BPE, BPP lock horns over N1.45bn PHCN’s liquidation contracts

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The dust generated by the controversial disbursement of N1.45 billion as consultancy fees for the liquidation of the Power Holding Company of Nigeria (PHCN) Plc, has taken another dimension as both the Bureau of Public Enterprises (BPE) and the Bureau of Public Procurement (BPP), are locked in blame game.

The two federal agencies are principal actors in the unbundling process of the defunct PHCN.

Contrary to the spirited denial by the BPE that it followed due process before disbursing N1.45 billion, BPP indeed rejected the award of N929 million contracts to a legal adviser for the winding up of the Power Holding Company of Nigeria (PHCN).

Also, the payment of N500 million to the Office of the Accountant-General of the Federation (OAGF) as consultancy service fee was DG BPP Emeka Ezehnot routed through the BPP, according to some documents sighted by our correspondent in Abuja.

BPE had in a statement on Tuesday admitted payment of the curious sums and claimed that the Office of the Attorney-General of the Federation (AGF) in a September 17, 2014 letter titled: (HAGF/BP/2014/Vol.1, withdrew its objection to the award of the legal advisory services for the winding up of PHCN.Benjamin-Dikki-Director-General-BPE

The BPE also claimed that it obtained a “No Objection” letter from the BPP, but a presidency source told our correspondent that based on the facts available to the government, the BPP did not issue a Certificate of No Objection to BPE for the award of the N929, 613,188.94 for legal service for the winding up of PHCN.

“Under the Public Procurement Act, no contract can be awarded by any MDA (Ministry, Department and Agency) without a Certificate of No Objection from BPP. The BPE has lied. When was the certificate issued and when was the contract awarded and executed before the payment was made?

“In fact, the former vice president in his memo of February 23, 2015 to ex-President Goodluck Jonathan only recommended the award of contract of N517, 694, 100.00 to an Asset Adviser (Ora Egbunike Associates).

“On his part, ex-President Jonathan on April 4, 2015, approved the award of contract to only the Asset Adviser. There is no memo on the legal services and the N500 million consultancy fees,” the source said.

Our correspondent further gathered that the BPP on September 22, 2014, and December 24, 2014, rejected the award of the legal service contract.

The September 22, 2014 memo reads in part: “This is to refer to your letter dated April 4th, 2014. Please find herewith a revised Due Process Review Report No. BPP/DPR/SP/REPROT/2014/012C dated September, 2014 on the above mentioned project.
“The Director-General’s attention is further drawn to Section 12.30 of the revised Review Report for consideration and necessary action.

“In view of the above, Due Process Certificate of ‘No Objection’ cannot be granted to the Bureau of Public Enterprise for the Appointment of Messrs J. K Gadzama & Partners LPP with N929,613,188.94 for legal services and Ora Egbunike & Associates with N517,694,100.00 for asset evaluation.

“However, Due Process Certificate of ‘No Objection’ can be granted to the Bureau of Public Enterprises only for the Appointment of Messrs Ora Egbunike & Associates with N517,694,100.00.

“The Legal Advisory Services for the winding up of PHCN is no longer required based on the advice of the Attorney-General of the Federation and Minister of Justice vides letter reference no. HAGF/BPP/2014/VOL.1 dated 11th September, 2014.”

In another letter on December 24, 2014, the BPP advised the BPE against going ahead with the procurement of the legal service for the winding up of PHCN.

The BPP, in the letter signed by its Director-General, Emeka Ezeh, said no instruction was received from the AGF nullifying the earlier directive.

He said the BPP was “therefore constrained by the directive of the HAGF, hence cannot reverse the earlier verdict.”

“The Bureau of Public Procurement (BPP) having examined the request wishes to draw the attention of the BPE to Paragraph 14 of the Honourable Attorney-General of the Federation (HAGF)’s letter to the BPP referenced that; item 1,3,5,6 and 8 of the scope of work for the Legal Advisor unnecessary for the liquidation of the PHCN.

“Similarly, any of the remaining items 2,4,7 and 9 which are not contemplated by the procedure described in Sections 457 -468 (and there is hardly any contemplated) would equally be unnecessary to accomplish the liquidation”.

“It can be deduced from the above citation that the HAGF’s position on this procurement clearly indicates that legal advisory service is not needed as all constituent items (1-9) under unnecessary as listed by the HAGF constitute all items under the legal advisory service, as such; no item is left for BPP’s consideration for a further review.

“Moreover, I am to reiterate my earlier opinion that the proposed engagement of consultants for provision of legal advisory services for the liquidation of PHCN and valuation of PHCN’s non-core headquarters assets is inconsistent with the provisions and spirit of the EPSR Act and the proposed agreement to this effect should not be executed by the parties”.

The BPP further drew the attention of the BPE to Paragraph 2(v) (i) of the minutes of meeting between the Bureau of Public Procurement (BPP) and the Bureau of Public Enterprise (BPE) on engagement of advisers for the winding up of PHCN, procurement for selection of consultants for training and counselling of old employees of PHCN and extension of CPSC Transcom International Ltd (BPE’S adviser for the privatisation of PHCN successor companies) held on Thursday, September 11, 2014, at the BPP Conference Room, wherein, a conclusion was reached that; the BPP will consider reversing its decision on the procurement under reference only when further instruction from the AGF nullifying the earlier directive is received.

It said that the conclusion reached at the meeting was consented to by both parties (BPP and BPE), and was in line with the AGF’s letter to the Bureau.

The BPP stated that no instruction was received from the AGF nullifying the earlier directive, stating that it was constrained by the directive of the HAGF, hence cannot reverse the earlier verdict.

“In view of the foregoing, “No Objection” cannot be granted to the BPE to carry out renegotiation with Messrs. J-K Gadzama for Legal Advisory Services for the Winding up of PHCN,” it said.

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