By Yohanna Ibn Sarki.
The Bureau of Public Procurement (BPP) Establishment Law was signed by former President Olusegun Obasanjo on the 4th of June 2007 to ensure that due process was followed before any major contract is awarded.
The establishment of the Bureau was as a result of a World Bank Public Procurement Assessment Survey that was carried out in 1999 to establish the impact of corruption on infrastructural development in Nigeria.
The Report revealed that 60 kobo was being lost to underhand practices out of every N1.00 spent by Government and that an average of ten Billion US Dollars ($10b) was being lost annually due to fraudulent practices in the award and execution of public contracts through inflation of contract cost, lack of procurement plans, poor project prioritization, poor budgeting processes, lack of competition and value for money, and other kinds of manipulations of the procurement and contract award processes.
Part of the objectives of setting up the BPP were to ensure the application of fair, competitive, transparent, value-for-money standards and practices for the procurement and disposal of public assets; and attain transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.
The Bureau was tasked with the responsibility of reviewing contract costs and after ascertaining that the cost was within reasonable margin, issues a due process certificate before the project is presented to the Federal Executive Council (FEC) for consideration and approval.
Exactly 10 years down the line, it is necessary to review the performance of the Bureau in the light of the second Abuja runway project that was approved in 2009 which was later turned down after being resisted by the National Assembly.
The second Abuja runway contract was approved and awarded to Julius Berger by the FEC in 2009 after due diligence had been done by the BPP to ensure Due Process was complied with and the contract sum was within reasonable cost. Hence, the normal issuance of a Due Process Certificate by the Bureau which made the Project qualified for presentation to the FEC.
The Contract was for the construction of a 4 kilometres runway at the cost of N63.5 Billion (Sixty-three Billion, Five Hundred Million Naira only), which was equivalent to US$445.46 Million (Four Hundred and Forty-five Million, Four Hundred and Sixty Thousand US Dollars) going by the CBN exchange rate of US$1 = N146.59 in 2009.
The contract was to be completed within a period of 24 months and going by Nigerian standards there might have been an upward review of the contract before completion.
However, with a benefit of doubt let’s assume this would not be the case in this regards.
Although the contract was eventually cancelled, it is necessary to draw lessons using this project to evaluate the performance of the BPP and the cost of projects in Nigeria.
Two years earlier, the Government of Pakistan had awarded a contract for the construction of a new international airport at the cost of PK Rupees 32 billion which was equivalent to US$383.41 Million using the 2009 exchange rate for the purpose of comparison.
The airport was to be built from scratch on a virgin land of more than 3200 acres and was to have 2 parallel 4 kilometre runways (28L/10R, 28R/10L), with taxiways, apron and parking facilities for wide body aircraft such as the Airbus A380 (presently the largest aircraft in the world) and the Boeing 747-8 aircraft.
The airport was to have have an 180,000m2 modular terminal building which would initially take nine million passengers and 80,000 metric tonnes of cargo per annum but projected to handle over 25 million passengers by 2024.
Additionally, it was to have a cargo terminal, air traffic control complex, fuel farm, as well as fire, crash and rescue facilities.
At the time of awarding this contract for the sum of US$383.41 Million, Nigeria awarded a contract for just one four-kilometre runway at US$445,460 Million two years later.
The contract sum for the Nigerian Project was about US$62.05 Million more than the estimated cost of completing the Pakistani airport Project with all the aforementioned facilities, including two different 4-kilometre runways, which would have been the same length as the single runway Nigeria was going to construct.
The distance of the Pakistani capital, Islamabad, is about 1,479.7 kilometres from the Karachi port which is almost twice the distance from Lagos to Abuja, which is about 752.6 kilometres. This should actually make the Pakistani airport construction a more expensive project to execute considering the distance of moving imported materials.
The presentation so far made was at the stage of awarding both contracts.The project delayed this long as stated by the Pakistani government that there was lack of proper planning before the contract was awarded. Presently, the airport is 97 percent completed and the official commissioning is expected to be in December 2017.
However, the completion cost of the Project escalated to PK Rupees 82 billion which is equivalent to US$742 million (using 2017 exchange rate). The citizens complained about the escalation but this is still very modest compared to the runway contract approved for Abuja.
Mind you this new airport has 2 new runways both of equal length with the runway proposed for Abuja International Airport. Going by the Contract sum awarded by the Nigerian Government, the US$742 million cost of completing the new Benazir Bhutto International Airport will not be sufficient to construct two 4 kilometre runways. We would have required US$890.920 million to construct only 2 runways less the money for the other facilities. Wow.
The objective of this review is not to raise past issues but to see the need for those in government to be humane in what they do. Little money achieve very much in other countries while in Nigeria a lot of money achieves very little, and sometimes a failed project or nothing at all.
I personally will not in any way blame the erstwhile President on this matter because he is not a builder or an expert in construction. In my opinion, the head of the agency responsible for reviewing the contract and the BPP should be held liable for this kind of financial rascality.
Most times we blame our leaders for exaggerated projects like the Abuja second runway. However, it is the ministers and head of agencies who play on the ignorance of the President in such areas (the President cannot know everything and depends on his chief advisers who is the minister to guide him appropriately). The BPP would also be culpable for grossly failing in performance of its statutory duty. How could they have issued a due process certificate for such a project at such an exorbitant cost, what kind of due process was that?
I will not like to imagine if there was no BPP, perhaps, the cost would have trebled.
The Pakistani Government does not have a due process Bureau or anything like that but just Patriotism was what made them achieve this great milestone. How about the company that submitted the proposal? That is left for us all to decide.
Going by this review, the road to judicious use of Government funds is premised on patriotism, nationality and integrity. No amount of due process can help if these three qualities are not present in the life of our leaders.
For us citizens, we need to hold our government officials and agencies accountable and review every project being embarked upon by the nation to ensure we are not being taken for a ride.
The runway project was a sure ride to perdition by the then minister and head of BPP. A lot is left to be imagined if every contract in Nigeria was scrutinized like this.
Thanks to Senator Melaye and his group that thwarted the project because by December when Pakistan would be celebrating the completion of its ultra-modern green airport Nigeria would have only been celebrating an addition of one 4 kilometre runway and a second runway just 2.67 kilometre long to Abuja airport for the same amount.
How Nigeria is milked dry, the Pakistan comparison
By Yohanna Ibn Sarki.