How Buhari Ran PTF, Missing N500m – Newswatch [2000]

How Buhari Ran PTF, Missing N500m – Newswatch

How Buhari Ran PTF, Missing N500m – Newswatch

[published in March 2000]

Interim Management Committee on PTF raises questions over some of the

transactions it considers irregular during the tenure of retired

Major-General Muhammadu Buhari

Should Buhari Sack Inspector General Of Police?

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By Jossy Nkwocha

 

How did N500 million belonging to the Petroleum Trust Fund, PTF,

disappear mysteriously? That is one of the questions being raised in

the preliminary report of the Interim Management Committee, IMC-PTF,

set up by President Olusegun Obasanjo to wind-down the activities of

the organisation.

 

Newswatch gathered that the money was put in a bank by the erstwhile

management led by Muhammadu Buhari, retired major-general and former

head of state. But when the IMC-PTF took over the operations of the

body, it discovered that the money had been withdrawn by unidentified

persons.

 

Haroun Adamu, executive chairman of IMF-PTF who confirmed the story,

said: “They took in N500 million but by the time we came in, there was

no one kobo from the deposit.” According to Newswatch investigations,

both the bank and Buhari were dragged before President Obasanjo who

insisted that the money must be recovered. Adamu told Newswatch in

Abuja a fortnight ago that the bank has now agreed to pay back the

money in seven years but his committee insists that the money should be

refunded as soon as possible. Adamu neither named of the bank nor say

whether or not Buhari was personally involved in the matter.

 

The mysterious withdrawal of the money is one of the allegations

levelled against the Buhari-led past administration of PTF by the IMC

which seems to have put the four-year tenure of Buhari as the executive

chairman of PTF under intensive searchlight. Although Adamu insists

that Buhari is not under probe, he said that a technical

audit/verification exercise being carried out by the committee shows

that a lot of ugly things had taken place under the acclaimed

no-nonsense retired army general.

 

The committee is asking questions about several contracts worth N207

billion awarded by PTF under Buhari. It is also raising serious doubts

over different payments totalling N135.59 billion made by the Fund for

various projects, leaving a debt burden of more than N70 billion owed

numerous contractors, consultants, manufacturers, publishers and

suppliers who are now waging a big war against the IMC-PTF.

 

Some of the other unwholesome things dug up by the IMC include the

“unholy” alliance that existed between the Buhari led PTF and

Afri-Project Consortium, APC, a private consultancy company, which

literally and exclusively ran the affairs of the fund, and the alleged

over-inflation of contract sums such as the one involving the N650

million extension of the PTF headquarters in Abuja; IMC is also

alledging serious contractual anomaly in the N800 million PTF staff

housing estate; importation of expired drugs especially the N28 billion

HIV/AIDS screening and confirmation kits as well as the mysterious

disappearance of the N500 million.

 

The missing money, in fact, exposed the kind of “unholy” business

relationship that existed between PTF of the Buhari era and APC led by

late Salihijo Ahmad, a 42-year old businessman from Adamawa State.

Newswatch learnt that the APC consultants virtually managed PTF. In

fact, a report prepared by the IMC showed that APC was really in

charge, not Buhari.

 

“When the IMC took over the management of PTF, there were no contract

documents, drawings, or specifications relating to committed projects

within the premises of PTF headquarters. All that were available were

lists of projects and programmes in the following sectors: roads and

road transportation, water supply, education, food supply, health and

other projects. The client as is mandatory in all contractual

relationships, is expected to have in his possession, the client’s

copies of all documents relating to projects on which payments have

been made. In PTF, this was not so,” the report stated.

 

It went further to say that “all documents (including the mandatory

client’s copies) were in possession of Afri-Project Consortium, APC,

who were appointed as the sole management consultants to PTF.” APC was

also said to be responsible for the corporate development and

recruitment  of staff for PTF.

 

The IMC report said that PTF in its operation was not  functioning as a

government agency   in the real sense. “APC was actually the real PTF

and yet it was a private company,” it lamented.

 

One area of the PTF-APC alliance that worried the Adamu-led committee

was the fact that Buhari delegated his powers as executive chairman of

PTF to the APC. The IMC also discovered that the “power of the

engineer” which normally should reside with the client (PTF) was

delegated to APC through a letter. “With this power of the engineer,

APC was able to award contracts and  vary same without any reference to

PTF,” the IMC report stated.

