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…Fingered govt. officials deny invitation by EFCC
BY TITUS AKHIGBE
Allegations of multibillion naira fraud are increasingly resonating in Benin, Edo State capital, over two landmark projects, which the state government has substantial stakes in.
Sunday Times learnt that on August 23, 2023, the Edo State government allegedly awarded a monumental contract to Shapoorji Pallonji Nigeria Limited. The contract, valued at ₦15,397,368,022.49, was for the completion of the uncompleted building complex located near the Golf Course in Benin City and proposed as Radisson Hotel. The project is said to have languished at 85% completion for over 15 years.
Shapoorji Pallonji, an Indian firm located at Suite 7, 3rd Floor, Eleganza Plaza, Victoria Island, Lagos, allegedly received an upfront payment of ₦9,238,420,813.50 -60% of the total contract sum from the Edo State Government. The government said the payment was to enable the company to procure materials in bulk and mobilise to the site.
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The balance, ₦6,158,947,209.00, it said was to be paid through monthly interim valuations, but as the project proceeded, a web of suspicions began to unravel.
The real estate agency, Idia Retail Development Company Limited appeared initially as critical stakeholders in the project. This private company received the feasibility report on the hotel, for which the Edo State government paid ₦4.6 billion or 20% of the total contract sum of ₦23 billion to Afrinvest West Africa Limited.
The involvement of Afrinvest West Africa Limited, owned by the outgoing PDP governor, Godwin Obaseki, began in 2021 when it was contracted by Idia Retail Development Company Limited to conduct the feasibility study on the Radisson Hotel project. The firm was initially paid a staggering ₦2.5 billion for its report.
Acting on this report, the Edo state government arrived at an initial contract sum for the construction of the hotel project at ₦15.4 billion. This inexplicably ballooned to ₦23 billion soon after, ostensibly to accommodate earlier contracts awarded to various subcontractors, also by the state government.
One such subcontractor, Ace Facades Limited, based in Lagos received a contract on June 1, 2023, for the supply and installation of Aluminum Glazing Works and Alucobond Cladding, valued at an eye-watering ₦702,455,083,935.00. Another Lagos based subcontractor, 21st Century Evolution Systems, was also awarded a contract for the supply, installation, and commissioning of kitchen and laundry equipment, worth ₦1,594,130,474.66.
The Edo state government also allegedly awarded a contract to Banwo and Ighodalo, a law firm associated with Peoples Democratic party (PDP) governorship candidate, Barr. Asue Akintunde Ighodalo, and reportedly backdated it to December 2022, for the sum of ₦10,750,000,000.00. A payment of ₦7,525,000,000.00, representing 70% of the contract sum, was made as a mobilization fee. Ighodalo, a member of the Governor’s Economic team, since 2016, is now deeply entwined in the project’s financial web.
With these developments, Afrinvest’s fees reportedly surged to an astronomical ₦4.6 billion. This sudden increase also begs the question, what additional services did Afrinvest provide to justify such a hike in fees?
Moreover, all the contractors were allegedly paid 40% in Naira and 60% in US Dollars, a move that contravened the Central Bank of Nigeria regulations and raised further questions about the project’s financial management. To compound issues, the government also reportedly introduced what it calls the electronic government, principally for the award of contracts and approval of financial disbursements (E-governance).
The software is at the disposal of a contractor who, after the end of the Obaseki administration, can destroy the software so that there will be no trace of the illegal financial disbursements during the government’s tenure.
Closely linked with the Radisson Hotel scandal is that of the Benin City Shopping Mall, which the Edo state government initially labeled Shoprite. As it were, three years ago, the government demolished the State library headquarters along Sapele road, Benin City, to construct the Shoprite shopping mall.
The first contractor, said to have been picked by the Edo state government was A&K Construction Limited, which was paid 70% of the contract sum or ₦5,004,655,544.82 (Five Billion, Four Million, Six Hundred and Fifty-Five Thousand, Five Hundred and Forty-Four Naira, Eighty-Two Kobo) on the 3rd of November 2021.
However, no sooner was the contract awarded than the total sum was increased to ₦12 billion and subdivided to include the Indian firm handling the equally controversial Radisson Hotel Project, Shapoorji Pallonji Nigeria Limited.
Meanwhile, all this was supposedly after Persianas Nigeria Limited, which owns the rights to the Shoprite brand in Nigeria, was named as the “anchor tenant” by the Edo state government. The government had claimed that it entered into a partnership with it to hold 85% equity in the project for the land and the cost of construction, while Persianas Nigeria Limited was to hold a 15% stake to provide the overall technical input (including all relevant architectural and technical design drawings and coordination, expertise, the required tenancy/take-off to make the mall viable, and the management of the mall).
A&K Construction Limited had 52 weeks, or until January 2023, to deliver, but five months later, on April Fool’s Day or the 1st of April 2022, it rather submitted a request for approval of variation to the Edo state government to the tune of ₦1.3 billion, listing it as related “MEP additional works” and claiming they were not part of the contractual BOQ.
