Senate Indicts Ogun-Osun River Basin For N726 Million Contract Scandal

The Senate has indicted the Ogun -Osun River Basin Development Authority for contracts scandal of N726 million, just as the apex legislative Chamber ordered the affected contractors to refund the Federal Government.

The indictment of the agency followed the investigation carried out by the Senate Public Accounts Committee (SPAC), chaired by Senator Mathew Uhroghide, which submitted the report to Senate for consideration.

The Senate Panel investigation was hinged on the 2016 Auditor-General report, presented to the National Assembly for consideration.

The Senate at the plenary session upheld the recommendations of the Committee, which indicted the River Basin Development Authority.

Party of the query reads: “Audit observed that an overpayment was made to the contractor for the Construction of Water Supply at Agbado-Isoye to the tune of N110,933,994.56.

It was revealed from the contract documents, status report and payment details that the contractor was paid the sum of N404,798,880.80 being 71.63% of the contract sum, whereas only 52% of work valued at N293,864,886.24 was actually done.

“The sum of N293,128,935.33 was the contract sum for the construction of Small Earth Dam at Ilobi-Irinja in Egbado-South LGA, Ogun State. However, the contractor was paid a mobilization fee of N43,969,340.30 without mobilizing to site.

“Audit observed that mobilization fee of 75% instead of 15% was paid to the contractor in respect of the contract of N95,795,442.23 for the construction of 5 No. 2.5HA Centre-pivot scheme at Igan/Igua, Yewa North LGA, Ogun State. Also, contingency and other provisions of N10,844,464.50 in the BOQ and non-provision of some items listed amounted to N5,650,000.00.

“There were un-priced provisions in the Bill amounting to N12,000,000.00 for which there was no evidence of approval for expenditure and the sum of N19,138,151.50 spent as contingency was without evidence. In addition, out of 2,750m HDPE pipes for installation only 2,000m were installed leaving a balance of 750m valued at N13,125,000.00.

“Audit revealed that the Authority paid the sum of N158,824,417.90 representing 30.5% of the contract sum to a contractor instead of N100,089,674.28 (19.21%) for an abandoned project.

“The authority paid the sum of N567,489,429.71 for a contract that was 98% completed and valued at N527,644,400.00 resulting in overpayment of N29,076,776.65 to the contractor.

“Payments totalling N39,590,000.00 were made for some provisions in the Bill without evidence of work done. There was also no evidence on the expenditure of N5,250,000.00 for project management, capacity building etc:

“The Authority responded that all expenditures made were in tandem with the Bill of Engineering Measurements and Evaluation (BEME).

“Audit observed that the Authority spent the sums of N2,000,000.00 for supervision works; N3,500,000.00 for project management and monitoring and N11,053,467.05 for contingency without evidence of expenditure. There was also no approval for variation.

“Audit observed that the construction of Panseke-Onikolobo water supply scheme in Abeokuta South L.G.A., Ogun State valued at N383,431,551.30 was abandoned despite paying the contractor the sum of N204,218,654.94. The sums of N10,000,000.00 and N13,000,000.00 were for Engineers supervision fees and project management, while payment of N10,000,000 for capacity building was made without evidence of actual execution.

“Audit observed that a total of N307,648,181.50 was paid to the contractor who abandoned the project while most of the works certified to have been done were not executed, an indication that the financial commitment far outweighs actual work done.”

However, the agency was unable to defend the allegation neither presented relevant documents to counter the issues raised by the Auditor-General in its report.