 

Newswatch gathered that PTF had about 620 consultancy firms reported to

the APC, which had the sole responsibility for the issuance of

certificates for payments by PTF. Indeed, too much power and

responsibilities were said to have been given to the APC. Adamu told

Newswatch that the situation created a scenario where proper procedures

were not followed in the award of contracts. Some of the contracts, it

was gathered, were inflated by more than 100 percent. In many cases, no

bidding was taken. People were just given the contracts and contract

sums slapped on unilaterally.

 

When the Adamu-led committee was set up, the members visited Ahmad, the

managing consultant of APC, in his office to look into the issues. He

promised to make all records available to the committee and gave Adamu

an appointment for Monday July 5. Before he could keep the appointment,

he suddenly collapsed and died that day.

 

Official sources within the IMC informed Newswatch that the committee

was therefore determined to take full control of the activities of PTF

from the APC. It wrote a letter to the sole consultants demanding the

client’s copies of all documents relating to all projects and

programmes of PTF. It also withdrew the “power of the engineer”

delegated to thefirm by Buhari.

 

In response , APC sent to the IMC a letter of resignation as management

consultants to PTF. It gave a three-month notice expiring on November

15, 1999 during which all PTF project documents in the company’s

possession would be physically handed over to the IMC. The IMC is now

in full control of PTF.

 

The technical audit/verification exercise embarked upon by the

committee has shown that “projects were abandoned at random and

completion rates were no higher than 30 percent with contractors

holding on to vast  sums of advance payments.” Newswatch learnt that

PTF had a multi-layer of consultants (about 620) who were paid hundreds

of millions of naira as consultancy fees. It was also gathered that

there was no performance evaluation criteria for any of the management

consultants including APC.

 

“What has been discovered is that the consultants were working at their

own pace and space and as long as APC did not raise any query,

everything was alright,” the IMC source said, adding, “in spite of the

array of consultants at different layers, the supervision of projects

was very defective, resulting in low performance rating on projects.”

 

APC was indeed literally incharge from project conception to execution,

thus virtually control of the billions of naira which the late General

Sani Abacha government pumped into the PTF. The fund was originally

meant to rehabilitate social infrastructure in all the nooks and

crannies of the country and as at December 1998, PTF had received

N144.51 billion from the federal government.

 

As a confirmation that APC was really making payments on behalf of PTF,

Newswatch investigation showed that in 1995, PTF lodged N1 billion in

Commercial Bank Credit Lynonais, Elephant House, Marina, branch, Lagos,

but it was APC officials who made withdrawals from the account for

various payments. By the end of 1997, only N200 million was remaining

in the account.

 

Since Ahmad died, APC has virtually died with him, moreso, since the

new Adamu-led committee took away the PTF job from them. When Newswatch

visited their Abuja office last week for comments on the allegations

against them, the place was virtually empty. No official of the company

was ready to speak on anything relating to PTF.

 

But before he died, Ahmad had admitted Newswatch in an interview

published by the magazine in the April 19, 1999 edition, that APC was,

indeed, the main force behind PTF operations. In fact, he said it was

APC, which wrote the proposal that defined the mandate of PTF.

 

Said he: “By that definition, we were now able to postulate or

interpolate and be able to identify  the assignment of the PTF, the

resources, both human and material that would enable them implement

their own projects successfully and effectively.”  “We came out with an

indication of what we think their institutional structure should look

like and proposed some operational policies and guidelines which would

enable them effectively implement their own projects to the end.”

 

The APC chief stated in the interview that in the implementation

strategy, his company also conceptualised the engineering project cycle

adopted by PTF. He said it was APC that also suggested the criteria and

procedure for the selection and appointment of PTF consultants,

contractors and suppliers. He said APC, equally conceptualised the

monitoring mechanism adopted by PTF for its projects.

 

Some analysts believe that Buhari was not effective enough in running

the affairs of PTF, especially judging from the fact that he ceded much

of his executive powers to a private company which decided the fate of

the organisation and the fate of Nigerians at that time. Adamu told

Newswatch that it might have been Buhari’s own style of management, but

it may not be acceptable to some management experts.

 

As a result of Buhari’s alleged poor handling of PTF projects and

finances, some PTF officials believe that the N135 billion that was

disbursed out of the PTF’s total income of N146 billion was squandered.

“It is unfortunate that such a colossal sum of money was squandered. It

wasn’t used properly,” the source told Newswatch.

