NMDPRA awards depot construction to a non-existent company

By Audu Liberty Oseni

A government agency, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in what appears to be a practice that has helped undermine transparency in the oil and gas sector has awarded the construction of an oil Depot to a non-existing company.

Under the deal, NMDPRA with the mandate of providing a regulatory and fiscal framework for the Nigerian Petroleum Industry, awarded the construction of 500 Metric Tonnes (MT) of Liquefied Petroleum Gas (LPG) Depot in the Gwagwalada area of Abuja to Novertec Energy Limited.

Worse still, a search at the Corporate Affairs Commission (CAC) saddled with the responsibilities to regulate the formation and management of companies in Nigeria revealed that Noretek Energy Limited does not exist in its record. An indication that NMDPRA may have awarded the contract to a fake company that does not exist.

Divine Era Development and Social Rights Initiative (DEDASRI) and Media Advocacy West Africa (MAWA-Foundation) in the #DiscloseTheDeal project leveraged the Freedom of Information Act (FOI), wrote to NMDPRA requesting that it makes basic information about the contract such as the amount involved and the procurement process for selection available to them.

A request NMDPRA has since refused four months after even as the FOI mandates it to provide that in seven days.

It needs to be clarified the kind of procurement process undertaken by NMDPRA that resulted in the award of a multi-million Naira contract to a company that does not exist.

In a standard procurement process, it is difficult for Novertec Energy Limited, a company that has no traceable record in CAC to be given such a contract. There is no way it will scale through procurement bidding without proper documentation which a valid certificate of registration in CAC is a major requirement.

Procurement abuse has continued in Nigeria even as there are laws regulating procurement practices in the country. For instance, section 58 of the Public Procurement Act, 2007 makes it offence liable to five- or 10-years imprisonment for awarding contracts without due process and in line with the law. Section 38 of the Fiscal Responsibility Act 2007 makes it an offence for contracts that are not awarded in compliance with procurement rules.

Although, there exist laws that regulate contract awards in Nigeria targeted at addressing corruption, achieving transparency and accountability in the procurement process, the practice in Nigeria is that Ministries Departments, and Agencies (MDAs) often abuse the procurement process in the contract awards. A practice that facilitates corruption and undermines Nigeria’s development and growth.

NMDPRA’s refusal to make the information requested in the FOI available further confirms the secrecy of the activities of Nigeria’s extractive deal which makes it seem citizens have no right to know about the extractive deals.

Audu Liberty Oseni, Coordinator MAWA Foundation & Director of Communication, Centre for Development Communication