Procurement Observation and Advocacy Initiative, an NGO, has said the proposed amendment of the Public Procurement Act, increasing contract mobilisation fee from 15 to 50 per cent was unhealthy for Nigeria.
Mohammed Attah, National Coordinator of the NGO, told journalists on Thursday in Abuja that the proposed bill before the National Assembly was inconsistent with extant laws.
Attah therefore recommended that the bill, as read at the House of Representatives, be discarded as it was against the spirit of transparency and accountability.
According to him, the House of Representatives was wrongly advised on the increment because the existing law stipulated that “a mobilisation fee of 15 per cent is to enable the contractor to move to site”.
He said that another 30 per cent fee was payable after an inspection report referred to as `interim performance certificate’ was submitted.
This, he said, should be followed by a 50 per cent payment when half of the work was done and a balance of 5 per cent would be paid after completion, in line with the standard worldwide.
“From the above, it is clear that payments to contractors are in sequence to guard against abandoning projects; thus the recommendation to give up to 50 per cent fees would encourage corruption,” he said.
According to Attah, the Nigerian economy would not only suffer under the proposal but weaken the effort to reduce financial flows as there would be too many organisations withdrawing money at once.
“Take for instance 400 out of the existing Ministries, Departments and Agencies are to award contract to the tune of N500million each.
“If you mobilise each contractor with 50 per cent, you will be paying in advance N250million to each, then multiply that by 400 MDAs and what you get is a whopping N100bn removed from the treasury,” Attah said.
According to Attah, the bill also seeks the removal of the finance minister as chair of the Public Procurement Council and included national defence and security agencies in procurement processes.
“We do not have any reservations on the proposal seeking to increase transparency in the management of defence and security spending.
“There are, however, conflicts in the proposal requesting increase in mobilisation fees from 15 to 50 per cent.
“Also, the proposal to remove the minister of finance as chairman of the yet to be inaugurated National Council for Public Procurement (NCPP) was a clear violation of Finance Act,” he said.
Attah also said that the bill’s proposal of a two-year jail term for contractors that abandon projects or an option of fine was ridiculous and inconsistent with the extant law.
He said this would only provide a soft landing to offenders while encouraging corruption.
Attah said that this fourth attempt to amend the Procurement Act had failed to take into consideration the implications on the economy and the need to move Nigeria away from corruption.
He said there was need to go back to the drawing board and handle things properly so as to avert corruption in the procurement sector.
He also urged the President to constitute and inaugurate the National Council for Public Procurement as the most effective tool in fighting corruption and sustaining the change agenda. (NAN)
