Emmanuel Ukudolo l Friday, September 20, 2019
LAGOS, Nigeria – Mind boggling figures have emerged, portraying General Electric(GE), Rockson International as actually enemies and not friends of Nigeria. They have scammed government and the Nigerian people under pretext of handling power projects for government, using the Kaduna Power project awarded 19th November 2009 as a case study. This project was awarded when Chief Olusegun Obasanjo was President.
As structured and executed, the contract is a complete and total negation of the commitment of GE to develop the power sector of Nigeria. GE did not give back anything to Nigeria in exchange for the billions of dollars it has taken out of the country
A report titled” Kept in darkness, holding non-performing electricity contractors accountable” presented by Dr. Yemi Oke, Associate Professor, Faculty of Law, University of Lagos in behalf of Centre for Health Equity andJustice (CEHEJ), noted that General Electric, Rockson and Nuovo Pgnone SPA were awarded the contract at an equivalent sum of Euro 156, 138, 696.22 which amounts to N62, 369, 636, 586.98 based on current conversion rate.
Despite this monumental rip-off, the Federal Government, under President Muhammadu Buhari has gone ahead to sign an MoU with GE for $1 billion.
According to the report, the contract typifies unusual level of corruption and reckless connivance between coporation-public officials and others. “The study finds that not only was the contract awarded under questionable circumstances in a most suspicious manner to the same General Electric(GE), it represents a typical case of uniqueness in power sector corruption”, the report pronounced.
CEHEJ explained that the contract signed by GE and Rockson with the Federal Ministry of Power(FMOP) presents very strange features that call for attention.
“Firstly, the contract named GE and Rockson as contractor but went ahead to not only split thier work scopes in the contract but also provide that their liabilities shall be several and not joint”, CEHEJ noted, wondering why the liability of a contractor shall be treated as several and not joint when it was a joint bid.
“What happened to the rule of consortia contracts? Why did a team of joint bidders who upon winning the tender become seperated in their liabilities? How come GE that is named as the leader of the consortium not held responsible for acts done by the consortium across board? These vital questions are left unanswered thus making the whole deal shady, wooly and lacking in transparency”, the report noted.
Besides, the lecturer pointed out that there is no termination clause in the contract. ” This is particularly significant in view of the fact that the contract does not provide for what the Federal Ministry of Power(FMOP) could do in the event of failure by the contractor as has happened in this project”, he said, stressing that the way and manner the deal is structured throws up suspicion that the objective is to make FMOP helpless and incapacitated which is not only strange but also inappropriate and unconventional.
The report pointed out that though Rockson Engineering is currently in receivership by the Asset Management Corporation of Nigeria(AMCON), it retains a stranglehold on the project when the law of insolvency and receivership vis-a-vis contractual capacity and termination of contracts ordinarily ought to have crystalised to re-characterise the contract.
CEHEJ in the report explained that the contract was designed to fail from the beginning since the government is inhibited from exercising statutory rights as project owner despite huge significance of the project to Nigeria’s economy. Curiosly, the report discovered that the project has no provision for a mandatory take over and completion of the work handled by any member of the consortium by the other member in the event of failure or lack of capacity to perform.
“By the nature and structure of the contract, an impression has been created that GE simply used the contract as a scheme to dump equipment on Nigeria and disappear, having received money in full while the government of Nigeria continues to bear the losses and burden of useless, unused, outdated and possibly disused pieces of equipment”, he said.
Besides, the reported noted that the contract has no provision for liquidated damages for late delivery. ” The absence of such liquidated damages clause for late delivery has rewarded the contractor(GE and Rockson) with unlimited incentive not to perform on the contract. Under this contract, failure to perform simply gets rewarded as against being sanctioned or penalised.
“It is assumed, based on findings made in this research that GE might have schemed or structured the contract in a way to avoid any penalty from the government of Nigeria for dumping disused turbines on the country in exchange for taxpayers’ Dollars invested in project by the Nigerian government.
“As structured and executed, the contract is a complete and total negation of the commitment of GE to develop the power sector of Nigeria. GE did not give back anything to Nigeria in exchange for the billions of dollars it has taken out of the country”, the report noted. Besides, the study found out that by comparative analysis, pricing of the contract was curious, bloated and expensive for Nigerian taxpayers and government.
