April 19, 2021
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Senate queries FMBN over alleged payment of N14bn for unexecuted project

Posted by News Express | 19 April 2021 | 120 times

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• Senator Mathew Urhoghide

By DEJI ELUMOYE and UDORA ORIZU, Abuja

The Senate Committee on Public Accounts has queried the Federal Mortgage Bank of Nigeria (FMBN) over alleged payment of N14 billion to a contractor who failed to construct the expected 963 housing units at Legacy Estate in Abuja.

The Committee chaired by Senator Mathew Urhoghide based the query on the 2018 Auditor General of the Federation (AuGF) report which is being considered by the lawmakers.
The Auditor General had in its report stated that contract price for setting up Legacy Estate was awarded at N10 billion, however a total of N14.2 billion was disbursed to the contractor between 22nd November 2012 and 29th April 2013, thereby resulting in an overpayment of N4.2 billion.

The report said, “Audit observed that the Bank awarded a contract for the construction of 963 units of residential building called Legacy Estate, with all the facilities and services of a modern urban setting at a contract price of N10,000,000,000.00. However, a total of N 14,281,749,370.71 was disbursed to the contractor between 22nd November 2012 and 29th April 2013, thereby resulting in an overpayment of N 4,281,749,370.71.

“No reason was provided for the additional payment; neither was any evidence of contract variation presented for audit. Audit further observed, from physical inspection of the site on 7th July 2017, that the project had been abandoned since 2014, some months after payments were made, with less than 10% of work done. Yet the bank did not only pay the full contract sum, the contractor was overpaid to the tune of N 4,281,749,370.71, without any justification for the over-payment.”

The Managing Director of FMBN, Ahmed Musa Dangiwa, in his written response explained that the contract was conceptualized in 2012 by previous and present management, in its efforts to recover the Bank’s asset expended on the project, engaged all stakeholders.

He said the investigation report was later sent to Minister for Works, Power and Housing, as well as the board who later directed us to send to DSS, EFCC, ICPC and SPIP.
According to him, ”While the Economic and Financial Crimes Commission and Independent Corrupt Practices and other Related Offences Commission (ICPC) were to assist in investigating into the loss of funds on the Good luck Jonathan Legacy Estate Project to enable bank recover its money, the then, Special Presidential Investigation Panel for Recovery of Public Property (SPIP) was also to investigate and recover sum of N11 billion from Messr. Good Earth Power Nigeria Limited (the developer).

“Nord Consult was engaged to file an action for the recovery of the funds guarantee by GT bank on the Advance payment Guarantee it issued, for which the bank appointed Intel Cost Associate Limited to carry out the current valuation of the project in order to serve as expert witness in the suit filed against GT Bank.
“This Management also initiated a valuation of the development on site to be carried out by external consultant and the total work done on the site, comprising housing units and infrastructure work was valued at N940 million.” (THISDAY)

Source: News Express


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