Crude oil, gas exports: Reps accuse Finance Ministry of breach in appointing consultants

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…Threaten to cut oil supply to Conoil over debt 

From Kemi Yesufu and Ndubuisi Orji, Abuja

The House of Representatives has mandated its  committees on Public Procurement and Finance to investigate allegations of abuse, breach and violation of the Public Procurement Act of 2007 in the engagement of consultants for pre-shipment inspection and monitoring of crude oil and gas exports from Nigeria.

The committees are to report back to the House within five weeks for further legislative action. The resolution of the House was sequel to a motion by Babatunde Kolawole.

Kolawole, in his lead debate, said the ongoing tendering process is fraught with allegations of abuses by vested interests in the Federal Ministry of Finance, who are selecting non-responsive companies that do not meet basic statutory requirements like possession of valid PenCom certificates as required by the Public Procurement Act.

The lawmaker argued that if urgent steps are not taken to investigate the allegations, non-responsive and incompetent consultants would be engaged, which  will undermine the entire pre-shipment inspection and monitoring exercise, thus leading to huge revenue losses.

He said, “in June 2015, the President mandated the Federal Ministry of Finance to commence the process of engaging pre-shipment inspectors and monitoring agents and based on the approval of the Bureau for Public Procurement (BPP), selective tendering was adopted. “In December 2015, after the selection of 65 companies to participate in the biding stage, the Minister of Finance ordered the immediate cancellation of the tendering process on the grounds of lack of transparency, accountability and on the basis of a formal complaint from the BPP.

“In furtherance of the above, the Federal Ministry of Finance initiated a fresh tendering process in February 2016. The ongoing tendering process has been fraught with allegations of abuses by vested interests in the Federal Ministry of Finance who are selecting non-responsive companies that do not meet basic statutory requirements like possession of valid PenCom certificates as required by the Public Procurement Act,” Kolawole said.

Speaking in support of the motion, Minority Leader of the House, Leo Ogor, Deputy Majority Leader, Umar Buba Jibril, and Segun Odebunmi backed the call for a thorough investigation.

“When you see the people that are saddled with the responsibility to make things right compromising, then we must take the issue of the violation of the law seriously. Things must be done according to laid down rules,” Odebunmi said.

The prayers of the motion was passed after the Speaker of the House, Yakubu Dogara, called for a voice vote.

Meanwhile, the lawmakers have given Conoil Plc and other oil companies indebted to the Petroleum Products Marketing Company (PPMC) a one-week ultimatum to pay half of their debts or risk being cut off from further supplies of petroleum products.

Conoil owes the PPMC a total of N3.18 billion  debt, while Oando-OVH Energy Nigeria Ltd is oweing N4.5 billion.

The Chairman, House ad-hoc committee investigating debts owed the PPMC, Mahmud  Gaya, gave the order yesterday at a hearing of the committee. The committee has a mandate to recover debts owed PPMC by oil marketers.

It frowned at the huge debt owed the PPMC by oil companies, noting that it is disheartening that oil companies after  getting supplies from the marketing company fail to pay for the products within 15 days as stipulated in the terms of engagement between them.

Consequently, the committee said the terms of contract for lifting petroleum products between the marketers and PPMC would be reviewed to include penalties for default in payment.

Gaya added that lack of enforcement of penalties for oil marketers, who default in payment for petroleum products was responsible for the huge debts owed PPMC by the oil companies.

“ We will not allow you take products again except you pay 50 per cent of your debt. The reason we are here is to recover the money,” Gaya stated.

Speaking at the investigative hearing, the Financial Controller, Conoil, Mr. Abdulateef Ijaiya, admitted that the company defaulted in its obligation to PPMC in respect of products it received. However, he said the company was in the process of paying 50 per cent of its debt to PPMC.

Although oil companies are supposed to pay penalty when they default in payment, Ijaiya admitted before the ad-hoc committee that the last time his company paid penalty for default was in 2012.

On her part, the Acting Chief Executive Officer, Mrs. Williams Olaposi, said her company has reached an agreement with PPMC to pay off its debt between January and June 2017.

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