• Handbook: Board can only approve contracts
How can President Muhammadu Buhari get a clue to the $25billion contracts row in the Nigerian National Petroleum Corporation (NNPC)?
The President met with the dramatis personae – Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and NNPC Group Managing Director (GMD), Dr. Maikanti Baru, last Friday in order to get to the root of the matter.
In his leaked letter to the President, Kachikwu claimed that Baru awarded five major contracts worth $25 billion which were never brought before him or the NNPC board.
Last night, The Nation gathered that the Presidency might call for the Minister or the board’s meetings to guide it on the matter. This, sources said, might have been informed by the claims of Baru and some members of the board that there was “board concurrence.”
But, the NNPC Handbook, obtained yesterday by The Nation indicated that NNPC board is not the approving authority contracts.
The board can only review contracts and advise the NNPC management.
Sources said the President was still trying to get to the root of the problem between Kachikwu and Baru because of alleged gaps in the minister’s memo.
The crisis is believed to have been compounded of claims by some NNPC board members, which contradicted Minister.
A highly placed source said: “There are still claims and counter-claims by relevant stakeholders including the Minister, the GMD and board members.
“To untie the knot, the Presidency may retrieve and screen the minutes of the meetings of the Board of NNPC. The President will consider all angles to the circumstances behind the transactions.
“The Presidency is being painstaking because it felt scandalized by the leakage of the Minister’s memo and some distorted facts in it.
“For instance, it is untrue that Baru disrespected or ignored the directive of Vice President Yemi Osinbajo on the $9.2billion Escravos Gas Pipeline Project.
“Apart from discussing and reviewing it with the Board of NNPC, the GMD wrote a June 29, 2017 memo to the then Acting President who asked him to come through the Minister of State.
“In an August 15 memo by the Chief of Staff to the Vice President, the then Acting President demanded for the Minister’s input. And on August 22, 2017, the Minister replied and endorsed the transaction after stating his reservations.
“And the international interest which the memo had generated has put a moral burden on the presidency to come out clean by laying all the cards on the table for Nigerians and the International Oil Companies (IOCs) some of which had been implicated in the $25billion transactions.
“The memo touched on the anti-corruption agenda of the administration of President Buhari and it is ready to get to the root of the issues contained therein.”
The NNPC Handbook (January 2017) cites the NNPC Tenders Board as the final approving body for NNPC awarded contracts.
But contracts for a value beyond the financial limits of the NNPC Tenders Board will go via the Board of the Federal Executive Council for approval.
The Handbook reads in part: “Due process involves the award and execution of contracts, projects and other activities by organisations openly, economically and transparently in accordance with the provisions of the law and without any regard for self-interest.
“NNPC as an organization has established a Tenders Board in all its subsidiaries as well as the Corporate Headquarters.
“By the provisions of the Public Procurement Act 2007, the NNPC Tenders Board is the final approving body for NNPC awarded contracts.
“Any contracts for a value beyond the financial limits of the NNPC Tenders Board will go via the Board to the Federal Executive Council (FEC) for approval.
“The limits of financial authority for expenditure as approved by the Federal Government are as follows:
Federal Executive Council (FEC) — (From N2.70billion or from US$20million)
NNPC Tenders Board-(From N1.40billion up to N2.70billion and US$410million up to US$20million
Group Executive Committee (GEC)—-( From N540 million up to N1.40 billion and from US$4 million up to US$10 million)
Directorate Executive Committee (DEXCOM)—( From N270 million up to N540 million and from US$2 million up to US$4 million
Management Executive Committee (MEXCOM)—-( From N70 million up to N270 million and from US$0.5 million up to US$2 million
Divisional Committee (DIVCOM)—( From N13.50 million to N70 million and from US$0.10 million up to US$0.50 million)
Group Managing Director (GDM)— Less than N40 million or US$0.30 million
Managing Directors at Subsidiary Business Unit (SBU) level— Less than N13.50 million or US$0.10 million.