FOI Act: Daily Times writes NNPC over $25bn contracts’

…NNPC fights back, denies Kachikwu’s allegations
…Says Baru followed due process in contract awards
…Agbakoba sues FG over lopsided appointments in NNPC

Myke Uzendu, Augustine Okezie, Jude Idu, Abuja and Peter Fowoyo, Lagos

Invoking the Freedom of Information Act (FOI 2011), the management of The Daily Times has written to the management of the Nigerian National Petroleum Corporation (NNPC), requesting the details of the controversial $25billion contracts awarded by the corporation.

In the letter dated October 9 and addressed to the NNPC Group Managing Director, Dr Maikanti Baru, The Daily Times is also requesting the corporation to furnish it with the details of the contracts including names of beneficial contractors, details of the contracts, the technical and financial bids as well as details of companies who were disqualified from the bid or who could not secure the contracts The newspaper added that the requests have become necessary following the controversy surrounding the said $25billion contracts award, saying that the development will go a long way in bringing the full facts before the public.

It also stated that the response from the NNPC will bring to an end, the claims and counter-claims from the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, Baru and other stakeholders.

The Daily Times recalls that Kachikwu had written to President Muhammadu Buhari, alleging insubordination, lopsided appointments and lack of due process in contracts award by the GMD as well as unhealthy working relationship between the duo.

Kachikwu had alleged that, “The legal and procedural requirements are that all contracts above $20million would need to be reviewed and approved by the Board of NNPC, Mr. President. Over one year of Dr. Baru’s tenure, no contract has been run through the Board. “The following major contracts were never reviewed by or discussed with me or Board of NNPC: The Crude Term contracts valued at over $10billion, The DSDP contracts- value over $5billion, The AKK pipeline contract- value approximately $3billion, Various financing allocation funding contracts with the NOCs – value over $3billion, Various NPDC production service contracts – value at over $3billion-$4billion. “My working relationship with GMDs has been fraught with humiliation, sidelining and campaigns of character defamation against me.
This is particularly frustrating given many contributions I have made to the growth and stability of the Nigerian oil and gas industry through the many policies I have introduced August 2015.”

But Baru has absolved himself of all wrongdoings, insisting that he is not answerable to Kachikwu.

In a statement signed by its Group General Manager, Public Affairs Division, Mr. Ndu Ughamadu and made available on Monday, the NNPC stated that it was “important to note from the outset that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.

The NNPC spokesman further disclosed that, “What is required is the processing and approval of contracts by the NNPC Tenders Board, the President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council, as the case may be.

Regarding the alleged lack of adherence to due process in the award of NNPC contracts, Ughamadu stated that Baru has responded to the directive of Buhari on the matter.

The Daily Times recalls that the President had last week Thursday held meetings with both Kachikwu and Baru on the leadership problem at the NNPC.

The Corporation also stated that during the meeting, Buhari ordered Baru to respond to the allegation leveled against him by Kachikwu.

It further stated that the substance of Kachikwu’s allegations against Baru in the letter to the President dated August 30, 2017 was that a number of major contracts were never reviewed or discussed with him and the NNPC Board.

But the NNPC stated that it was important to note from the outset that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.

It added that what was required was the processing and approval of contracts by the NNPC Tenders Board, the President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council (FEC), as the case may be.

Explaining the standard practice at the corporation, the NNPC spokesman said that “there are therefore situations where all that is required is the approval of the NNPC Tenders Board while, in other cases, based on the threshold, the award must be submitted for expediential approval.

Likewise, in some instances it is FEC approval that was required”. The statement further reads in part, “ It should be noted that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there were no specific values attached to each transaction to warrant the values of $10billion and $5billion respectively placed on them in the claim of Dr. Kachikwu.

“It is therefore inappropriate to attach arbitrary values to the shortlists with the aim of classifying the transactions as contracts above NNPC Tenders Board limit.

They are merely the shortlisting of prospective off-takers of crude oil and suppliers of petroleum products under agreed terms. These transactions were not required to be presented as contracts to the Board of NNPC and, of course, the monetary value of any crude oil eventually lift by any of the companies goes straight into the federation account and not to the company.

“Furthermore, contrary to the assertion of Dr. Kachikwu that he was never involved in the 2017/2018 contracting process for the Crude Oil Term Contracts, Dr. Kachikwu was in fact expressly consulted by the GMD and his recommendations were taken into account in following through the laid down procedure.

