April 19, 2010

Knocks, disbelief, anger at N63.5 billion Abuja airport runway investigative hearing

Kenneth Ehigiator
For eight hours last Wednesday, members of the House of Representatives Committee on Aviation grilled those connected with the controversial N63.5 billion contract for construction of a second runway for Nnamdi Azikiwe International Airport, Abuja.

Those who thought the exercise would be a tea party for those under the klieg light were, indeed wrong, as very thought-provoking questions, some bordering on technical issues, were raised by committee members who turned up in large numbers.  It was. indeed, storming.

Chairman of the Committee, Mr. Bethel Amadi, set the ball rolling by assuring respondents that the exercise was not designed to witch-hunt anybody, but find a way round cutting down considerably the cost of building the runway which every participant agreed was desirable.  The presentation of the two main actors in the award of the contract, the Federal Airports Authority of Nigeria (FAAN) and Bureau of Public Procurement (BPP) did give an indication that due process was circumvented in the award of contract, considered by everyone as massive.

Although both parties tried to explain away that the high cost was based the speed needed to deliver the project within a two-year frame, it did not, however, go down well with not just the lawmakers, but several other guests present at the investigative hearing.

Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Richard Aisuebeogun, admitted the fact that his agency lacked the capacity to provide the required design for construction of the runway, explaining that all FAAN did was to give the two main bidders, Julius Berger Plc and PW Nigeria Limited, the design concept of what was required to enable them come up with their designs for the project.

In other words, the would-be contractors were also required to design the runway and just come up with the Bill of Quantities.

According to Aisuebeogun, the cost of FAAN’s concept came down to some N26 billion.  He said this was to serve as a guide to the two bidders that were eventually shortlisted from a list of six that initially were invited to submit bids for the project.

The four others are China Harbour Limited; Impresit Bakolori; Reynolds Construction Company (RCC) and Arab Contractors.  They were said to have opted out for lacking the wherewithal to build the runway because of the scope and short duration of delivery of the project.

Asked why the bidding process was not thrown open to all the construction companies in the country to create a level-playing field for all to participate, the FAAN managing director said restricted tendering process was employed to fast-track the project, citing the urgent need to shut down and rehabilitate the existing runway at the airport, which age he put at about 30 years, and had outlived its life span of 20 years.

Aisuebeogun’s presentation was not helped by his Director of Airport Engineering, Engr. Saleh Dunoma, who stunned the lawmakers with a declaration that his agency did not even visit the project site before coming up with the design concept.

Jolted by knocks from the visibly angry lawmakers about this declaration, Engr. Dunoma recanted, saying they visited the site but didn’t have the tools for specific measurements.  The drilling of the FAAN boss and his director gave an insight into what was to expect as the sitting progressed.  It was obvious from the presentation of the FAAN team that due process was circumvented as, according to the committee, sections 16, 35(1), 37 and 40 of BPP Act 2007 were breached.

Not quite convinced about the explanations offered by FAAN, the committee invited the BPP team to make its own defence, especially as much of the defence put up by the FAAN team revolved around the due process certificate the BPP was said to have given for the job, after Julius Berger Plc had been selected for the job.

Although the Director-General of the BPP, Engr. Emeka Eze, could not attend due to other state matters at the Presidency, arguments over whether he should represented created some heats at the sitting, as some of the lawmakers insisted that the DG must appear in person to defend what they described as obvious breach of the Act which set up the BPP.  It took the committee chairman, Bethel Amadi, to read to the audience an official letter written by Engr. Eze explaining that he could not attend the sitting as he already was invited to make presentations to newly sworn-in ministers before the committee’s invitation got to him.  What the opposing lawmakers wanted to avoid was a situation where the DG’s representative would dodge questions in the guise of not being armed with all the replies to questions and issues around the project.

After the frenzy created by this had simmered, a director in the agency, Engr. Nebolisa Emordi, was allowed to represent his boss.

One major question fired at the agency was where FAAN expected to get the 15% mobilisation fee which the BPP Act stipulates should be paid to any contractor handling projects for the federal government, and this amounted to N9 billion, against the N4 billion provided for in the 2009 budget.

Engr. Emordi explained that the airports authority had Aviation Ministry’s approval to access the $65 million Bilateral Air Services Agreement (BASA) fund for the project, which brought the initial available funds for the project to about N13 billion.  He also explained that the balance of the money for the project was to be appropriated for in 2010, 2011, 2012 and 2013 budgets.

Again, the committee was quick to remind the BPP that the BASA funds FAAN was relying on was not appropriate for by the National Assembly and could not, therefore, be spent on any project.  The committee said spending money not appropriated for was tantamount to an illegality which the National Assembly would not allow to hold.

On why the bidding process was not opened to all as specified in BPP Act, Emordi said it was the Federal Ministry of Aviation that requested for restricted tendering to save time.

