Business, Economy

#KachikwuMemo: Fact shows that Buhari approved NNPC contract bypassing  Kachikwu

The claim by the Minister of State for Petroleum Resources, Ibe Kachikwu, that the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, inappropriately awarded contract for the N885 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline project has been proved to be false.

An investigation conducted by PREMIUM TIMES showed that President Muhammadu Buhari approved the contract after Baru initiated an inappropriate award process that sidelined him (Kachikwu) and the NNPC board.

In his controversial August 30, 2017 memo to President Buhari, Kachikwu had, among other allegations, accused Baru of flouting due process in the award of the $2.89 billion (about N885 billion at N306.3 to one U.S dollar) AKK contract.

But in a curious move, Kachikwu, on December 13, presented the same contract to the Federal Executive Council (FEC) seeking approval to award it.

When asked why he sought approval for a contract he accused the NNPC of inappropriately awarding, three months earlier, the minister said his action was meant to correct the irregularity in the initial award process carried out by Baru.

“What I wrote to the President in my memo, which was presented to FEC, was to remind him that these were some of the contracts he had already approved.

“What I complained about (in memo to the President) was about due process not being followed in the initial approvals obtained without seeking my concurrence or input.

“What I did was an inverse approval process, which is post-the fact, by taking the details of the contract tender back to the NNPC Board, briefed its members and obtained their buy-ins.

“The due process is that before contracts go to FEC, they should go first to the Board of the company, in this case NNPC, to give everyone the opportunity to make their inputs.”

It was gathered that the contract was neither awarded by Baru nor was it ever approved by Buhari before that December 13 when the minister presented it before FEC either.

How to award the contract

To award a contract of that magnitude, which is being executed on a build and transfer basis through contractor financing model, the NNPC needed to obtain three key certificates from three separate federal agencies to proceed.

They are Due Process Certificate of “No Objection” from the Bureau of Public Procurement (BPP), a Certificate of Authorisation from the Nigerian Content Development & Monitoring Board (NCDMB) and Outline Business Case (OBC) Compliance Certificate from the Infrastructure Concession Regulatory Commission (ICRC).

It was gathered that the BPP Due Process Certificate and the NCDMB Certificate of Authorisation Kachikwu attached to his memo to FEC were only issued on August 31, 2017 and October 6, 2017 respectively, days after the minister petitioned Buhari. It was only the OBC Compliance Certificate that was issued on July 10, 2017.

Those familiar with contracting procedures in the oil and gas industry said there was no way Baru could have awarded the contract without presenting those three certificates. Yet, the Minister had written to the President, on August 30, accusing the NNPC GMD of wrongdoing.

In its October 9, 2017 response to Kachikwu’s August 30 complaint to Mr. Buhari, the NNPC explained that the AKK Gas Pipeline Contract had not been awarded, because the procurement process had not been completed.

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