The Minister of Works and Housing, Babatunde Fashola, on Monday said that there was no case of inflation in the various contracts awarded by the Nigerian government in 2018.
The minister, who was reacting to allegations of contract inflation levelled against his ministry by the Bureau of Public Procurement (BPP), asked the agency to publish its rates and “clear the air on the lingering issue of alleged contract inflation reported in the media last week”.
The minister was reacting to a report which revealed that the BPP saved over N26 billion for the government in the year 2018 by revising down “inflated” contract sums by government contractors.
According to the report, the savings are from the review of contracts awarded to contractors by various Ministries, Departments and Agencies (MDAs) before being given certificates of “No Objection’’ by the bureau.
The report showed that in 2018, 86 certificates of “No Objection’’ were given out by the bureau to MDAs for contracts initially totaling N1.4 trillion but was later reduced to N1.4 trillion.
Of the savings made, the highest amount of N22.2 billion was recorded from the erstwhile Ministry of Power, Works and Housing, the report showed. The money was allegedly saved from an initial request of N877.4 billion.
‘Not true’ says Fashola
But in a statement by Hakeem Bello, Mr Fashola’s spokesperson, the minister said that there has been “misleading” report of the issue in the media.
“Being a department of the same government, ordinarily this should not warrant a reply; however the misleading nature of the reporting in the media and the statements credited to BPP compel a response for the purposes of clarification and enlightenment of the public,” the statement said.
“Any person who takes time to read the provisions of the Public Procurement Act, which created the BPP will understand that no contract can be awarded until BPP certifies that it has NO OBJECTION.
“Therefore there was no INFLATED contract because BPP clearly stated that it reduced the costs, and according to BPP she “… saved over N26 Billion…” And this is the heart of the matter, because BPP’s “ savings” can only be a SUBJECTIVE assessment based on rates quoted by contractors, reviewed by the Ministry , and sent to BPP for certification.”
The minister said that until BPP publishes its rates which the then Ministry of Power, Works and Housing, under his leadership, has demanded in writing, there can be no “objective” basis for determining whether any “savings” were indeed made “if only BPP knows its own rates for procurement.”
“Once rates are published and design is known, quantities can be ascertained and costs can be determined,” Mr Fashola said.
“This is the field of Quantity Surveyors and Construction Economists, and the Minister of Works and Housing has not made any secret about his call for a revision of the Public Procurement Act to resolve this and other gaps in the Law.
“Indeed, during the first term of this Administration, the Ministry of Power, Works and Housing had commissioned the compilation of a service wide Rate of major items of procurement from the largest to the smallest for BPP to consider, adopt or amend and publish.”