Chairman, House of Representatives’ Committee on Treaties, Protocols and Agreements, Hon. Ossai Nicholas Ossai on Tuesday disclosed that the ongoing investigative hearing into all the bilateral, commercial and multilateral agreements signed by Nigeria which led to the unearthing of the $33 billion Chinese loans obtained by Federal Ministry of Transportation for the implementation of railway projects at various times, was in tandem with the resolutions passed by the House.
In a statement titled: ‘Reps Panel Member Faults Chinese Loan Probe: A Rejoinder,’ issued by his Communication Team and obtained by Tribune Online, Hon. Ossai disclosed the Committee acted in line with the provisions of Sections 62(1) and 12 of the 1999 Constitution (as amended), with powers as prescribed in sections 88 and 89 of the constitution, guided by the mandate/jurisdiction as provided in the Standing Order of the House of Representatives especially Order 18(B), Rule 93.
The lawmaker who frowned at the report credited to the Chairman, House Committee on Public Accounts, Hon. Wole Oke who alleged that Hon. Ossai’s committee ‘was functioning outside of its mandate’, argued that the Committee acted in line with the House Resolution No (87/09/2019) vide a Motion on ‘Transmission of all Treaties and Bilateral/Contractual Agreements by all Federal Ministries, Departments and Agencies (MDAs) to the National Assembly’; as well as House Resolution No. (HR. 144/05/2020) on the Motion for a ‘Need to review and renegotiate existing China/Nigeria Loan Agreements’, wherein the House resolved to: mandate the Committee to examine all extant China/Nigeria loan agreements since 2000 with a view to ascertaining their viability, regularising and renegotiating them; and mandate the Committees on Treaties, Protocols and Agreements, to liaise with the Ministry of Finance, and the Debt Management Office to seek for the review or outright cancellation of the latest China loans to Nigeria, on the principle of force majeure in the light of the COVID-19.
Hon. Ossai maintained that the “Committees cannot effectively carry out the enormous responsibilities of reviewing the agreements with a view to ascertain their viability, regularisation, domestication and possible renegotiation without reviewing the commercial contracts agreements upon which the facilities were secured.
“The Committee’s engagement with Ministries of Finance, Debt Management Office (DMO) and Office of the Attorney General of the Federation revealed that not only are the invited Ministers the custodians of the Commercial Contracts and key parties to the negotiations; they were also the end-users of the facilities for projects domiciled in their various Ministries.
“They were also charged with the responsibilities of instructing the Ministry of Finance when to issue irrevocable notices of drawdown on the loan facilities in line with levels of work executed by the contractors as provided for in the agreements including the counterpart funding components of the Agreements.
“Therefore, the Committee rightly invited the Ministers to provide relevant documents relating to the projects financed by these agreements in order to accurately ascertain their viability, review the provisions of the agreements to ensure compliance to local content laws.
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“And also compare clauses in the bilateral (International) and the commercial contracts agreements, examine the structure and current status of the bilateral agreements in order to ensure value for money in the light of the COVID-19 pandemic and make necessary recommendations to the House at plenary.
“It is therefore self-serving and unparliamentary for an Honourable Member of a ranking status to go to the media and attempt to discredit the constitutional legislative oversight duties of an agent of the first arm of government or strangely barge into the Committee Public Hearing to seek the privilege to provide direction on procedure when the substantive chair is sitting and presiding. These actions are strange to legislative practices, procedure and conventions.
“The Committee on Treaties, Protocols and Agreements have successfully carried out three major productive public hearing since the inception of the 9th National Assembly under the leadership of the Speaker – Rt. Hon. Femi Gbajabiamila with grace and national interest.
“We are proud of the accomplishments we have recorded so far including but not limited to ensuring that Nigeria now has National Depository of Treaties, Protocols and Agreements under the Office of the Attorney General of the Federation and Minister of Justice amongst many other achievements. We thank the Rt. Honourable Speaker for his support and solidarity.
“Hon. Dr Ossai Nicholas Ossai, Chairman, House Committee on Treaties, Protocols and Agreements is well-respected ranking legislator whose legislative grit and wit has helped to shape some of the big moments of the National Assembly especially the House of Representatives.
“He will, therefore, not give in to intimidation or harassment in any shape or form. Hon. Dr Ossai Ossai remains committed to discharging the constitutional responsibilities of his office with utmost good faith in the interest of the Nigerian people and his constituents.
“The Honourable Chairman is humbled by the torrents of solidarity and prayers of many of his colleagues, the Nigerian people and heartily pleads with those who are politicising the Committee’s work to hold their peace in the spirit of national interest and national security. The territorial integrity of the Nigerian Republic must be protected and the future of our unborn children must be secured for posterity,” the statement read.
Details of the $33 billion contract agreements signed by Federal Ministry of Transport under successive administrations showed that: Nigerian Railway Modernization Project (Idu-Kaduna Section) loan worth $849,750,903 and $500 million were signed on 20/12/2010; Nigerian Railway Modernization Project Phase II (Lagos -Ibadan Section) worth $1,581,847,371 and $1,267,317,586.10 were signed on 18/08/2017; Nigerian Four Airport Terminal Expansion Ancillary Project worth $183.62 Million was signed on the 27/12/2019; Nigerian Four Airport Terminal Expansion Incremental Project worth $208.90 Million was signed on the 27/12/2019 while Nigerian Railway Modernization Project (Lagos to Kano) worth $5.3 billion is still in the process.
