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38 Days To Go: FG enmeshed in N142bn contract row

…shuns court order, grants second approval for E-Customs Project

  • Buhari may have been misled – First Concessionaire’s lawyers

The E-Customs Project is worth $3.1bn (about N142bn).

Rising from the Federal Executive Council, FEC, meeting presided over by Vice President Yemi Osinbajo, on Wednesday, the Minister of State, Finance, Budget and National Planning, Clem Agba, said Council approved a memo appointing Messrs Bergman Security Consultant and Supplies Limited as project sponsor, Africa Finance Corporation, as lead financier while Huawei Technologies will be retained as lead technical service provider.

 

Agba said he was unaware of a pending court order on the matter although two senior advocates (SANs) had written the Minister of Justice and the Minister of Finance, Budget and National Planning on the need to obey a court order in a suit FHC/ABJ/CS/848/2022 filed by the original concessionaire, Messrs E-Customs HC Project.

 

Available records indicate that on September 2, 2020, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, presented a memo number EC2020/153 to the Federal Executive Council, FEC, the highest decision-making body of the Federal Government, and secured approval for the two plaintiffs to be granted the concession.

The FEC ratified the Modernization Project with specific directives to implement full automation of all NCS business processes and procedures through the development and implementation of a robust and secure ICT platform. This entails complete systems integration with the current ICT platform; development and implementation of modern customs border stations, airports and marine posts.

Ahmed told State House reporters at that time that the concession was awarded in favour of Messrs E. Customs HC Projects Nigeria Limited for a concessionary period of 20 years. It was projected that government will earn about $176 billion during the period.
The original concessionaire has raised the alarm of “a plot” to scheme out the approved concessionaire, Messrs E. Customs HC Project Limited, and replace it will an entity allegedly registered at the Corporate Affairs Commission (CAC) on April 5, 2022, with one Umar –Ajijola Jummai Zainab as one of the Directors and shareholders.

The alleged side-track of due process by top officials of the Buhari administration may have thrown the E-Customs Project in a cul-de-sac. With the recourse to litigation by the parties involved, it is now coming to light that Buhari may have been misled to override an approval granted by the FEC which he presided over in September 2020.

The claim by Agba flies in the face of available information. Senior lawyers, Messrs Ahmed Raji and Dipo Okpeseyi, in separate letters last week, warned the Minister of Justice and Attorney General of the Federation (AGF); the Minister of Finance, Budget and National Planning and Secretary to the Government of the Federation (SGF) of alleged efforts to obtain the “Federal Executive Council’s approval and or ratification of the re-award of the E-Customs Modernisation Project.”

In a follow-up letter to Osinbajo, Ahmed Raji and Co. called attention to the pendency of a suit on the subject matter at the Federal High Court, Abuja, and alleged that the Ministry of Finance, at the goading of the NCS Comptroller General )CG), had perfected plans to present a memo for the Council’s ratification of a new concessionaire in a brazen disregard for the rule of law.
Specifically, the lawyers had asked the FEC to suspend, discontinue or discountenance any request to initiate deliberations or a fresh request for approval for the award of the said contract to any other bidder aside the original approval granted by FEC to Messrs E- Customs Project Limited.

“It is in spite of all these that the Nigeria Customs Service is pushing to have the FEC grant another approval with the sole purpose to embarrass, over reach and undermine the earlier approval and ratification by the FEC and prejudice the matter pending in court,” Okpeseyi said in another letter to the SGF dated April 11, 2023. The letter was copied to the Minister of Justice, the Minister of Finance and the NCS CG.

In an affidavit deposed to by Alhaji Umar Tanko-Kuta, representative of the plaintiffs in the suit, he had averred that the FEC, on September 2, 2020, approved the appointment of Messrs E-Customs HC Project Ltd as the concessionaire for the project on a 20-year concession agreement.

The Federal High Court, Abuja had, in June, 2022, restrained the Federal Government from enforcing or giving effect to the agreement on the Customs Modernisation Project, otherwise known as E- Customs, allegedly executed by its agents on May 30, 2022 which substituted the rightful concessionaire with another company – Trade Modernization Project Limited.

On February 20, 2023, Justice Inyang Ekwo asked all parties to preserve the res of the matter and do nothing to interfere with the proceedings.

The court also issued an order of interim injunction against the Federal Government or its agents, acting through FEC, from retrospectively ratifying the decision to concession the Customs Modernisation Project, also known as E-Customs Project to Trade Modernization Project Limited, Huawei Technologies Company Limited and Africa Finance Corporation.

The court specified that the order shall last till the hearing and the determination of the suit brought against the Federal Government and other parties by two aggrieved companies.

