The Public Procurement and Disposal of Public Assets PPDA, says that the procedures on contract awards and executions at local government levels remain weak. PPDA’s Director for Procurement Audit and investigation Benson Turamye notes that the gap needs quick redress considering the Trillions of shillings in procurements handled by both the Central and Local governments.
July 5, 2013
A new technical instrument has been introduced to support South Africa’s strategy of increasing the level of local content in the goods and services procured by government and State-owned entities and to add impetus to the country’s re-industrialisation efforts.
The tool in question is a South African Technical Specification (SATS) 1286, which will be administered by a new Local Content Verification Office housed within the South African Bureau of Standards (SABS).
Trade and Industry Minister Dr Rob Davies, who presided over the official launch on Friday, says SATS 1286 sets objective criteria for the issuance of an audited ‘Local Content Certificate’.
The verification process follows on from the initial ‘designation’ of products and services that are required to incorporate minimum thresholds of local content before they can be procured by national and provincial State departments, municipalities and State-owned companies. The requirement is supported by updated Preferential Procurement Policy Framework Act (PPPFA) regulations, issued in December 2011.
The current thresholds range from 100% for textile, clothing and footwear procured for government-issued uniforms to 30% for digital television set-top boxes. But Davies stressed that these thresholds should be regarded as a “floor rather than a ceiling”.
The initial designations announced by the Department of Trade and Industry (DTI) cover rail rolling stock, electrical pylons, textile, clothing and footwear, canned or processed vegetables, some oral solid-dose pharmaceutical products, digital television set-top boxes, furniture, solar geysers and power and telecommunications cables.
But further rounds of designations will be introduced in future, following research and consultations.
SABS CEO Boni Mehlomakulu says the infrastructure is in place for the organisation to conduct the verification process, which will be required only for entities that win government tenders.
The process involves a self-assessment by the company that is delivered to the SABS in the form of a local content-declaration. A team of auditors then conducts an analysis of the documentation to verify the declaration, which is followed but a factory visit by a separate team of auditors. A consolidated document is then sent through to an approval board, which makes a final recommendation to the CEO, who issues the verification certificate. The costs of the process will be born by the winning bidder.
Mehlomakulu believes that multi-step process, which involves separate teams of auditors, has materially reduced the potential for fraud and corruption, but stresses that the SABS also operates an ethics hotline should an individual have concerns. The objective criteria employed also reduce scope for discretion, which tends to contaminate the administration of regulations.
Davies argues that there is significant potential to increase the domestic job creation around government procurement generally and also the multibillion-rand public infrastructure programme. However, without mechanisms to verify local-content claims the impact of ‘buy local’ initiatives could be diluted.
“We now have a standard and the infrastructure in place to verify,” he says, adding that breaches could lead to penalties and even the cancellation of contracts.
April 11, 2013
THE Bureau of Public Procurement (BPP) has advised state governors to set up a public procurement system as a way of ensuring further transparency and accountability in government.
Director-General of the BPP, Mr Emeka Ezeh made this call while speaking at a high level interactive session with a delegation of the Lagos State public procurement agency at the state house office in Abuja.
Mr Ezeh praised Lagos State for their procurement reform initiative, adding, however, that the nation would benefit as a whole if more states joined Lagos, even as few other states that have already introduced the reform.
The BPP boss emphasised the fact that there was no alternative to ensuring accountability, transparency and value for money in the public expenditure and contractive process if national development is to be guaranteed.
According to him, due process is the cardinal focus in the implementation of President Goodluck Ebele Jonathan’s Transformation Agenda, and it is also a common mantra in the international economics system and development.
Mr Akin Onimole, the General Manager and CEO of the Lagos State Public Procurement Agency, who led the delegation on the familiarisation visit to the Bureau, emphasised the fact that the Bureau of Public Procurement has set a standard through its public procurement reform that should be emulated in all the states. He stated that the Lagos State Public Procurement Agency has, in the last few years, watched with keen interest the giant strides of the Bureau and as such is most willing to follow in the same path.
AP via Huffington Post
October 10th, 2012
Kibaki noted recent increases of salaries for teachers and doctors, and said Kenya requires massive resources to implement a new constitution and meet other competing demands in the economy.
The legislators last week quietly awarded themselves the bonuses, sparking public outrage.
On Tuesday, at least 100 people, including a popular Kenyan musician, protested outside parliament shouting “thieves” and urging the president not to approve the pay bill.
Kenya’s 222 legislators currently make about $120,000 a year each. The minimum wage in Nairobi, the capital, is about $1,500 a year.
