$9bn Power Project Scam: CEHEJ Petitions EFCC, Wants GE, Rockson Engineering Indicted

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Centre for Health Equity and Justice (CEHEJ) has petitioned the Economic and Financial Crimes Commission (EFCC), asking the commission to investigate the role played by General Electric (GE) in the $9billion power project scandal, with a view to recovering any stolen public funds so that they are used to provide public goods and services to Nigerians.

CEHEJ’s letter followed the reported summon by the EFCC of the Chairman of Rockson Engineering Company Limited, Mr. Joseph Arumemi Ikhide, whose company got about $2billion of the votes for the power project with only about 40per cent job done. CEHEJ believes that General Electric (GE) as the leader of the consortium which includes Rockson Engineering should also be invited and investigated.

CEHEJ said that “as a matter of fact, it was GE that introduced Rockson Engineering and assured the Federal Government in the contract for the Kaduna Power Plant Project (KPP) of utilizing its position as the leader of the consortium to ensure that the KPP is executed to international standards both in terms of time, quality and output.”

In the letter dated 5th November, 2019, the organization said: “GE appears to be hiding behind Rockson to disappoint the legitimate expectations of Nigerians. It remains inexplicable that a 36-month project has lingered to date (about 10 years) and, most astonishing is the facts that GE has since received its full payments on the contract.”

CEHEJ therefore wants the EFCC to also go after GE as the leader of the consortium.
The letter reminded the Commission of CEHEJ’s latest research report by a team of energy researchers led by Dr Yemi Oke of the University of Lagos titled “Kept in Darkness”—Holding Non-Performing Electricity Contractors Accountable” which indicted some contractors notably Rockson Engineering and General Electric (GE) and detailed some of their atrocities in Nigeria. Copies of the report had earlier been forwarded to the Commission.

CEHEJ also sought investigations and sanctions “of government officers that approved the shipment of un-tested GE units and released the payment for the non-working equipment which has inflicted losses and damage to the Nigerian economy especially for the overpriced General Electric (GE) Gas Turbines”

The letter further reads: “As structured, CEHEJ is of the view that the contract was designed to fail from the beginning as the Government of Nigeria is inhibited from exercising statutory rights as project owner despite huge significance or potentials of this project to the Nigerian economy.

“CEHEJ is curious 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 the Government of 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 dis-used pieces of equipment.

“Much more confounding, CEHEJ observes 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 penalized.

“It is assumed, based on findings made by the research team led by Dr Yemi Oke of the University of Lagos 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 the project by the Nigerian government.

“CEHEJ further observes that pricing of the Kaduna Power Plant contract was curious, bloated and expensive for Nigerian taxpayers and Government. Our findings further revealed that even though GE (leader of the consortium) brought Rockson on board as a local partner for the project, the FMOP still had to pay GE exchange rate differentials due to delay caused by the Contractor (GE/Rockson), totaling about 3 Billion Naira based on exchange rate differentials alone

“CEHEJ also encountered a mysterious turn of events between the tender submitted by the GE/Rockson consortium and the contract signed by the duo as Contractor with the Federal Ministry of Power as customer. CEHEJ observed an unexplained reduction and shrinking of the scope of supply in the contract after the tender had been approved and awarded. This singular act appeared to have resulted in the loss of almost USD $11 million by the Nigerian Government. More worrisome is our observation that the reduction in the scope occurred without any due process as the Bureau of Public Procurement was not carried along.”

CEHEJ found that each average engineer of GE on the KPP site gulps from the Nigerian Government purse a daily sum of USD1,600 which is about N500,000.00 (Five Hundred Thousand Naira) per day. This daily payment is way higher than the monthly salary of a permanent secretary in the Government Ministries.

CEHEJ also said that “unexplainable absurdities characterize the project, ranging from dissipation of public funds, lack of accountability of public officers, lack of integrity dereliction of statutory duties, unlawful and unjust enrichment of contractors by the Federal Government despite failure of contractual obligations, and without demanding accountability on the part of such contractors, among others”

In fact, the rumor is in the market that GE is in a discussion to sign a big contract with NLNG which is a shame because of the loss and damage GE had purportedly caused to the Nigerian economy. CEHEJ therefore recommends to EFCC that GE should be blacklisted from any new contract in the meantime until the Kaduna Power Plant issue is solved and the plant operational in the shortest time possible. As the leader of the consortium, it is GE’s responsibility and obligation to have the plant running immediately and keep Nigeria out of darkness especially with the plant now 10 years late.

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