By Jossy Nkwocha
Newswatch VOL 31, Nos. 9 & 10, March 13, 2000
How did N500 million belonging to the Petroleum Trust Fund, PTF, disappear mysteriously? That is one of the questions being raised in the preliminary report of the Interim Management Committee, IMC-PTF, set up by President Olusegun Obasanjo to wind-down the activities of the organisation.
Newswatch gathered that the money was put in a bank by the erstwhile management led by Muhammadu Buhari, retired major-general and former head of state. But when the IMC-PTF took over the operations of the body, it discovered that the money had been withdrawn by unidentified persons.
Haroun Adamu, executive chairman of IMF-PTF who confirmed the story, said: “They took in N500 million but by the time we came in, there was no one kobo from the deposit.” According to Newswatch investigations, both the bank and Buhari were dragged before President Obasanjo who insisted that the money must be recovered. Adamu told Newswatch in Abuja a fortnight ago that the bank has now agreed to pay back the money in seven years but his committee insists that the money should be refunded as soon as possible. Adamu neither named of the bank nor say whether or not Buhari was personally involved in the matter.
The mysterious withdrawal of the money is one of the allegations levelled against the Buhari-led past administration of PTF by the IMC which seems to have put the four-year tenure of Buhari as the executive chairman of PTF under intensive searchlight. Although Adamu insists that Buhari is not under probe, he said that a technical audit/verification exercise being carried out by the committee shows that a lot of ugly things had taken place under the acclaimed no-nonsense retired army general.
The committee is asking questions about several contracts worth N207 billion awarded by PTF under Buhari. It is also raising serious doubts over different payments totalling N135.59 billion made by the Fund for various projects, leaving a debt burden of more than N70 billion owed numerous contractors, consultants, manufacturers, publishers and suppliers who are now waging a big war against the IMC-PTF.
Some of the other unwholesome things dug up by the IMC include the “unholy” alliance that existed between the Buhari led PTF and Afri-Project Consortium, APC, a private consultancy company, which literally and exclusively ran the affairs of the fund, and the alleged over-inflation of contract sums such as the one involving the N650 million extension of the PTF headquarters in Abuja; IMC is also alleging serious contractual anomaly in the N800 million PTF staff housing estate; importation of expired drugs especially the N28 billion HIV/AIDS screening and confirmation kits as well as the mysterious disappearance of the N500 million.
The missing money, in fact, exposed the kind of “unholy” business relationship that existed between PTF of the Buhari era and APC led by late Salihijo Ahmad, a 42-year old businessman from Adamawa State. Newswatch learnt that the APC consultants virtually managed PTF. In fact, a report prepared by the IMC showed that APC was really in charge, not Buhari.
“When the IMC took over the management of PTF, there were no contract documents, drawings, or specifications relating to committed projects within the premises of PTF headquarters. All that were available were lists of projects and programmes in the following sectors: roads and road transportation, water supply, education, food supply, health and other projects. The client as is mandatory in all contractual relationships is expected to have in his possession, the client’s copies of all documents relating to projects on which payments have been made. In PTF, this was not so,” the report stated.
It went further to say that “all documents (including the mandatory client’s copies) were in possession of Afri-Project Consortium, APC, who were appointed as the sole management consultants to PTF.” APC was also said to be responsible for the corporate development and recruitment of staff for PTF. The IMC report said that PTF in its operation was not functioning as a government agency in the real sense. “APC was actually the real PTF and yet it was a private company,” it lamented.
One area of the PTF-APC alliance that worried the Adamu-led committee was the fact that Buhari delegated his powers as executive chairman of PTF to the APC. The IMC also discovered that the “power of the engineer” which normally should reside with the client (PTF) was delegated to APC through a letter. “With this power of the engineer, APC was able to award contracts and vary same without any reference to PTF,” the IMC report stated.
Newswatch gathered that PTF had about 620 consultancy firms reported to the APC, which had the sole responsibility for the issuance of certificates for payments by PTF. Indeed, too much power and responsibilities were said to have been given to the APC. Adamu told Newswatch that the situation created a scenario where proper procedures were not followed in the award of contracts. Some of the contracts, it was gathered, were inflated by more than 100 percent. In many cases, no bidding was taken. People were just given the contracts and contract sums slapped on unilaterally.