Kenyan parliamentarians are fast earning a reputation for trying to give themselves expensive perks. Last year parliament attempted to raise their annual pay to $175,000 but the idea was met with such fierce public resistance that they shelved the plan. Earlier this year parliament inaugurated a new 350-seat chamber, where each of the seats cost about $3,000.
Human rights and anti-corruption activists say the motion to increase the parliament’s bonus to $110,000 – a vote that passed Thursday night with only about 30 legislators present – violates the country’s 2010 constitution, which does not allow parliament to set its own pay.
Over 200,000 high school and primary school teachers held a strike last month over pay. The government bowed to the demands after three weeks of arguing there was no more money to raise the salaries.
Doctors called off their strike last week after walking out for 18 days to protest the poor state of public hospitals where some of the doctors have had to use their lights from their mobile phones in emergency situations to conduct procedures.
August 7th, 2012
DAFF hands over the investigations in the fisheries branch to the SAPS
6 Sep 2012
The Department of Agriculture, Forestry and Fisheries has officially handed its investigation into suspected financial and procurement irregularities, maladministration, and corruption in the Fisheries Branch of the department to the South African Police Services (SAPS).
“The investigation is effectively out of the hands of the department and the Minister. Once complete, the SAPS will advise the department on appropriate actions to be taken,” the acting director general, Sipho Ntombela confirmed.
In March 2012, the Department of Agriculture, Forestry and Fisheries, initiated a forensic investigation into the award and multiple extensions of the vessel management function to a shipping management company. Essentially the investigation had to establish whether there were irregularities in the past tenders and management thereof awarded to the company and to its business associates. Smit Amandla Marine has been providing the vessel management function to Government for the past 10 to 12 years.
The investigation mentioned above has reached a critical stage and the department has thus decided to hand it over to the SAPS for finalisation.
“The initial investigation was carried out by a reputable forensic firm that uncovered that there are possible cases of corruption in the Fisheries branch. The investigation by the SAPS is a culmination of this process”, Ntombela concludes.
Below please find a timeline of the events leading up to the handing over of the case to the SAPS:
- 2000 to 2005: The Department of Environmental Affairs and Tourism awards Smit Amandla Marine a tender for five years
- 2005 to 2010: The contact is extended for another five years, no tender process
- 2010: Contract is extended for a year
- 2011: Contract is extended for a year
- March 2012: Department of Agriculture, Forestry and Fisheries initiates investigation into the matter
- August 2012: Initial findings reveal possible irregularities in procurement, financial management and corruption
By Shehu Bubakar
August 4th, 2012
Completed in 1983, Zobe dam is still not being used for water supply, for local irrigation or for power generation.
The construction of Zobe Dam near Dutsin-Ma in Katsina state began in 1972 and was commissioned in July 1983 by the defunct second republic administration then President Shehu Shagari. It has however been abandoned soon after it was commissioned. The Dam, Weekly Trust learnt, could not be able to pump a single cup of water for consumption to the host community and other neighbouring states.
The Dam constructed specifically to provide potable drinking water to Dutsin-Ma and adjoining towns and villages, provide water for irrigation farming and serve as an instrument for flood control, but checks by Weekly Trust revealed that when in 1983 the Dam construction was completed and commissioned, successive administrations that ought to construct water treatment plans for the treatment of potable water and the construction of channels for distribution of water for irrigation were abandoned.
Constructed at the sum of N52 million in the early 80s, Zobe Dam occupies an area of 5,200 hectares with a 2.75 kilometers long standard embankment designed to prevent the water from spilling out of control. Though solid and still very strong to hold the 177 million cubic meters of water it is designed to contain, the earth Dam being manually operated get it water from Karaduwa and Bunsuru rivers and discharges its excess water to as far as Wamakko in Sokoto state where it joins the Sokoto River.
42 year old resident of Dutsin-Ma, Malam Abubakar Sani said though he was too young to know when the Dam was constructed, he grew up to see it as an abandoned project, adding, “The story I had about the Dam was not a very good one. Some people said Shagari could not be able to award contract for the laying of the pipes to draw water to Katsina and Dutsin-Ma because shortly after commissioning the Dam, he was over thrown by General Muhammadu Buhari.
“Buhari’s government was said to have refused to complete the project believing that the credit will go to the Shagari’s regime he over threw. Other successive administrations also abandoned it. When Buhari’s led PTF (Petroleum Trust Fund) embarked on the construction of the water treatment plan that could have made it to start treating water and pumping water for both domestic and industrial use, General Sani Abacha died and his government and the PTF regime died before the completion of the project.
