project signed by the Buhari-government and the $800 million loan signed by the Jonathan-government.
The minister challenged the Committee to furnish his Ministry with details of the contract to enable them respond appropriately.
Hon Ossai said, “We have noticed from documents available to us that commercial contracts process signed by Federal Ministry of Transport alone is over $33 billion without any clear cut financing arrangements. Most of these commercial contracts agreements didn’t also have local content clauses and we’re witnessed by none properly designated and authorised officials.
“We have also noted comments on the facts that National Assembly approved these loans, so why turn around to probe it now? Well, I remember stating in our last meeting here, that executive scrutiny and oversight by the legislature on government policies, programmes and projects can be done at the beginning, during implementation and at the end of implementation.
“From our experience, the MDAs sign these commercial agreements in billions of dollars, then go to the President and Federal Executive Council for approval to execute including securing loan facilities through Ministry of Finance and Debt Management Office (DMO) and then proceed to negotiate the terms of these loans before coming back to Mr. President who then writes the National Assembly asking for approval for billions of dollars to do projects without attaching the negotiated loan and commercial contracts agreements details.
Hon Ossai, explaining further said,
“This approach is the reason we have government representatives signing empty pages of loan agreements repayment schedule and other key documents required for the loan agreements to become effective. We have commercial contracts signed in US Dollars, while the loan agreements for the execution of the same contracts were signed in Chinese YUAN currency in Ministry of Communications and Digital Economy/Galaxy Backbone Limited.
He observed that there are issues relating to procurement process, evidences of 15% advanced payments, payment of management fees, drawdown process and remittances and other matters, which mandated the House to ask questions hoping to get honest answers that will make current process better and plans for possible negotiation in order to serve Nigerians better.
Earlier, before his briefing, there was drama at the sitting between Amaechi and House Committee chairman, Ossai as they openly disagreed on contents of the loans and other procedures for execution. It wore on until the Speaker of House of Representatives, Honourable Femi Gbajabiamila waded in by asking the Committee go on a recess and resume shortly.