When the Adamu-led committee was set up, the members visited Ahmad, the managing consultant of APC, in his office to look into the issues. He promised to make all records available to the committee and gave Adamu an appointment for Monday July 5. Before he could keep the appointment, he suddenly collapsed and died that day.
Official sources within the IMC informed Newswatch that the committee was therefore determined to take full control of the activities of PTF from the APC. It wrote a letter to the sole consultants demanding the client’s copies of all documents relating to all projects and programmes of PTF. It also withdrew the “power of the engineer” delegated to thefirm by Buhari.
In response , APC sent to the IMC a letter of resignation as management consultants to PTF. It gave a three-month notice expiring on November 15, 1999 during which all PTF project documents in the company’s possession would be physically handed over to the IMC. The IMC is now in full control of PTF.
The technical audit/verification exercise embarked upon by the committee has shown that “projects were abandoned at random and completion rates were no higher than 30 percent with contractors holding on to vast sums of advance payments.” Newswatch learnt that PTF had a multi-layer of consultants (about 620) who were paid hundreds of millions of naira as consultancy fees. It was also gathered that there was no performance evaluation criteria for any of the management consultants including APC.
“What has been discovered is that the consultants were working at their own pace and space and as long as APC did not raise any query, everything was alright,” the IMC source said, adding, “in spite of the array of consultants at different layers, the supervision of projects was very defective, resulting in low performance rating on projects.” APC was indeed literally incharge from project conception to execution, thus virtually control of the billions of naira which the late General Sani Abacha government pumped into the PTF. The fund was originally meant to rehabilitate social infrastructure in all the nooks and crannies of the country and as at December 1998, PTF had received N144.51 billion from the federal government.
As a confirmation that APC was really making payments on behalf of PTF, Newswatch investigation showed that in 1995, PTF lodged N1 billion in Commercial Bank Credit Lynonais, Elephant House, Marina, branch, Lagos, but it was APC officials who made withdrawals from the account for various payments. By the end of 1997, only N200 million was remaining in the account.
Since Ahmad died, APC has virtually died with him, moreso, since the new Adamu-led committee took away the PTF job from them. When Newswatch visited their Abuja office last week for comments on the allegations against them, the place was virtually empty. No official of the company was ready to speak on anything relating to PTF.
But before he died, Ahmad had admitted Newswatch in an interview published by the magazine in the April 19, 1999 edition, that APC was, indeed, the main force behind PTF operations. In fact, he said it was APC, which wrote the proposal that defined the mandate of PTF. Said he: “By that definition, we were now able to postulate or interpolate and be able to identify the assignment of the PTF, the resources, both human and material that would enable them implement their own projects successfully and effectively.” “We came out with an indication of what we think their institutional structure should look like and proposed some operational policies and guidelines which would enable them effectively implement their own projects to the end.”
The APC chief stated in the interview that in the implementation strategy, his company also conceptualised the engineering project cycle adopted by PTF. He said it was APC that also suggested the criteria and procedure for the selection and appointment of PTF consultants, contractors and suppliers. He said APC, equally conceptualised the monitoring mechanism adopted by PTF for its projects.
Some analysts believe that Buhari was not effective enough in running the affairs of PTF, especially judging from the fact that he ceded much of his executive powers to a private company which decided the fate of the organisation and the fate of Nigerians at that time. Adamu told Newswatch that it might have been Buhari’s own style of management, but it may not be acceptable to some management experts.
As a result of Buhari’s alleged poor handling of PTF projects and finances, some PTF officials believe that the N135 billion that was disbursed out of the PTF’s total income of N146 billion was squandered. “It is unfortunate that such a colossal sum of money was squandered. It wasn’t used properly,” the source told Newswatch.
But Buhari and his team have tried to explain how they spent the N135 billion. In the PTF 1998 Annual Report and Accounts, they stated that N60,029,375,000 (N60.03 billion) was spent on the rehabilitation of 13,500 kilometre roads under the national highway and urban roads rehabilitation programme. Buhari said the programme was able to attain 80 percent completion by December 1998.
