How Osun Govt Awarded N1.3bn Projects To Non-existent Companies

Beneath the surface of the Osun Public Procurement Agency’s proclaimed principles of transparency and fairness lies a disconcerting truth. Despite meagre resources and economic woes, projects worth N1.3 billion were awarded to non-existent companies between 2019 and 2021 during the tenure of former Governor Gboyega Oyetola. Despite noble promises of promoting competition, efficiency, and equal opportunities, the state government flouted its own laws and standards, leaving room for sharp practices and corruption to thrive. 

By Taiwo Fatola

Amidst the bustling reception of the Osun Public Procurement Agency (PPA), located behind the Governor’s Office inside the state government secretariat, Osogbo, a commanding roll-up banner takes center stage, boldly displaying the state’s ‘governing rule on public procurement.’ Quoted with pride from Section 23(1)(b) of the Osun State Public Procurement Law 2015, the banner resounds with the promise of “Promotion of competition, economy, efficiency, and equal opportunities to all parties eligible and qualified to partake in public contracts.”

 

 

A noble principle etched in ink, but beneath the surface, an investigation into projects awarded during the administration of the immediate past governor, Gboyega Oyetola, between 2019 and 2021, unravels an unsettling truth. OSUN DEFENDER’s in-depth scrutiny of the Open Contracting Data Standard (OCDS) portal on the state PPA website has unearthed a startling contradiction—a government that not only disregarded its sacred rules but veered from the very essence of fair public procurement.

The in-depth review showed non-compliance with neither the state public procurement law nor the public procurement manual. These crucial documents were intended to serve as beacons of transparency and accountability in the public procurement process for government ministries, departments, and agencies (MDAs), but investigations show that they made awards to non-existent companies, among other alarming irregularities.

For instance, on 29th January 2020, the Osun State Ministry of Works and Transport awarded a contract for the rehabilitation and spot patching of the popular Okefia to Old Garage Road, Osogbo, to Jescon Tech Nig. Ltd at the cost of N3,256,697. The ministry adopted selective bidding for the contract. According to Chapter 7.2 of the procurement manual, for selective bidding, quotations must be obtained from at least three reputable contractors.

Further checks show that only Jescon Tech Nig. Ltd submitted a bid and was subsequently awarded the contract without any competition from other bidders. Findings show that Jescon Tech Nig. Ltd, has no discernible online presence. The company cannot be found through a search at the Corporate Affairs Commission (CAC), which is the designated authority responsible for registering companies in the country and issuing certificates of business registration.

Moreover, Chapter 5 of the state procurement manual requires certified or notarized copies of essential documents, like business registration certificates, for eligibility to bid. Regrettably, these requirements were not followed.

Chapter 5 of the manual provides that “the eligibility criteria should be clearly stated in the bidding documents for each procurement. To ensure that these criteria are met, signed statements or documentary evidence may be requested to certify the eligibility.”  

The document further listed certified or notarized copies of the bidder’s certificate of business registration, certificate of incorporation, business license or similar document and certified or notarized copies of the bidder’s tax registration, tax clearance certificates or similar document as some of the documentary evidence for eligibility.

Sensitive Examination Materials in the Hands of Unregistered Contractor

In June and July 2021, the Osun State Examination Board awarded four contracts to another non-existent company. On June 9, 2021, a contract for the printing of 306,782 copies of assorted question papers was awarded to Adex Emma Success Global Resources at the cost of N10,353,960.

On June 30, 2021, Adex Emma Success Global Resources received two more contracts for printing 140,000 and 280,000 units of answer and continuation sheets respectively, costing N1.4m and N5.6m, respectively.

Similarly, on July 9, 2021, the Osun State Examination Board awarded Adex Emma Success Global Resources another contract for printing 125,502 continuation sheets. Notably, in all four contract awards, the selective tendering method was utilised, as observed in the case of the road rehabilitation contract awarded by the Ministry of Works and Transport.

Surprisingly, for all these contracts, Adex Emma Success Global Resources was the sole bidder, contrary to the requirement of at least three bidders, as outlined in the public procurement manual.

No trace of Adex Emma was found anywhere online. No website or social media handle related to the name was found. It is apparently not a registered entity as a search  on the CAC portal and other online company directories including B2bhint and Ng-check, turned up nothing.