Recall that the plaintiffs, E-Customs HC Project Limited and Bionica Technologies (West Africa) Limited, jointly challenged the alleged unlawful replacement of their names in the concession agreement earlier approval by President Muhammadu Buhari and ratified by FEC on September 2, 2020.

Counsel to the two aggrieved companies, Anone Usman of Ahmed Raji Chambers, had argued an ex-parte application praying the Federal High Court for the interim orders against the defendants to protect the interest of their clients.

Ekwo, while ruling on the ex-parte application, granted the prayers of the plaintiffs having placed sufficient evidence of interest in the concession project.

Defendants in the suit are the Federal Government of Nigeria; Attorney-General of the Federation; Minister of Finance, Budget and National Planning; ICRC; NCS; Trade Modernization Project Limited; Huawei Technologies Limited; Africa Finance Corporation and Bergman Security Consultant and Supplies Limited, being 1st to 9th defendants respectively.

 

The two plaintiffs had, in their statement of claim, narrated how they proposed to carry out the Customs modernization project through several government officials for the benefit of the NCS.

 

They claimed that, after series of meetings and negotiation with some of the defendants, Buhari granted anticipated approval for the E- Customs project

They averred that, on September 2, 2020, the Minister of Finance presented a memo, number EC2020/153, to FEC, and secured approval for the two plaintiffs to be granted the concession.

Warning

Indeed, Bionica Technologies, the lead developer of the project, raised several red flags, warning of the steps taken by NCS and ICRC to undermine the earlier agreement sanctioned by FEC.

 

On April 25, 2022, the company wrote the Minister of Justice, referring to several correspondences detailing the role played by the Chief Law Officer of the country to carry out the instructions of the President and the FEC. The letter reads, inter alia: “We were highly surprised, bewildered and in a state of dilemma when we learnt that the draft Concession Agreement, negotiated and approved by the HAGF (subject to observation/comments contained in your Letter, which observations were duly incorporated in the revised draft Agreement) and forwarded to the HMF in December 2019 was re-opened by NCS, a parastatal under the FMOF and sent back to your office for review.

 

“We find it strange, unconventional and against Civil Service ethics and due process that a draft Agreement already vetted and approved by the FGN’s highest law officer (HAGF) and forwarded to the HMF (the author of the letter requesting HAGF’s vetting and approval of the draft Agreement) was sent back to your office for a second review and second approval for reasons best known to the authority asking for review.

“At this juncture, it is pertinent to ask whether it is acceptable and lawful for the NCS – a parastatal under the FMOF – to just wake up one day and decide that it was not in agreement with the review carried out by the Chief Law Officer to the Federal Government and, therefore, the reviewed Agreement should be sent back to the approving officer to de-approve, carry out a second review and re-approve what he had earlier approved. Was the NCS acting on the directive of the HMF?

“It is worthy of note that as at this moment, the HMF is the custodian of the original approval conveyed to her by HAGF in December 2019 whilst the NCS is having another approval of February 2022. There were no directives from the approving authorities that the original draft Concession Agreement for execution made pursuant to HAGF’s approval should be re-negotiated or substituted.

“The NCS substituted the earlier Concession Agreement as approved in December 2019 which featured material amendments and changes to certain boiler plate clauses which were agreed during the negotiation in 2019. The ICRC, which is a regulatory agency, seems to have assumed the role of the transaction advisers by actions at the meetings where we consistently made it clear that this draft Concession Agreement had already passed through due process and could not be subjected to another review.”

 

In another letter to the SGF on May 24, 2022, Bionica Technologies alleged that “the ICRC, with others, tried to undermine FEC’s authority by attempting to substitute the negotiated terms and conditions approved by FEC with a corrupted version of the Concession Agreement which was neither negotiated by the parties nor approved by FEC. At every meeting of the project since FEC approval was obtained where ICRC was represented by Mr. Jobson Ewalefoh, he claimed that FEC approval to this project is subject to approval by the ICRC.”

 

But on May 23, 2022, the Customs CG wrote the President, by-passing the Minister of Justice, the Minister of Finance and the SGF. He told the President that Bionica Technologies rejected the concession agreement “vetted and approved” by the AGF (Minister of Justice). He said other stakeholders were ready to execute the contentious agreement and perform their roles in the implementation of the project.

The NCS CG told the President that Bionica “formally wrote” to inform Customs, ICRC and other stakeholders of its rejection of the concession agreement and withdrawal from further participation at meetings scheduled by the NCS and the ICRC. He further described Bionica’s attitude as contentious and recalcitrant and that the company rejected the agreement drawn by the AGF and declined to proceed.

Against any known law, the CG asked the President to approve that the project proceed under a Special Purpose Vehicle designated as Trade Modernisation Project Limited with the exclusion of Bionica Technologies, by implication overriding the approval granted by FEC in September 2022!

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