 

But Buhari and his team have tried to explain how they spent the N135

billion. In the PTF 1998 Annual Report and Accounts, they stated that

N60,029,375,000 (N60.03 billion) was spent on the rehabilitation of

13,500 kilometre roads under the national highway and urban roads

rehabilitation programme. Buhari said the programme was able to attain

80 percent completion by December 1998.

 

The health sector, he said, gulped N17,433,879,000 (N17.43 billion).

This involved the drug revolving scheme, the screening and diagnostic

kits for HIV/AIDS control, the research for the development. of

Niprison, a drug for the treatment of sickle cell anaemia as well as

the rehabilitation of several health institutions across the country.

 

But Adamu told Newswatch that most of the drugs supplied to PTF expired

because they had very short shelf life. He was particularly unhappy

with the HIV/AIDS kits on which, N28 billion was spent. He said his

committee had visited Israel to discuss with the manufacturers on how

to solve the problem.

 

Last July, a media-based HIV/AIDS group, Journalists Against AIDS,

JAAIDS, raised the alarm that the purchase of the kits was a “colossal

waste” and “a scandalous squandering of scarce resources that would

otherwise have benefited 4.5 million Nigerians living with HIV/AIDS.”

 

In a statement signed by Omololu Falabi, the project co-ordinator,

JAAIDS, said: “Our discovery is that not only is the amount claimed to

have been spent on the kits in excess of the requirement of all

hospitals and medical institutions in Nigeria, the shocking fact is

that more than half of the kits expired in June this year (1999) while

the rest will expire by the end of August.”

 

The Nigerian Guild of Medical Directors, NGMD, had also said that fake

and expired drugs were supplied to PTF.  Rowland Ogbonna, secretary of

NGMD, in September last year called on the federal government to

withdraw all drugs supplied by the PTF from hospitals in the country.

Briefing the press on Saturday, September 11, 1999, he said: “Unless

the federal government immediately withdraws all the PTF supplied

drugs, and do a reappraisal of their relevance, Nigerians are at a high

risk of consuming expired and fake drugs.

 

Ogbonna further stated that “PTF deliberately sidelined qualified

pharmacists on its committee for the importation of drugs and went

ahead to hand over same drugs to businessmen and contractors who have

been selling them without expert advice.” In Kogi State, Governor

Abubakar Audu, said most of the drugs supplied to his state by PTF were

expired. He has set up a panel to investigate the scandal.

 

But on Wednesday, February 16, a body known as the PTF Consultants and

Contractors Forum submitted a memorandum to Chuba Okadigbo, senate

president denying the involvement in the purchase of the expired drugs

denying the involvement in the purchase of the expired drugs. In the

12-page document signed by Ibrahim Mahmood and Femi Aluko as

co-chairmen, the body insisted that its members never supplied any

expired drugs or equipment to PTF. “The fact of the matter is that no

drugs or seeds were ever accepted for payment without a quality control

certification from NAFDAC and the National Seeds Service which are the

federal government agencies that have the statutory resposibility to

certify locally manufactured and imported drugs and seeds

respectively”, it said.

 

The forum argued that if any of the drugs or seeds had expired, it was

due to the inaction of the Adamu-led IMC in directing the distribution

of the items. Mahmood told Newswatch in Kaduna last week that the IMC

was only giving a bad name to their members so as not to pay them their

legitimate claims.

 

According to the PTF 1998 Annual Report and Accounts, five other

sectors that combined to eat up huge sums of PTF money are education,

water supply, food supply, security, the federal capital territory,

FCT, and “other projects.” Education gulped N6,829,614,000 (N6.8

billion),  water supply took N9,053,774,000 (N9.1 billion), food supply

got N7,590,629,000 (N7.6 billion), security consumed N27,284,000,000

N27.29 billion) while FCT got N2,043,278,000 (N2.1 billion). The report

said disbursements made in the security sector and the FCT were direct

transfers to the task force on armed forces and police PTF and the FCT

respectively.

 

In the “other projects” sector, one of the projects that is causing

worries among IMC-PTF members is the Abbajaye housing estate taken over

by Buhari. It has 32 housing units made up of eight units for grade

level 15 officers; eight units for level 13-14 officers and 16 units

for grade level 10-12 officers. As at December 1998, Buhari had paid

the total sum of N479,.325,398.00 on the project which is earmarked to

cost about N800 million on completion.