The agency was reproached for allowing itself to be arm-twisted into what was illegal and against the law setting it up. Emordi was not allowed to exit the hot seat until he gave a commitment on possible reduction of the contract sum, having violated the law to award the contract to Julius Berger Plc.  “ The BPP can withdraw its due process certificate given to Julius Berger Plc, having been confronted with superior arguments.  There have been instances where the BPP withdrew certificates for contracts already awarded when we were confronted by superior positions,” he assured.  He, however, said the restricted tendering process was applicable in award of special projects as Abuja airport runway.
In fact, it was this assurance given by the BPP of a possible project cost reduction that somewhat prompted Julius Berger’s statement that the cost could come down further by the time the design of the runway was completed by year’s end.

The company’s Managing Director, Engr. G. Goetsch, had told the committee that the shortness of time for completion of the project accounted for the high cost of N63.5 billion.  He said the company had to engage three oversea-based consultants to assist it with the design because of time constraints, adding that were there to be more time, the company would handle that aspect of the job.

He confirmed BPP’s position that the cost could come down when the project design was fully completed.  “The more detailed the design is, the less the cost.” he said.  Goetsch argued that the cost was high also because the runway would come with four taxi ways, 1km stretch between existing and proposed runway as well as airfield lighting.

Appearing before the committee, immediate past Aviation Minister, under whose tenure the contract was awarded, Mr. Babatunde Omotoba, said his ministry adopted the selective tendering system because government didn’t want to repeat the mistake made in the rehabilitation of Port Harcourt International Airport runway and wanted to avoid waiting for a whole year for just design of the runway project for Abuja airport.

He also explained that he was alarmed by the initial figure of N83 billion tender submitted by Julius Berger Plc, adding that the questions he raised about the high figure accounted for why it was reviewed to N72 billion and finally to N63.5 billion.

Although he tried to defend government’s adoption of the concept of Engineering Procurement and Construction (EPC) system in construction of the runway, the committee disagreed with him, arguing that the EPC system was good only when there was money already available for a project.  The committee argued further that the EPC system was not suitable in the case of the runway project which money had not been appropriated for by the National Assembly.

Asked to justify to N63.5 billion cost of the project when a similar facility had been built by Akwa Ibom State government for N45 billion, Omotoba said both runways were not the same, saying that of Akwa Ibom had no taxiways and Ikm road that would connect the existing Abuja airport runway to the proposed one.  He also dismissed allegations that he refused to honour five letters inviting him to the House to explain issues around the project because he didn’t want the runway built in Abuja.  “Hat allegation is not true.  How can I not want the runway built in Abuja?  I want the runway built in Abuja,” the former minister told the committee.

On why he refused to honour the invitations extended him to appear before the House to explain issues concerning the runway, Omotoba claimed he didn’t have much of the information he was overwhelmed with at the investigative hearing and had not much of information to give the lawmakers.

He, however, said he directed FAAN to give out any information that was available as the contract award process progressed.  The committee was a bit taken aback when Director General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, said his agency was not carried along either in the conceptualisation or award of contract for the project, adding that as regulator of civil aviation in the country, NCAA ought to have been put in the future.

As much of the responses from FAAN, BPP and contractors who submitted bid for the project revolved around the Airbus A380 as reason for the high cost of the project, Demuren said there was nothing extra-ordinary about the weight of the aircraft.

He noted the wing-span as the only special feature in the aircraft and that had nothing to do with weight on a runway.  Asked if the runway, on completion, could be put into use without NCAA certification, Demuren said the regulatory agency would have simply not allowed it to be used if it did not follow guidelines of the NCAA or the International Civil Aviation Organisation (ICAO), which specification the proposed runway had, however, met, as the global aviation body had been notified of the project.

The committee also wanted to know if the bidding process was skewed to favour Julius Berger Plc against the interest of PW Nigeria Limited which submitted a bid of N30 billion for the project.  Both FAAN and the BPP had told the committee that PW wrote to say it was pulling out of the project because of its inability to meet with the time frame for completion of the runway.

The lawmakers’ attention was particularly aroused by the staggering difference between Julius Berger’s bid and that of PW, and wanted to know why FAAN and BPP, in the face of this, went ahead to award the contract to the former on 5 February 2010.

Managing director of PW Nigeria Limited told the committee that though his company had the competence to build the runway, having built several runways in the country, the shortness of time for completion of the project as well as additions to the runway, such as four taxiways, 1km road and airfield, would have put more burden on his company in terms of cost.

The lawmakers also wanted to know if PW could go ahead with its N30 billion bid were the duration for completion to be extended, but the company executive said the cost would obviously have to be reviewed upwards due to inflationary problems.

However, despite the many lacunae identified in the contract award process for the proposed Abuja airport runway, the committee insisted that the House of Representatives was ibn total support of construction of a second runway for the airport, citing security concerns and status of the city as the country’s capital.  It said it would work with the major stakeholders in the project to see how the cost could be review downwards.

This is how Chairman of the committee, Bethel Amadi, rounded off the very storming session:  “The House is in full support of a second runway for Abuja airport.  In fact, we are convinced that the House wants a brand new airport befitting of the status of a federal capital city as Abuja, but we want to also ensure that due process is followed in delivering it.”