The health sector, he said, gulped N17,433,879,000 (N17.43 billion). This involved the drug revolving scheme, the screening and diagnostic kits for HIV/AIDS control, the research for the development. Of Niprison, a drug for the treatment of sickle cell anaemia as well as the rehabilitation of several health institutions across the country. But Adamu told Newswatch that most of the drugs supplied to PTF expired because they had very short shelf life. He was particularly unhappy with the HIV/AIDS kits on which, N28 billion was spent. He said his committee had visited Israel to discuss with the manufacturers on how to solve the problem.
Last July, a media-based HIV/AIDS group, Journalists Against AIDS, JAAIDS, raised the alarm that the purchase of the kits was a “colossal waste” and “a scandalous squandering of scarce resources that would otherwise have benefited 4.5 million Nigerians living with HIV/AIDS.”
In a statement signed by Omololu Falabi, the project co-ordinator, JAAIDS, said: “Our discovery is that not only is the amount claimed to have been spent on the kits in excess of the requirement of all hospitals and medical institutions in Nigeria, the shocking fact is that more than half of the kits expired in June this year (1999) while the rest will expire by the end of August.”
The Nigerian Guild of Medical Directors, NGMD, had also said that fake and expired drugs were supplied to PTF. Rowland Ogbonna, secretary of NGMD, in September last year called on the federal government to withdraw all drugs supplied by the PTF from hospitals in the country. Briefing the press on Saturday, September 11, 1999, he said: “Unless the federal government immediately withdraws all the PTF supplied drugs, and do a reappraisal of their relevance, Nigerians are at a high risk of consuming expired and fake drugs.
Ogbonna further stated that “PTF deliberately sidelined qualified pharmacists on its committee for the importation of drugs and went ahead to hand over same drugs to businessmen and contractors who have been selling them without expert advice.” In Kogi State, Governor Abubakar Audu, said most of the drugs supplied to his state by PTF were expired. He has set up a panel to investigate the scandal.
But on Wednesday, February 16, a body known as the PTF Consultants and Contractors Forum submitted a memorandum to Chuba Okadigbo, senate president denying the involvement in the purchase of the expired drugs denying the involvement in the purchase of the expired drugs. In the
12-page document signed by Ibrahim Mahmood and Femi Aluko as co-chairmen, the body insisted that its members never supplied any expired drugs or equipment to PTF. “The fact of the matter is that no drugs or seeds were ever accepted for payment without a quality control certification from NAFDAC and the National Seeds Service which are the federal government agencies that have the statutory resposibility to certify locally manufactured and imported drugs and seeds respectively”, it said.
The forum argued that if any of the drugs or seeds had expired, it was due to the inaction of the Adamu-led IMC in directing the distribution of the items. Mahmood told Newswatch in Kaduna last week that the IMC was only giving a bad name to their members so as not to pay them their legitimate claims.
According to the PTF 1998 Annual Report and Accounts, five other sectors that combined to eat up huge sums of PTF money are education, water supply, food supply, security, the federal capital territory, FCT, and “other projects.” Education gulped N6,829,614,000 (N6.8 billion), water supply took N9,053,774,000 (N9.1 billion), food supply got N7,590,629,000 (N7.6 billion), security consumed N27,284,000,000 N27.29 billion) while FCT got N2,043,278,000 (N2.1 billion). The report
said disbursements made in the security sector and the FCT were direct transfers to the task force on armed forces and police PTF and the FCT respectively.
In the “other projects” sector, one of the projects that is causing worries among IMC-PTF members is the Abbajaye housing estate taken over by Buhari. It has 32 housing units made up of eight units for grade level 15 officers; eight units for level 13-14 officers and 16 units for grade level 10-12 officers. As at December 1998, Buhari had paid the total sum of N479,.325,398.00 on the project which is earmarked to cost about N800 million on completion.
Two things are bothering the IMC-PTF on the housing estate issue. Firstly, the cost is said to be too high. The new consultants commissioned to assess the project said it cannot cost more than N400 to N500 million, said Adamu. Secondly, the estate was originally being developed by Alhaji Abba Jaye and Sons Limited, a private developer. At a point, PTF took it over, demolished the man’s own structures and started afresh to put up very beautiful buildings on the land. PTF agreed to pay N4.5 million per annum to the man but after 12 years, the estate would revert back to Abba Jaye, the original owner.