“Obasanjo’s administration refused to continue with the project because it may make Buhari more popular being the initiator. And you know Buhari has all this while been the major opposition leader in the country. Not even the Musa Yar’adua’s regime could go ahead with the project because though very dear to the state and the development of irrigation activities and human welfare, the fact remains that the water treatment plant was initiated by Buhari and is an opposition leader. This is the most reasonable and acceptable theory you can ever get on the reason why the project is abandoned for this long period of time.
“We are very much aware that the present administration in the state did its best to get the federal government to re-award the contract but all its efforts failed. That informed the decision of the state government to award contract for the construction of its own Dam at the same Dutsin-Ma just a forth night ago. That is to show you that the state government and the people of the state have lost confidence in the Dam ever becoming functional,” he said.
But the Managing Director and chief executive officer of Sokoto-Rima River Basin Development Authority (SRRBDA) who are the custodians of all federal government own Dams in Katsina, Zamfara, Sokoto and Kebbi states, Engineer Khalid Yusuf said though it is not within his purview to know why the project suffers setback, he suspect inadequate funds.
“Possibly because of cash flow but it is not contractual. The fact of the matter is that one is not within my purview. It is under the purview of the federal ministry of water resources. Even the irrigation facility construction is under the ministry. But when the facility is completed and handed over to us, we are going to be the custodians.
“I think it has to do with the problem of cash flow. I don’t know much about it. I know it is a very laudable project in which government will be very proud to finish and put to use because it will impact very positively on the transformation agenda of Mr President. Once that project is put to use, it will increase food production. It will also provide job opportunity and improve on the income generation. We are talking of 1,200 hectares. It is not a small project.
“The dam was completed and commissioned by the then President Shehu Shagari in 1983. That is almost 30 years now. So, if somebody said it is underutilized, yes it is underutilized. I must admit that the company that designed and constructed that dam did an excellent job because it is still solid. It is still storing the water but unfortunately some of the things that will put the water into use have not emanated.
“For instance, there should be a regional water supply. The contract has been going on for a very longtime now. The water treatment plant is on the ground. Some of the pipes are there. When you go along Kafin Soli towards Kankiya you see some pipes and tanks being erected. Likewise the irrigation project which started and stopped. The farmlands are there. Majority of the channels have been constructed. I believe in few months that contracts can be completed. But because of problem of cash flow, work has stopped there. Once the project is completed, is a matter of few months we shall start tapping its potentials. It is long overdue,” he said.
He said some people are thinking in terms of installing mini-hydro power plant at Zobe Dam which he said can be made possible. He however, warned that things must be done right so as not to temper with the reason why the dam was initially constructed which include flood control, regional water supply and for irrigated agriculture.
“Yes, hydro power is one of the other facilities we can provide there. It has not been installed but it can be redesigned to incorporate it at both Goronyo and Zobe dams. Already, Bakalori dam has the facility but unfortunately it stopped functioning about two years after installation. That was in the 80s. However, government is interested in reviving the facility.
“We are testing the ground to see if the facility can be revived. Owing to the duration the facility has been out of service, some of the components needed to revive the hydro power turbines may no longer be available. The company that fabricated the turbines and the generators over 30 years ago may not be functional now. They are Italian companies. So, these are the things we have to review and rethink about,” he said.
Weekly Trust investigation revealed that Reynolds Construction Company (RCC) Nigeria Limited handling the construction of the water treatment plant had abandoned the job and demobilized from the site after constructing most of the required structures and even installed the required tanks and machines. What is not however clear is whether or not the installed machines are still serviceable after several years of neglect.
The construction of the two main channels awarded to CGC from the Dam to the irrigation farms with a combined distance of 44 kilometers have been abandoned after recording some achievements. One of the channels measuring 23 kilometers has recorded 12 kilometers while the other one of 21 kilometers has reached 11 kilometers before the company stopped work.
Both companies were reported to have abandoned the projects and demobilized from sites due to none payment of their contract sum by government. Though there was no evidence of vandalism of any equipment at the time this reporter visited the area, there is fear that some of the installed machines may decay.
Efforts made to seek comments from the Minister for Water Resources were not successful as he is either said to be busy or out on official assignment. However, a source at the ministry that spoke on condition of anonymity said frequent changes in government policies were responsible for abandoning such projects for long.
“Today government will merge us with the ministry of agriculture and the next day they will say we are on our own. Until you get leaders at all levels that knows the value of mass agricultural production, such projects that are capable of turning around the economy of this country will continue to be neglected or even abandoned. It is true that both CGC Nigeria Limited that was constructing the channels and RCC that was constructing the water treatment are being owed some money and have not been paid so sometimes now and so they all demobilized and left the sites.