In addition, a commercial contract worth over $1.5 billion for the Lagos – Ibadan section of the Railway projects was signed on the 18th August 2017, out of which a loan of $1.267 billion for the project was secured from China.
The Ministry allegedly carried out major variations on the existing contracts of the Lagos-Ibadan rail projects that attracted additional costs of $94 million, $374,204,953 and $282,607,262.35 respectively, on the 23rd December 2019, excluding the original contract sum of over $1.5 billion, which when added will amount to over $2 billion for just Lagos-Ibadan alone.
On the 31st August 2016, the Ministry allegedly signed a fresh commercial contract with a Chinese company for railway projects for (Kaduna-Kano Section) to the tune of $1.685 billion.
The document also showed that the Ministry allegedly carried out another variation on the contract on the 26th February 2020, which were segmented into two sections and re-scoped the work.
The contract price for the first section (Kaduna (Rigasa, Rigasa Station not included) to Kaduna (Zaria, Zaria Station included) is $485,694,658.46.
The second section (Kaduna (Zaria) to Kano segment) was awarded at the cost of $736,021,997.36. It must be noted that some key sections of the projects such as some of the stations were excluded from these arrangements possibly to be re-awarded at a different time in the future.
On the 15th May 2018, the Ministry allegedly signed new commercial contract agreements with the Chinese to the tune of a staggering sum of $6,681,452,757 to construct Ibadan to Kaduna (section with double track) and with a branch line from Osogbo to Ado-Ekiti (single track).
On the 26th February 2020, the Ministry allegedly effected a major variation by introducing a revised section, to construct Ibadan to Minna section (single track) of 460km awarded to the Chinese at a contract price of $3,311,747,998.44; as well as a fresh contract for the construction of 127km Minna to Abuja section (single track) at a contract price of $999,824,656.22.
Also on the 22nd December 2016, the Ministry allegedly revised the early agreement of 16th December 2013 by the previous administration to design, supply, installation and commissioning of a complete integrated system of signalling and telecommunications equipment for the Itakpe-Ajaokuta-Warri standard gauge railway line in Kogi and Delta States at the cost of N10,930,406,536 citing impediments on payment clauses as the reason for the decision.
According to the documents, in the revised contract agreement of 2016 signed by the Minister, the payments and inspection conditions were allegedly changed to favour the Chinese companies and at the higher exchange rate in dollars without any mention of the future value of the 15% advance payment made to the ZTE consortium of China since 2013 by the previous government.
On the 14th November 2014, the Ministry of Transportation under the previous administration signed a contract for the Nigeria Coastal Railway Project with CCECC of China at a contract price of $11,974,769,721.74 covering Lagos – Shagamu – Ijebu Ode – Ore – Benin City – Sapele – Warri – Yenagoa (with siding to Otuoke) – Port Harcourt – Aba – Uyo – Calabar with a branch line from Benin City – Abudu – Agbor – Uko -Ogwashi Uku – Asaba – Onitsha (with Onitsha railway bridge). The total track length was 1402km, among which, Lagos – Benin City -Onitsha section (with Onitsha railway bridge) (450.5km) shall be double track with a track length of 901km, and Benin City -Calabar section (501km) shall be single track with a track length of 501km.
On the 1st July 2016, the Ministry allegedly revised the Nigeria Coastal Railway Project and signed a new contract citing a special directive from President Buhari and need for price adjustment due to global economic meltdown.
The new agreement divided the projects into six sections of Lagos- Benin City, Benin City – Warri, Warri – Yenagoa, Yenagoa – Port Harcourt; Port Harcourt – Calabar and Benin – Onitsha (including the River Niger Bridge). Consequently, a new contract price of $11,174,756,680.35 was reached according to the commercial contract agreements.
The Ministry on 31st August 2016, allegedly signed a section based contract to implement the Coastal Railway Projects from Calabar to Port-Harcourt designated as section 1 at the cost of $3,427,741,498.12. Four years after he signed the contract, the project is yet to commence.
On the 18th December 2017, the Ministry allegedly signed a fresh contract with a Chinese company for the rehabilitation of Itakpe Line to cover Track Laying and Permanent Way works at Railway Ancillary Facilities Area and completion of 12Nos. Railway Stations to the tune of $122,616,588.02.
On the 23rd December 2019, the Ministry allegedly carried out variations on the rehabilitation project with additional works on the Itakpe-Ajaokuta Rail line costing $56,113,674.35, thereby bringing the total rehabilitation work to the tune of $178,730,262.39.
In the same vein, on the 5th of March, 2018, the Ministry allegedly awarded a contract worth $521,492,645.85 barely two years after the official commissioning of the (Idu-Kaduna railway) project for the design, manufacture, supply, installation and commissioning of rolling stocks, the supply of spare parts and maintenance equipment for the Idu-Kaduna Railway project (on-going railway modernisation project).
The Committee during the review of the document queried the fresh $521 million expenditure on what was constructed at a contract price of $849 million and commissioned by President Jonathan in 2015 for which Nigeria took a loan of $500 million from China, and paid a counterpart funding of $349 million to the contractors; a debt of which Nigeria will continue to pay till 2030.
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