Adamu told Newswatch that he found such an agreement quite unwholesome. He prefers paying the owner his due compensation while PTF takes overthe estate completely. He has succeeded in getting the authorities to revoke the ownership of the land in favour of PTF.
Another controversial project is the extension to the PTF headquarters in Abuja whose contract value is said to be N650 million. Adamu said their technical audit shows that the building would cost between N300 and N400 million.
Even in the food supply sector, Adamu said the farm power machinery rehabilitation programme in which Buhari claimed to have repaired 786 tractors, 29 heavy-duty equipment and 2,744 units of implements was badly managed. According to him, most of the commissioners of agriculture in different states of the federation complained that the programme only provided an opportunity for some people to loot the PTF money. The farm equipment was hardly repaired.
Another allegation being levelled against Buhari is that he marginalised some states heavily in the sharing of PTF projects. The situations in Imo and Bayelsa states were said to have shocked the project verification teams. Buhari was said to have concentrated most of the heavy projects in Kaduna, Katsina, Kano, Niger, Edo and Adamawa states. Adamu told Newswatch that his committee had noticed the gross imbalances in the way the PTF projects were shared but regretted that it cannot do much now to redress the situation because the committee does not have the mandate to start new projects.
Newswatch made efforts in the last two weeks to speak with Buhari on the many allegations levelled against him. When our reporter met him in Kaduna, he declined to comment on the allegations, saying he had spoken on them sometime ago in Sokoto but his comments were grossly twisted by the press.
Last week, Newswatch also faxed a letter to him detailing all the allegations against him. “We have been trying since last week to get you to respond to the allegations. Because we would not like to publish a one-sided story, we shall be pleased if you could respond to the allegations and fax same to us on or before 6 p.m. tomorrow, February 29, 2000,” the letter stated. But upto the time we went to press last week, Buhari did not respond to the allegations. But in a recent interview in TheWeek magazine, Buhari had insisted that allegations of corruption against him were false. “My integrity is intact,” he said and challenged anybody who can prove that he was corrupt as PTF executive chairman to take the matter to either the Christopher Kolade panel on review of contracts or soon to be established panel on corruption. In another interview, he contended that the press had not appreciated the magnitude of what he did for Nigerians in PTF.
Some of his associates told Newswatch in Kaduna that Adamu was only being vindictive because he was one of the persons detained by Buhari in 1994 when he (Buhari) was head of state. Adamu denied this charge in an interview with Newswatch, contending that he and Buhari are friends. Adamu insisted that he was not probing Buhari’s tenure at PTF. According to him, the IMC is only carrying out the terms of reference given to it by President Obasanjo. The seven-point terms of reference are: to ascertain all monies accruing and received by PTF from the inception of the fund to date; to ascertain the state of all bank accounts operated by PTF for the whole of the period of its existence to date; to produce an up-to-date comprehensive projects and programmes report including location, coverage and whether performed, performing or abandoned; and to produce a final report of assets and liabilities as well as to examine the administrative structure and the cost
effectiveness of PTF projects and services.
Other items on the terms of reference include the review all contracts and agreements entered into by PTF; and re-negotiation of cost of projects/programmes and services to reflect current financial realities of PTF. The seventh item states that “no new projects should be undertaken during the committee’s tenure except under the directive of the president.””Adamu told Newswatch that after their preliminary investigations, they will pass on their report and recommendations to president Obasanjo who will institute a debt recovery panel to recover all excess monies paid to the PTF contractors and consultants under Buhari.
But Adamu and his IMC are now being accused of corruption. Each member of the committee has received a furniture allowance of N5 million. Some PTF officials are also being accused of extorting money from contractors, and consultants before they are paid their claims. Mahmood told Newswatch that only persons who are able to pay the bribes are paid their claims.
Adamu told Newswatch that the N5 million allowance was to make the members comfortable and prevent them from being corrupted by contractors whose contracts and projects are being reviewed. He said the allowance is not too much for a committee handling an investment of N250 billion. He also challenged the contractors to name any of his officials who are extorting money from them so that he can discipline such an official. He, says that such claims by contractors amount to pure blackmail meant discredit or distract his committee from the job it has been asked to do in PTF. The last, it appears has not been heard about the PTF controversy.
(Additional reports by Ibrahim Modibbo, Tunde, Abuja and Janet Mba-Afolabi)