“No, you do not blame the ministry but you blame members of the National Assembly from that state. What is their work? Don’t they know how important the project is to the state? What have they done to ensure that it is completed? What other work do they have more than to pursue their constituency projects? Let us face the truth,” the source said.
By Idris Akinbajo
May 21st, 2012
Four years after he was convicted of money laundering in France, Dan Etete, a former Petroleum Minister, through his company Malabu Oil, has become a billion dollars richer, courtesy of the Nigerian Government and Shell.
According to documents (filed March 22, 2012) before the Supreme Court of the State of New York in the US, President Goodluck Jonathan discreetly approved the transfer of the sum of $1.1bn to Mr. Etete on April 29, 2011, two weeks after he was re-elected.
The money was first paid to the Federal Government by two multinational oil companies: Nigeria Agip Exploration Limited (Agip) and Shell Nigeria Exploration and Production Company Limited (Shell) in respect of oil block OPL 245.
But shortly after the funds were credited to the Federal Government’s account, Mr. Jonathan ordered that it should be secretly transferred to a London account of Mr. Etete’s company, Malabu Oil.
It is not clear what deal Mr. Jonathan struck with Malabu, and on what basis the payment was made. President Jonathan’s spokesperson, Reuben Abati did not answer or return calls seeking his comment for this story. He also did not respond to a text message sent to him for the same purpose.
The government made the payment to Mr. Etete’s company even when it had repeatedly insisted that the award of the oil block to Malabu was done in violation of laid down procedures.
Shell insisted it had no knowledge that the government passed the funds to Mr. Etete’s company.
OPL 245: History
While serving as Petroleum Minister under late Head of State, Sani Abacha, Mr. Etete awarded his own company, Malabu, an oil block, OPL 245 in 1998.
The allocation was however reversed by the Federal Government under President Olusegun Obasanjo in 2001 when the FG described the allocation process as dubious. The block was allocated to Shell in 2002.
Following the revocation, a prolonged legal battle ensued with Malabu taking the Federal Government to court. In 2006, the Federal Government reversed itself and re-allocated the oil block to Malabu. This angered Shell which then filed arbitration proceedings in Washington.
Following the protracted legal battles, an agreement was reached between all parties.
In an agreement titled “Block 245, Malabu resolution agreement” dated April 29, 2011 between Malabu and the Federal Government, the FG agreed to pay Malabu $1,092,040,000 in “full and final settlement of all its claims, interests or rights relating to OPL245.” The agreement also stated that the rights to the oil block would be reallocated to Agip and Shell.
In a separate agreement between Shell and Nigeria, titled “Block 245 resolution agreement,” the two multinationals (Agip and Shell) agreed to Pay the same sum “for the purposes of FGN settling all and any existing claims and/or issues over Block 245…”
In other words, the multinational oil firms agreed to pay $1.1bn to the FGN with the knowledge that the money would be used to settle any existing claims that existed by any other party to the oil block…Read more.
- Shell, Eni paid $1.1bn for Nigerian oil block – US court (vanguardngr.com)
- No Niger Delta Indigene on list of Owners of 20 Richest Oil Blocks in Nigeria (thenigerianoracle.com)
- How Babangida, Abacha, Obasanjo Shared Nigeria’s Oil Blocks (thenigerianoracle.com)
By Piet Rampedi
January 29, 2012
The department is led by MEC Dickson Masemola, the provincial ANC deputy chairman, who is a close ally of Mathale and Malema.
The selected contractors were given the lucrative contracts in exchange for donating piles of cash towards the construction of the Limpopo ANC’s luxury headquarters, according to provincial government, ANC and business sources.
Three independent sources said the contractors were told by senior provincial ANC leaders to help finance the R40 million Frans Mohlala House, funded by unnamed businessmen and officially opened by ANC president Jacob Zuma last January.
The Sunday Independent can today reveal that Tumisho Makofane, the education department’s former general manager for school infrastructure, has resigned amid allegations that he played a central role in manipulating contracts for the benefit of businessmen linked to Mathale and Malema.
Makofane confirmed his resignation on Friday, but denied it was linked to the school infrastructure contracts. He also denied he was joining Aurecon, one of the companies which benefited from the multi-million rand contracts awarded under his watch.
“There is no such thing. I am not responsible for the awarding of tenders. You can come see the documents I have so you can see what the situation is,” said Makofane…Read more.