Duplicate Contracts Awarded to Non-Existent Entities Across Multiple Years

During the 2019 budget year, Osun State allocated funds for drilling boreholes in 332 primary health centers. However, what is worrying is that two separate procuring entities embarked on the same projects with different budget IDs and OCID IDs. The budget ID and OCID ID serve as unique identifiers for government projects on the OCDS portal, making this apparent duplication all the more alarming.

For example, the state Ministry of Health awarded the contracts for the ‘Drilling of 150 Nos of Boreholes with stanchion and overhead Tank in 150 selected Primary Health Care Centers across the State of Osun’ and ‘Drilling of 182 Nos of Boreholes with stanchion and overhead Tank in 182 selected Primary Health Care Centers across the State of Osun’ on 5th April 2019 and 23rd May 2019, respectively.

Remarkably, both contracts were awarded to the same company, F. OTOT Nigeria Limited, indicating that the agency indulged in contract splitting. The OCID IDs for these projects are ocds-xwwr9a-000490-OS/HLT/02 and ocds-xwwr9a-000506-OS/HLT/02, respectively, with sharply differing Budget IDs – 000489 and 000505, respectively.

The reason behind splitting these projects into two remains unknown. However, the state procurement law in section 71(2)(f) expressly forbids and incriminates the act of splitting tender.  

According to section 71(2)(f), “It shall be an offence to split tenders to enable the evasion of monetary benchmark set.”

The Ministry of Health used direct contracting for the projects, but it is unclear if drilling of boreholes across the state met the criteria for direct contracting in the state procurement law and manual. According to the public procurement manual direct contracting method can only be used under exceptional circumstances when the goods and services required are only available from a supplier or contractor, or when there is an urgent need for such goods or services.

Curiously, on July 7, 2020, another state agency, Osun Road Maintenance Agency (ORMA) awarded the same projects, with identical titles and budget sum (of N288,750,016 and N350,350,016 respectively), but different OCID IDs once again to the same company, F. OTOT Nigeria Limited. The agency used the selective tender method and, surprisingly, no other contractor submitted bids for the project apart from F. OTOT Nigeria Limited.

The OCID IDs for the two projects, titled “Award of Contract for the Drilling of 150 Nos of Boreholes with stanchion and overhead Tank in 150 selected Primary Health Care Centre across the State of Osun” and “Award of Contract for the Drilling of 182 Nos of Boreholes with stanchion and overhead Tank in 182 selected Primary Health Care Centre across the State of Osun,” are ocds-xwwr9a-000954-OS/RMA/05 and ocds-xwwr9a-000976-OS/RMA/05, respectively.

These projects identities differ from the one awarded by the state Ministry of Health in 2019. The budget ID of the contracts facilitated by the Road Maintenance Agency are 000953 and 000975, respectively.

Findings by this newspaper showed that there is no trace of F. OTOT Nigeria Limited on the portal of the CAC or any other companies directory on the internet. However, a company with a similar name – F.OT OT Construction Services was found in the vendors list on the state public procurement website.

However, one Mr. Hamzat Adebayo, who identified himself as a director at F.OT OT Construction Services Company, said there was possible mismatch of identity. He said: “There must have been a mistake somewhere because government cannot award contract to an unregistered company. 

“F.OT OT Construction Services Company was registered in 2013 and we have been using it to execute project. As of September 2022, we upgraded it to F.OT OT Construction company limited. But the contracts that were given to us were given to F.OT OT Construction services. We’re duly registered. 

 

“Also, there must have been a mismatch because F.OT OT Construction Services Company did not receive any contract of borehole drilling from the Ministry of Works. Whoever is making enquiry should get his or her information correct. 

However, the reasons why an unregistered F. OTOT Nigeria Limited was awarded the contract could not be ascertained, since F.OT OT Construction Services was also found on the state PPA website to have also bid for and won some award contracts.

Upon visiting primary health centers across Irepodun and Orolu Local Government Areas, it was evident that the boreholes were indeed installed. However, a significant number of them are not functioning. The installations were reportedly carried out around June 2020.

Among the non-functional boreholes is the one at Ehingbo PHC in Erin-Osun, Irepodun LGA. During a visit to the facility, a community health worker who identified herself as Mrs Adepoju, said that the borehole stopped working about a month after its construction in June 2020. As a result, staff and patients are compelled to search for water from outside the facility.

