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Siemens in bribery scandal

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Indications emerged on Sunday that intense pressure was being mounted on President Umaru Yar‘Adua to revoke a new contract for the rejuvenation of the nation‘s power sector which was signed with a German company, Siemens.

The pressure, according to sources, is from some new ministers and special advisers to the President who are said to be striving to maintain a public image that shuns corruption.

This was the fallout of the detailed revelations by SATURDAY PUNCH on how the company allegedly bribed a former Nigerian President, Vice-President, and some other top government officials to secure plum contracts.

The revelation is believed to have sent jitters down the spines of those allegedly mentioned in the deals.

“Although, it happened on a weekend, when the Christmas break had shut down government activities; however, a strong representation was made to the President on Saturday night on the need for the government to revisit the new Siemens power contract, in the light of the new revelations on the Siemens bribery scandal,” a source told our correspondent on Sunday.

The source, who is very close to the government, said a number of the new ministers and top aides of the President were concerned about the image of the government and how its profile might be further damaged if it was seen to be unbothered about the adverse effect that courting Siemens might portend.

The Federal Government had, on August 19, 2008 signed the power contract though it had earlier suspended dealings with the German firm.

The suspension followed the cancellation of a supply contract with the firm based on allegations that it gave more than $14m in bribes to Nigerian officials.

The alleged pressure came just as the Economic and Financial Crimes Commission told our correspondents on Sunday that it was on top of the case.

The commission‘s Spokesman, Mr. Femi Babafemi, said, “We have never stopped investigating it for a moment. For a matter with such international dimension, we have reached an advanced stage.”

The company was found guilty in Germany and fined over $100m. It later tendered an apology to President Umaru Yar‘Adua.

Before the apology, however, the Attorney-General of the Federation and Minister of Justice, Mr. Michael Aondoakaa, had said he would go to Germany for assistance on the case file to enable him prosecute the Nigerian officials involved, adding that the entire episode was embarrassing to the government.

Another source told one of our correspondents that the EFCC had, three weeks ago, recorded a breakthrough when a top operations director of the commission travelled outside the country and returned with useful information that could nail the suspected beneficiaries of the bribery.

The director, our correspondents reliably learnt on Sunday, had been instructed to update his files and turn them in this week.

However, before the Federal Government changed its mind on Siemens, nothing indicated that it had lifted its suspension on the German firm.

The contract to Siemens came after talks between the President and German Chancellor, Angela Merkel, in 2007.

The projects are expected to inject about 6,500 megawatts of electricity into the national grid network between 2008 and 2020.

According to the Presidency, the scope of the power projects covers rehabilitation and implementation to supply water; problem solving assistance; and capacity building.

Apart from Siemens, other German firms involved in the partnership are EVONIK, ArGe, E.ON and KfW Ipex Bank.

Under the rehabilitation and implementation to supply water category, Siemens is the project lead for the provision of about six units of Small Bonny Light Crude Oil/HFO turbines in Kaduna State by 2010.

The company is also the project lead in the project to add three new turbines and waste recovery boilers/steam turbines at Geregu by 2011 and 2014 respectively.

However, another German firm, ArGe is to serve as the project lead in majority of the projects, including audit and expansion planning at Kainji by 2013.

Other projects to be led by ArGe include feasibility study for small hydro power and engineering projects at Obudu by 2011; feasibility study, planning and implementation for a waste to power project at Kano ; and preparation and tendering/investment and construction for photovoltaic power supply in rural areas at Sokoto by 2010.

ArGe will also conduct a feasibility study for a pilot wind-power plant at Katsina by 2010 as well as solar thermal power at Maiduguri by 2012.

In the same vein, Evonik is the project lead for a grid connection and extension project at Ikot Abasi, as well as audit and rehabilitation study on thermal power stations at Egbin, Sapele, Delta and Afam.

Evonik is also the project lead for a coal-fired power station in Gombe State by 2015.

Another German firm, E.ON is the project lead for the construction of an LNG plant with IPP and gas gathering for domestic use in Akwa-Ibom State by 2014.

Projects under the problem solving category, which are to be led by ArGe and KfW Ipex Bank includes audit of substations, grid bottlenecks and requirements of automatic grid operation in all power stations across the nation between 2008 and 2014.

Also included in this category are projects for the introduction of power communication networks for PHCN and advisory mandates on IPP workshops.

In the capacity building category, EVONIK is to serve as the project lead for implementation of dual vocational training centres and work shops for power plant staff at Geregu, Port Harcourt and Abuja .

The German Ambassador to Nigeria, Mr. Joachim Christoph Schmilliue, and the Nigerian Ambassador to Germany, Alhaji Abdul Rindap, signed the Memorandum of understanding for the partnership on behalf of the two countries.

Yar‘Adua had explained that the ”original objective of the partnership” was to ”address Nigeria‘s energy challenge while guaranteeing Germany short and long term energy security.”

According to him, government‘s action was informed by its ”unwavering commitment to evolving those requisite deliberate, structured policy choices that will enable us rapidly rebuild, upgrade, and expand our critical infrastructure.”

The MOU, the President stressed, would be implemented immediately so that the partnership could commence in earnest.

He had said, ”I assure you that the Nigerian Government will ensure the speedy implementation of the agreed terms of the MOU.

“I expect that our Energy Council would, in collaboration with our Partners, establish a Joint Secretariat to work out the modalities for operationalising the partnership.”

However, reacting to the latest development, the President of the Manufacturers Association of Nigeria, Mr. Bashir Borodo, said that the decision to continue to do business with Seimens was a contradiction of the government‘s anti-corruption stance.

“It is a contradiction, but we also understand that they apologised and they said they were turning a new leaf. There is also the issue of technology and know-how, but I personally think that maybe the apology may have been a factor.

“We also have to consider that maybe the company is deeply involved in the power sector and government may have paid for services that are yet to be delivered, but the most important thing is that these allegations must be proved and people prosecuted.”

Borodo said that in order to avoid situations in future where government paid for hugely inflated contracts due to the culture of graft and kickbacks in the contracts awards process, it must insist on value for money.

He said, ”Government must insist on value for money. Contract information should be checked, after all you cannot hide these things. The prices of good and services are well known. You can get everything on the Internet. Even if the information is not readily available, you can contact multilateral agencies such as the World Bank and several United Nations agencies, which can supply the information and tell us how it was done elsewhere and how much was paid.”

He said a situation where government officials allowed loopholes in the contract awards process must be addressed.

”If you feign ignorance or allow all these loopholes, then you are also a culprit and should be treated as such,” he said.

Efforts to speak with the Minister of Information and Communications, Prof. Dora Akunyili, were unsuccessful as one of her aides told one of our correspondents on Sunday afternoon that she could only be available for comments at 8pm. But repeated calls to her telephone at 8pm were not picked. A text message sent at 8.30pm to her phone was also not replied.

Similarly, the Special Adviser to Yar’Adua on Communications, Mr. Segun Adeniyi could not be reached for comments.

Source: Punch

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