Thus, for him to turn around and claim that “…these major contracts were never reviewed or discussed with me…” is most unfortunate to say the least”.

On the processing of NNPC contracts, the NNPC spokesman stated that the contracting process in NNPC was governed by the rules provided in the act such as Provisions of the NNPC Act; The Public Procurement Act, 2007 (PPA); Procurement method and thresholds of application and the composition of Tenders Board as provided by the Secretary to the Government of the Federation (SGF) Circular reference no. SGF/OP/1/S.3/VIII/57, dated 11th March, 2009. Ughamadu added that the procedure is also guided by the NNPC Delegation of Authority Guide; Supply Chain Management Policy & Procedure documents and the NNPC Ethics Guide.

Speaking on the approving Authority for Contracts, Ughamadu stated that the SGF Circular on procurement threshold provided certain authority limits for NNPC transactions as well as the composition of the NNPC Tenders Board. He noted that the NNPC under Baru’s watch had cause to clarify from Bureau of Public Procurement (BPP) as to the composition of NNPC Tenders Board and the role of NNPC Board appointed by the Federal Government.

According to Ughamadu, the BPP makes following clarifications: That the BPP expressly clarified that NNPC Tenders Board (NTB) is not the same as NNPC Board; The governing board (NNPC Board) is responsible for approval of work programmes, corporate plans and budgets, while the NTB is responsible for approval of dayto- day procurement implementation; That the BPP referred to the SGF circular for the composition of the NTB to comprise the Accounting Officer (GMD NNPC) as the Chairman, with Heads of Department (GEDs) as members with the head of procurement (GGM SCM) serving as the Secretary of the NNPC Tenders Board.

The NNPC spokesman then said, “The above clarifications of the provisions of the procurement process show that approvals reside within the NTB and where thresholds are exceeded, the NNPC refers to FEC for approval. Therefore, the NNPC Board has no role in contracts approval process as advised by BPP.

“ As can be seen, all these clarifications were sought and obtained prior to August, 2015 and were implemented by Dr. Kachikwu as the GMD of NNPC. Dr. Kachikwu also constituted the first NNPC Tenders Board on 8th September, 2015 and continued to chair it until his exit in June, 2016.”

Explaining, typical NNPC Contracting Process, Ughamadu said that the approval of project proposal and contracting strategy by NTB includes placement of adverts for expression of interest in electronic and print media, Soliciting for tender (Technical and Commercial) Tender evaluation , Tender approval by NTB for contracts within its threshold; otherwise , Obtain BPP certificate of no objection before presentation to FEC and Present to FEC for approval.

He added that the contracts in the NNPC follow the above procedure. On the issue of disputed lack of due process as alleged by Kachikwu, the NNPC spokesman said that NAPIMS and JV partner identify bankable projects that require financing and sends to NNPC Corporate Finance to assist in procuring financing. Ughamadu therefore stated that the allegations against Baru were baseless, saying that due process had been followed in various activities at the NNPC.

Meanwhile, former President of the Nigerian Bar Association (NBA), Dr. Olisa Agbakoba (SAN), has dragged the Federal Government before a Federal High Court in Abuja, asking the court to declare that the distribution of appointment into the Board of the NNPC by the Federal Government, particularly the distribution/appointment made on 5 July 2016, is discriminatory .

He is also asking the court to note that the appointments are against him and other Nigerians indigenous to the states in the South-East geo-political zone comprising Anambra, Enugu, Ebonyi, Imo and Abia States. Agbakoba is further asking the court to hold that the distribution/appointment violates the fives states’ fundamental rights to freedom from discrimi nation, guaranteed by Section 42 of the 1999 Constitution.

He also named the Attorney General of the Federation (AGF) , the NNPC and the Federal Character Commission (FCC) as codefendants to the suit. Specifically, the applicant sought the court for an order declaring that the distribution of appointment into the Board of the NNPC by the Federal Government, particularly the distribution/appointment made on 5 July 2016, violates the principle of democracy, social justice and Federal Character prescribed by Section 14(1) and (13) of the 1999 Constitution; He is asking the court to declare that the said distribution of appointments also violates the guiding principles and formulae for the distribution of posts, as prescribed by Part 1, Sections 1 and 4 of Guiding principles and formulae for the distribution of all cadres of posts, the subsidiary legislation pursuant to Section 4(1)(a) of the Federal Character Commission (Establishment, etc.) Act of the 3rd Respondent. Agbakoba therefore asked the court for an order of perpetual injunction restraining the Federal Government from further violation of the Constitution and other laws of the Federal Republic of Nigeria, including the Federal Character Commission (Establishment, etc.) Act in appointment of members of the board of the 2nd respondent. He is further seeking an order of perpetual injunction directing the respondents to enforce compliance with the principles of democracy, social justice and all laws relating to Federal Character, including the Federal Character Commission (Establishment, etc.)

