The claim by the Minister of State for Petroleum Resources, Ibe Kachikwu, that the Group Managing Director of the Nigerian National Petroleum Corporation, Maikanti Baru, inappropriately awarded contract for the N885 billion Ajaokuta-Kaduna-Kano (AKK) Gas pipeline project is false, an investigation by PREMIUM TIMES has shown.
Also untrue, our findings show, is Mr. Kachikwu’s claim that President Muhammadu Buhari approved the contract after Mr. Baru initiated an inappropriate award process that sidelined him (Mr. Kachikwu) and the NNPC board.
In his controversial August 30, 2017 memo to President Buhari, Mr. Baru had, among other allegations, accused Mr. Baru of flouting due process in the award of the $2.89 billion (about N885 billion at N306.3 to one U.S dollar) AKK contract.
But in a curious move, Mr. Kachikwu, on December 13, presented the same contract to the Federal Executive Council, seeking approval to award it.
When PREMIUM TIMES asked him why he sought approval for a contract he accused the NNPC of inappropriately awarding three months earlier, the minister said his action was meant to correct the irregularity in the initial award process carried out by Mr. Baru.
“What I wrote to the President in my memo, which was presented to FEC, was to remind him that these were some of the contracts he had already approved,” Mr. Kachikwu said .
“What I complained about (in memo to the President) was about due process not being following in the initial approvals obtained without seeking my concurrence or input.
“What I did was an inverse approval process, which is post-the fact, by taking the details of the contract tender back to the NNPC Board, briefed its members and obtained their buy-ins.
“The due process is that before contracts go to FEC, they should go first to the Board of the company, in this case NNPC, to give everyone the opportunity to make their inputs.”
But PREMIUM TIMES can report authoritatively today that Mr. Kachikwu was economical with the truth as far as this particular contract is concerned.
The contract was neither awarded by Mr. Baru nor was it ever approved by Mr. Buhari before that December 13 when the minister presented it before FEC.
In his memo to FEC, sighted by this newspaper, Mr. Kachikwu, contrary to what he told this newspaper, did not indicate anywhere that Mr. Buhari had earlier approved the contract, and that he only sought an “inverse approval process”.
To award a contract of that magnitude, which is being executed on a build and transfer basis through contractor financing model, the NNPC needed to obtain three key certificates from three separate federal agencies to proceed.
They are Due Process Certificate of “No Objection” from the Bureau of Public Procurement (BPP), a Certificate of Authorization from the Nigerian Content Development & Monitoring Board (NCDMB) and Outline Business Case (OBC) Compliance Certificate from the Infrastructure Concession Regulatory Commission (ICRC).
Our findings showed that the BPP Due Process Certificate and the NCDMB Certificate of Authorization Mr. Kachikwu attached to his memo to FEC were only issued on August 31, 2017 and October 6, 2017 respectively, days after the minister petitioned Mr. Buhari. It was only the OBC Compliance Certificate that was issued on July 10, 2017.
Those familiar with contracting procedures in the oil and gas industry said there was no way Mr. Baru could have awarded the contract without presenting those three certificates. Yet, the Minister had written to Mr. Buhari on August 30, accusing the NNPC GMD of wrongdoing.
NNPC is right
In its October 9, 2017 response to Mr. Kachikwu’s August 30 complaint to Mr. Buhari, the NNPC had explained that the AKK Gas Pipeline Contract had not been awarded because the procurement process had not been completed.
The state-owned oil company explained that although Certificates from BPP and ICRC had been obtained, that of NCDMB was being awaited after which the contract would be presented to FEC for consideration and approval.
The corporation repeated that explanation on December 14 after Mr. Kachikwu again claimed the contract was long awarded and that he only sought an “inverse approval” from FEC.
The Corporation described as “most unfortunate the continued claim that there was an approval for the contract, which had to be represented to FEC to correct any infringement.
“The AKK pipeline contract tender followed due process,” the NNPC said. “The tender for the contract was considered and endorsed by NNPC Tenders Board NTB on July 12, for consideration by FEC in line with the tendering process that it should present all contracts for approval.
“It was never approved by Mr. President, nor considered by FEC prior to 13th December, 2017.”
CONCLUSION: Mr. Kachikwu’s memo to FEC does not support his claim that the AKK project was long awarded, in breach of due process.
Documents reviewed by this newspaper as well as interviews with those who should know also indicate that the NNPC followed due process in the award of the contract.
They also showed that the contract was never approved by Mr. Buhari before December 13, when the minister presented it before FEC.