PRESS RELEASE

OCTOBER 04, 2006

RE: PRICE VARIANCES
IN AWARD OF GOVERNMENT CONTRACTS
IN
ENUGU STATE

Office of the Special Adviser to Governor Chimaroke Nnamani of Enugu State, on Project Development and Implementation, PDI, raises pertinent, professionally valid and logically profound questions on the report of the Economic and Financial Crimes Commission, EFCC, on Enugu State.

It is very important that we point out the so many discrepancies in the report under review and which we doubt had the full application of standards and control of solid professionals:

1. On the engagement of “versatile Professional Engineers”, one might wish to know the background of the Engineers? As Professional Engineers, do they have cognate training and experience in construction cost consultancy? One wonders how these “versatile professional engineers” could come to such conclusion as they reached in a whistle-stop three day visit.

How, therefore, were their services engaged to review pricing of the whole building and road projects whose pre-contract documentation took over one year to accomplish by various professional consultants and whose cost variables they were not part of, as they were not part of the gathering and computation of the data applied in the analysis.

2. They equally claimed that most of these projects were already completed or at various stages of completion, yet it took them just three working days – the whistle-stop practice never accepted in scientific researches – to visit project locations and verify the contract documents. Government and people of Enugu State are known to be extremely hospitable and we are sure they would have provided these “versatile professional engineers” much place, space and comfort, even if they needed one month or more, provided that the needed details and credibility of the investigation were achieved.

3. On the “expert” comparison of projects valuations, one might want to know the yardsticks employed, since the same contractors are also engaged in executing Building and Road projects for other state governments as well as Federal Government and its agencies. Yet these project rates, when compared with similar projects in other States, as well as Federal Government projects, were not higher in any form.

4. On the reported findings, the “versatile professional engineers” could not hide their inadequacy on cost matters, when,
(a) words such as huge variations were adopted to paint a picture of connivance between the client and the contractors in executing these projects. They failed to explain in explicit terms,
(i) what is variation? or (ii) what leads to variation in construction projects? (iii) whether there are limitations in contractual law to variations.
(b) At the commencement of the various projects whose stages of completion vary, what were the schedules of basic rates of the construction materials in 2002, compared to August 2006?
(c) Also in arriving at overpricing of these projects the “versatile professionals” failed to find out the roles of the contracting companies in pre-and-post-contract stages, say for instance Geodetic/Mapping Surveys, soil investigations/analysis, design and documentations in relations to rates used.
(d) While the findings were keener in letting their tax-payers know the sums involved in over-valuations they also acknowledged that some of the road projects were undervalued, yet the sum net valuation cannot be determined using the same parameter adopted in arriving at over-valuation of projects.

5. On lack of co-operation from the Commissioner and staff of the Ministry of Works, it is obvious the “experts” lacked what to report because the inspections were jointly carried out, as the contractors were represented along side the clients representatives and all the documents tendered by the contracting firms were the same documents issued by the Ministry of Works or its Consultants on the projects; which in any case applied in all the projects.

6. The question is, were there prior notification for such exercise either through the Commissioner for Works or the contracting companies before the visiting team came calling?

7. It still remains a wonder to us that the same Commission which expressed satisfaction and commended the activities of the contracting companies, still considered it proper and in fashion, to freeze the contractor's project accounts since June 2006, without minding if the jobs are frustrated or not. It is more curious that working with “versatile professional engineers” as the Commission did, it ignored the implication in a contractor leaving site and mobilising again, which every experienced builder knows can be very, very, disruptive in cost, execution and eventual delivery.

8. The Commission commended the scope and quality of projects executed and we are confident to state that when their final contract sums are computed and is put side-by-side with such other projects elsewhere in Nigeria, it will become obvious that the client employed the highest level of Prudent Management in accomplishing these projects - the results being the spate of commissioning - which have taken place so far.

Engineer Luke Mammel
Special Adviser to His Excellency,
Project Development and Implementation