Similarly, at Bolorunduro PHC in Ifon-Osun, Orolu LGA, the borehole was also non-functional. It was revealed that a staff member at the PHC had personally funded the borehole’s repair, but the person has not been reimbursed for the expenses incurred.

Olaniyan Akinwale, who works at the Bolorunduro PHC, expressed concern over the lack of water supply in the facility. He stressed that they have to contract someone to fetch water from outside the facility on a daily basis. Akinwale estimated that the health facility uses about 500 litres of water daily.

However, the borehole facilities at Araromi PHC in Ifon-Osun, Anwo PHC in Ilobu, Eleesi PHC in Ifon-Osun and Oke-Ila in Erin-Osun were functional at the time of the visit to these facilities.

 Osun MDAs keep mum

After initial attempts to obtain reactions from the concerned MDAs failed, Freedom of Information (FOI) Act requests were submitted to them, but no official response has been received.

During a visit to the Ministry of Works and Transport, Bashir Bello, an engineer and the Permanent Secretary of the Ministry attributed the delay in response to the FOI request to the need to obtain clearance from the Ministry of Justice before disclosing the information.

The Ministry of Works in a response signed by one M. A. Ojebode, an engineer, asked that the request for the information on the road project be directed to the state Ministry of Justice.

Similarly, in response to the request for information on the projects facilitated by her agency, the Registrar of the State Examination Board, Mrs. Bukola Akintola, directed that the information being sought should be directed to the Ministry of Justice.

Osun State is bound by the Nigerian Freedom of Information Act 2011, which states that if a public institution receives an application for access to information and believes that another public institution has greater interest in the information, it has a responsibility to transfer the application to that institution.

The referral to the justice ministry is curious as it has no interest in these projects. Also, Chapter 4.3(2) of the state public procurement manual states that the accounting officer of the concerned MDAs is responsible for ensuring compliance with the law and liable for breach or contravention of the law.

Zacchaeus Ategbero, an engineer and the General Manager of the Osun Road Maintenance Agency, claimed ignorance of the borehole projects despite evidence of his agency’s involvement on the PPA website. He promised an official response to the FOI request but has not replied as of the time of filing this report.

Similarly, at the Ministry of Health, Dr. Isiaka Adekunle, the permanent secretary, stated that clearance has been sought from the Ministry of Justice, and they are awaiting approval for the release of the information.

When reached for comment, Mr. Ismail Omipidan, the Chief Press Secretary to former Governor Gboyega Oyetola, questioned why the present government of the state is not being investigated, suggesting a potential witch-hunt against his principal.

He emphasised, “There is no such contract like rehabilitation of Oke-fia/Old Garage road. Kindly cross-check the information.”

Omipidan’s stance is founded on comments made by the then Special Adviser to the Governor on Education, Alh. Jamiu Olawumi, affirming that the awarded contracts for printing examination papers followed the procurement law, and all processes were meticulously adhered to in their allocation. Olawumi’s response was in respect of a report by Dataphyte on the violation of the state public procurement laws in the award of some contracts by the Osun State Examination Board.

Despite the evidence presented by the medium, the Special Adviser to the former governor maintained that due process was followed without providing any concrete proof to back his assertions. However, a look at the Dataphyte’s story shows that the investigated contracts are different from the ones investigated in this report.

“I do not think we have anything new to add on that,” Omipidan stated.

 “We don’t have power to do anything aside exposing issues like this”

Anthony Adejuwon, the Team Lead of Urban Alert, a Civic-tech initiative aimed at holding public institutions accountable, domiciled in the state, expressed his regret over the award of contracts to non-registered companies by the state government he added that his organisation has discovered such issues in the past but nothing was done to those indicted till date.

“It is saddening that in flagrant disregard for its own law, the Osun State Government seems to have institutionalised impunity in awarding contracts. This act can be identified as one of the reasons why projects are poorly executed, leading to lack of value for money. More painful is the perceived unwillingness of public institutions to address this corrupt practice that has further impoverished the people of Osun,” Adejuwon stated in a chat with this reporter.

He added that if the procurement law is not strictly adhered to, public funds will continue to stray into pockets of individuals who cannot deliver quality and timely projects. 

“With some journalists in the past, we have discovered this impunity and published them on many news platforms. Nothing was done till date. As an organisation, we don’t have the power to do anything aside from exposing issues like this,” Adejuwon concluded.

• This report is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting (ICIR).