Act in appointing members of the Board of the NNPC. He also claimed that on July 5, 2016 the Federal Government appointed the following persons as members of the Board of the 2nd Respondent: Dr. Tajuddeen Umar (North East), Baru (North East), Mr. Abba Kyari (North East), Mr. Mahmoud Isa-Dutse (North Central), Mallam Mohammed Lawal, Mallam Yusuf Lawal, Kachikwu (South-South), Dr. Thomas M.A John (South-South) and Dr. Pius O. Akinyelure (South-West).

According to him, none of the above persons are from the states comprising the South-East Geopolitical Zone. He further stated that the Federal Government accords numerical advantage to States in other Geo-Political Zones, while excluding the South-East Geopolitical Zone, by denying the Zone representation the board of the NNPC.

According to Agbakoba, the development is discriminatory against the indigenes of states comprising the South-East Geopolitical Zone.

The case has not been assigned to any judge. PENGASSAN, NUPENG pay solidarity visit to Baru In a related development, the leaderships of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), have paid a solidarity visit to Baru and pledged their unalloyed support for ‘’his transformation stride.”

Speaking during the solidarity visit to the GMD, the National President of PENGASSAN, Comrade Francis Johnson, said the unions and their members considered it appropriate to rally round the GMD and the NNPC Management to pledge their support.

Johnson said “The National body of PENGASSAN and all the NNPC in-house unions are here today to show our support for you. You have brought stability to the NNPC and we are happy today that staff morale is high. You were Chairman of NNPC Anti-Corruption Committee for over five years and that was what informed your appointment as GMD of NNPC.

Today, all the bullets you are taking are on behalf of members of staff. We will continue to pray for you, God will continue to guide and shield you.” The NNPC Group Chairman of PENGASSAN, Comrade Sale Abdullahi, who also spoke during the visit to the GMD, stated that their concern had to do with the need to protect not only the GMD but the NNPC as an institution.

He said, “Today, the GMD and NNPC Management receive inputs from staff and this gesture by Dr. Baru has given members of staff a sense of belonging. Today, our inputs are being implemented and we are highly motivated.”

Supporting the stance of his colleagues, the Group Chairman of NNPC NUPENG, Comrade Udofia Odudu Benjamin, said the unions would continue to pray for divine guidance for Baru and the entire NNPC management Earlier, the Chairman of NNPC Corporate Headquarters Chapter of PENGASSAN, Comrade Mathew Duru, reiterated the continued support of the unions for Baru-led management.

He said, “We just want to tell the GMD from the bottom of our hearts that we are with him and the Top Management; that we are behind the GMD who has done very well in turning the fortunes of the Corporation around”.

Responding, Baru dismissed the allegations of award of contracts without regard to due process as unfounded and unfortunate. He explained that as a former chairman of the NNPC Anti-Corruption Committee, he would be the last person to breach the procurement process by disregarding extant laws and rules.

The GMD said both the NNPC Act and Public Procurement Act vested procurement powers on the NNPC Tenders Board, the President and the Federal Executive Council (FEC) depending on the cost threshold, stressing that the NNPC Board had no role whatsoever in the process.

He said “I know for those of you who are following what we are doing here, you know that there’s no money lost and no process has been breached. Our contracting process is perfect and we will continue to follow the process. The NNPC Board has no role, I repeat, has no role as far as the contracting process is concerned”.

Baru added that the NNPC Tenders Board was made up of the GMD as Chairman and the Group Executive Directors as members. On the crude term contract and the DSDP agreements, he said: “These are not contract as such; they are essentially pre-qualification of off-takers of crude oil and in the case of DSDP, of those that will take crude and give us products in return. So there is no value to them. But humongous figures have been put forward mainly to incite the public, it is most unfortunate”.