Nigeria: FG Blacklists Siemens, Cancels Contract
This Day (Lagos) said:
6 December 2007
Posted to the web 6 December 2007
The Federal Government has announced the cancellation of a contract awarded to the German engineering company, Siemens, following the bribery scandal that implicated some former government officials. THISDAY checks revealed that this is the first step towards blacklisting the company as a result of the scandal which has created ripples since the news broke. The Federal Executive Council (FEC), which considered contracts that would strengthen the power supply and transmission of electricity generally in the country, yesterday announced the cancellation of a N128.4 million contract recently won by the German firm.
The Minister of Information and Communications, Mr. John Odey, who briefed State House correspondents in company with his Minister of State, Mr. Ibrahim Nakanda, on the outcome of the meeting, said the cancelled contract was for the supply of 14 indoor panels complete with circuit breakers for the improvement of power transmission in the country.
The FEC meeting chaired by President Umaru Musa Yar'Adua ruled that the firm, on "moral grounds," was not worthy of consideration for fresh contracts in the country in the face of the current scandal "which has seriously dented the country's image". He said government would not enter into any further dealings with Siemens under the current situation until the investigation into the bribery allegation had been concluded and the firm exonerated.
Odey said: "The Federal Executive Council (FEC) considered a memo from the President for the improvement of power transmission and a bid for the supplies of transmission maintenance equipment which Siemens Nigeria Ltd participated and won. FEC cancelled the bid of Siemens Nigeria Ltd because of the current investigation against the company relating to corrupt practices, which are at variance with the laws, and norms of this administration.
"The Federal Government places high premium on transparency and strong emphasis on zero tolerance for corruption. You will recall that this company is undergoing investigation in Nigeria and also in Germany for corrupt practices and as a result of that we excluded them from the bid and FEC cancelled the bid they won until this investigation is concluded and they are exonerated or otherwise.
"Since this is under investigation, on moral grounds we should allow this investigation be concluded before we deal with Siemens. The contract that was supposed to be awarded to Siemens will be represented to Council since we excluded them. We did not proceed to award that particular lot that they won. The ministry will resubmit for reconsideration. They will look at other bidders for that same lot before taking a decision. They will consider new contractors excluding Siemens Nigeria."
Asked if this would affect the power generation programme in the country since Siemens and other countries were involved, he said "the programme will continue. It is only the company that is suspended for now. The programme of government is not dependent on Siemens."
Siemens was fined 201m euros ($248m) by a Munich court in October after being found guilty of paying bribes. Siemens on its won had uncovered more than 1.3 billion euros in "suspicious payments", with Nigerian ministers or officials alone having allegedly received 10 million euros between 2001 and 2004. The company's chairman and chief executive both resigned over the scandal. Siemens accepted the court judgment. It also agreed to pay 179 million euros to the tax authorities.
Yesterday, FEC also awarded various contracts totalling over N3 billion for the supply of transformers with accessories and spare parts, combustion liners and switch gears among other items for the improvement of power generation and transmission in the country. Odey said Council considered the design, manufacture and supply of transmission maintenance equipment including two number 150MVA 330/132KV power transformers with accessories and spare parts and another six number 60MVA/132/33KV power transformer in total sum of N1.4 billion in favour of two companies Pyford Engineering Services Ltd and Incomtel Nigeria Ltd with the completion period of 12 months.
"Council also considered another memo by Mr. President for the supply of combustion liners assembly for frame 9GT 18 Delta 1V at Ugeli in Sapele Power Station. This is meant to restore the unit back to service in order to improve power generation of about 100MW. Council therefore considered and approved this contract in the total sum of N77,367,95 with the completion period of six months.
"Another memo from Mr. President to boost power supply transmission was also considered. It includes four number 33 11KV power transformers and 10 sets of 11KV indoor switch gears. The purpose of this contract is to reinforce and improve electricity generation and transmission in the country following electricity power supply deterioration. The project will be funded from the internally generated revenue of PHCN. Council approved this contract in favour of Messers Achive Nigeria Ltd in the sum of N164,993,198 with the completion period of 12 months. "Also FEC approved the supply of 10 sets of 11KV industries gears in favour of AK Electrical Ltd in the sum of N148.8 million with completion period of 12 months as well.
"Council also approved another memo for Delta Mac five control panels with spare parts for Ugheli Delta Electrical Power Business Unit in favour of Valence Holding Ltd in the sum N95.2 million with the completion period of another four months.
"Council further approved various contracts for supply of power equipments to various contractors with the list already with the ministry in a total sum of N1.8 billion, listing all various spare parts to help improve the transmission of power all over the country," he said.
Odey also said that the Federal Capital Territory Minister submitted a memo for consideration for the approval of Council for the award of contract for solar-powered street lights along outer southern express way from Ring Road one to Niger Barracks. "Council commended his efforts for using solar power energy as an alternative energy source and encouraged other agencies of government to emulate this effort. Council approved the contract in favour of Computech Nig Ltd in the sum of N127.4 million with completion period of 20 weeks," he said.