Mr. Austin Osaretin Osakue, the Managing Director of Edo State Public Building and Maintenance Agency, from the blues allegedly backed up request for this variation and got ₦331 million for what he referred to as “A&K Construction Limited demand for variation with respect to the ongoing Benin Mall Project.” In this action, Osakue, a public servant, took the side of A&K Construction Limited against the State.
Meanwhile, Persianas Nigeria Limited soon after declined their involvement in the Shoprite project, blaming overpricing. Whereas it quoted ₦4 billion for the construction, including all fittings, the state government gave the contract to A&K for an initial ₦5.4 billion before increasing it to ₦6.1 billion.
Short of pulling out of the shopping mall project, the Edo state government threatened to reduce Persianas Nigeria Limited’s stake while manipulating and inflating the contract sum arbitrarily up to a half a dozen times.
Today, the shopping mall has gulped over ₦12 billion, and even as it will no longer bear the name Shoprite, it has become a seeming safe conduit for top officials of the outgoing PDP Edo state government to empty the State coffers into their private pockets.
For instance, in 24 hours precisely on the 14th of June 2023, the Obaseki government approved ₦148,617,869.68; ₦59,561,876.81; and ₦690,000,000.00 respectively as variation for the shopping mall. An additional ₦2,010,772,866.15 was also paid out for the execution of additional undisclosed work on the mall.
Conceptualised as Shoprite to be managed by Persianas Nigeria Limited, as is the practice everywhere, while shopping for a new label, the Obaseki-led PDP government has mysteriously left out the Edo Property Development Authority and instead awarded the Benin City Shopping mall management to a private firm, Broll Property Services Limited, owned by one Mr. Bolaji Edu of 47 Marina Rd, Lagos Island, Lagos, for a fee of ₦2 million every three months and 3.5% commission of gross rent collections.
In the process, the government also dubiously introduced one Messrs. Redwire Marketing Company, located on the 5th Floor Mulliner Towers, 39 Alfred Rewane Rd, Ikoyi, Lagos, listed as ‘Promoter’ into the mall project. Redwire is owned by Governor Obaseki’s longtime friend, and the company is responsible for the mall’s image management.
Ironically, in both projects, the Edo state government allegedly chose to bypass its army of lawyers occupying the different departments in the Ministry of Justice of Edo State and reportedly paid the PDP governorship candidate, Ighodalo’s law firm, Banwo and Ighodalo, in Lagos, the sum of ₦10 billion for advisory services.
Shortly after the All Progressives Congress (APC) accusation, The Daily Times was reliably told that the governor informed his Executive Council that a core investor has bought 60% stake in Radisson hotel.
The questions begging for answers on the Radisson Hotel and the Benin Shopping Mall projects by Edo people are: who owns Idia Retail Development Company Limited? Why did the Edo state government pay Afrinvest West Africa Limited for a feasibility report it handed over to Idia Retail Development Company Limited whereas the State government is financing the cost of the project from state coffers? Why did the Edo State government increase the hotel project’s contract sum from ₦15 billion to ₦23 billion to accommodate a substantial payment to Ighodalo’s law firm, Banwo and Ighodalo?
What is the shareholding of Edo State Government in the Radisson Hotel and the Benin City Mall? Why is the management of the mall with a private company based in Lagos? What is the actual project cost of Benin City Mall as of today? What is the Chief of Staff to Governor Obaseki, Osaigbovo Iyoha’s stake in the Benin City Mall and how much did he pay for the basement of the mall? Why is Banwo and Ighodalo, the law firm owned by the PDP governorship candidate, responsible for all legal advisory services relating to the Radisson Hotel and the Benin City Mall projects?
The opacity surrounding all the fiscal transactions for the Radisson Hotel Project and its twin, the Benin Shopping Mall, suggests a need for an independent audit to ensure that public funds were properly utilised and free of fraud.
Is it true that the ownership of Radisson Hotel is being transferred to an individual whereas the impression is that it is being built by the state government? Then secondly, is it true that the EFCC has invited the officials of this government for interrogation?
Responding, the Commissioner for Communication and Orientation, Hon.Chris Nehikhare posited, “The investment into Radisson Hotel is 100℅ government investment. This is what government does because we need a five star hotel in Edo State. We have only one rated hotel per say, that’s Protea Hotel.
We’re expecting high profile tourists to come into the state, we are having only one hotel recommended which is Protea Hotel. We need to have other hotels recommended by international organizations when people need to view our tourist locations. That’s why it’s important to have a place like Radisson established.
They’re bringing back artefacts, the Oba of Benin is going to build a royal museum, Edo State Government is building a museum for West African arts. We’re reclaiming the moat. We’re expecting people to come from abroad to come and look at these places. You want to give them a place where they can confidently stay.”
On the allegation that the Economic and Financial Crimes Commission (EFCC) invited certain government officials for questioning, based on alleged petition it received, Nehikhare said, “There is no such thing. EFCC has not invited any of us.”
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