The embattled Group
Managing Director of the state oil firm, NNPC, Maikanti Baru, made his first
public defence of the allegations against him, saying he did no wrong.
Mr. Baru has faced
stringent criticisms since a letter written by the Minister of State for
Petroleum, Ibe Kachikwu, leaked to the media.
In the letter addressed to
President Muhammadu Buhari, Mr. Kachikwu, who is also the chairman of the Board
of NNPC, accused Mr. Baru of illegality by awarding contracts worth about $25
billion (N9 trillion) without following due process in consulting the NNPC
Board.
He also accused Mr. Baru
of insubordination and improper appointments in the state oil firm.
In his response, sent to
PREMIUM TIMES on Monday, Mr. Baru admitted not consulting the NNPC board in the
contract awards, saying such consultations were not necessary as he got
approvals for his actions from President Muhammadu Buhari.
“It is important to note
from the outset that the law and the rules do not require a review or
discussion with the Minister of State or the NNPC Board on contractual
matters,” Mr. Baru said. “What was required was the processing and approval of
contracts by the NNPC Tenders Board, the President in his executive capacity or
as Minister of Petroleum, or the Executive Council of the Federation, FEC.
“There were situations
where only approval by the NNPC Tenders Board was required, while in other
cases, based on the threshold, the award must be submitted for presidential or
FEC approval.”
Mr. Baru’s stance appears
to conflict with Section 2 of the NNPC Act which states that “the affairs of the
Corporation (NNPC) shall, subject to Part II of this Act, be conducted by a
Board of Directors of the Corporation which shall consist of a Chairman and the
following other members.”
The GMD’s position would,
therefore, imply that the NNPC “affairs” to be conducted by the board excludes
contractual matters, a stance he emphasised.
According to him, the NNPC
Board has no role in contracts approval process, as members were appointed by
government for the purpose of approving NNPC’s work programmes, corporate plans
and budgets.
VALUE OF CONTRACT
Mr. Baru also questioned
Mr. Kachikwu’s valuation of the contracts awarded without consulting the NNPC
Board.
Citing both the Crude Term
Contract and the Direct Sale and Direct Purchase, DSDP, agreements, Mr. Baru
said contrary to Mr. Kachikwu’s allegations, no specific values of $10 billion
and $5 billion respectively were attached to each transaction to warrant them
being classified as contracts above NNPC Tenders Board limit.
He said the contracts were
mere shortlist of prospective off-takers of crude oil and suppliers of
petroleum products under agreed terms, which were not required to be presented
as contracts to the NNPC Board.
Describing as “most
unfortunate” allegations by the minister that he was not involved in the
2017/2018 contracting process for the Crude Oil Term Contracts, COTC, Mr. Baru
said Mr. Kachikwu was not only consulted, but his recommendations were taken
into account in following laid down procedures for the award of the contract.
He said the NNPC
contracting process was governed by the NNPC Act and the Public Procurement
Act, 2007 (PPA), which spell out the procurement method and thresholds of
application as well as the composition of Tenders Board as provided by the
Secretary to the Government of the Federation (SGF) Circular reference no.
SGF/OP/1/S.3/VIII/57, of March 11, 2009.
In line with the NNPC
procurement process, Mr. Baru said, authority to approve contracts resided with
the NNPC Tenders Board, NTB, and contracts above certain threshold would then
be referred to FEC for approval.
Under the NNPC contracting
process, Mr. Baru said, the NTB is authorised to approve contracts valued up to
a maximum of N2.7 billion, or $20 million; while contracts above that value
would be sent to FEC for approval upon receiving certificate of no objection
from Bureau for Public Procurement.
On the other hand, he
said, the NTB was responsible for approval of day-to-day procurement
implementation.
Members of the NTB consist
the GMD NNPC as the Chairman/chief accounting officer, with heads of department
(Group Executive Directors) as members and the head of procurement (Group
General Manager) as the secretary of the NNPC Tenders Board.
Source: premiumtimesng.com
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