 

Two things are bothering the IMC-PTF on the housing estate issue.

Firstly, the cost is said to be too high. The new consultants

commissioned to assess the project said it cannot cost more than N400

to N500 million, said Adamu. Secondly, the estate was originally being

developed by Alhaji Abba Jaye and Sons Limited, a private developer. At

a point, PTF took it over, demolished the man’s own structures and

started afresh to put up very beautiful buildings on the land. PTF

agreed to pay N4.5 million per annum to the man but after 12 years, the

estate would revert back to Abba Jaye, the original owner.

 

Adamu told Newswatch that he found such an agreement quite unwholesome.

He prefers paying the owner his due compensation while PTF takes over

the estate completely. He has succeeded in getting the authorities to

revoke the ownership of the land in favour of PTF.

 

Another controversial project is the extension to the PTF headquarters

in Abuja whose contract value is said to be N650 million. Adamu said

their technical audit shows that the building would cost between N300

and N400 million.

 

Even in the food supply sector, Adamu said the farm power machinery

rehabilitation programme in which Buhari claimed to have repaired 786

tractors, 29 heavy-duty equipment and 2,744 units of implements was

badly managed. According to him, most of the commissioners of

agriculture in different states of the federation complained that the

programme only provided an opportunity for some people to loot the PTF

money. The farm equipment was hardly repaired.

 

Another allegation being levelled against Buhari is that he

marginalised some states heavily in the sharing of PTF projects.  The

situations in Imo and Bayelsa states were said to have shocked the

project verification teams. Buhari was said to have concentrated most

of the heavy projects in Kaduna, Katsina, Kano, Niger, Edo and Adamawa

states. Adamu told Newswatch that his committee had noticed the gross

imbalances in the way the PTF projects were shared but regretted that

it cannot do much now to redress the situation because the committee

does not have the mandate to start new projects.

 

Newswatch made efforts in the last two weeks to speak with Buhari on

the many allegations levelled against him. When our reporter met him in

Kaduna, he declined to comment on the allegations, saying he had spoken

on them sometime ago in Sokoto but his comments were grossly twisted by

the press.

 

Last week, Newswatch also faxed a letter to him detailing all the

allegations against him.  “We have been trying since last week to get

you to respond to the allegations. Because we would not like to publish

a one-sided story, we shall be pleased if you could respond to the

allegations and fax same to us on or before 6 p.m. tomorrow, February

29, 2000,” the letter stated.  But upto the time we went to press last

week, Buhari did not respond to the allegations. But in a recent

interview in TheWeek magazine, Buhari had insisted that allegations of

corruption against him were false. “My integrity is intact,” he said

and challenged anybody who can prove that he was corrupt as PTF

executive chairman to take the matter to either the Christopher Kolade

panel on review of contracts or soon to be established panel on

corruption. In another interview, he contended that the press had not

appreciated the magnitude of what he did for Nigerians in PTF.

 

Some of his associates told Newswatch in Kaduna that Adamu was only

being vindictive because he was one of the persons detained by Buhari

in 1994 when he (Buhari) was head of state. Adamu denied this charge in

an interview with Newswatch, contending that he and Buhari are friends.

Adamu insisted that he was not probing Buhari’s tenure at PTF.

According to him, the IMC is only carrying out the terms of reference

given to it by President Obasanjo. The seven-point terms of reference

are: to ascertain all monies accruing and received by PTF from the

inception of the fund to date; to ascertain the state of all bank

accounts operated by PTF for the whole of the period of its existence

to date; to produce an up-to-date comprehensive projects and programmes

report including location, coverage and whether performed, performing

or abandoned; and to produce a final report of assets and liabilities

as well as to examine the administrative structure and the cost

effectiveness of PTF projects and services.

 

Other items on the terms of reference include the review all contracts

and agreements entered into by PTF; and re-negotiation of cost of

projects/programmes and services to reflect current financial realities

of PTF. The seventh item states that “no new projects should be

undertaken during the committee’s tenure except under the directive of

the president.””Adamu told Newswatch that after their preliminary

investigations, they will pass on their report and recommendations to

president Obasanjo who will institute a debt recovery panel to recover

all excess monies paid to the PTF contractors and consultants under

Buhari.

 

But Adamu and his IMC are now being accused of corruption. Each member

of the committee has received a furniture allowance of N5 million. Some

PTF officials are also being accused of extorting money from

contractors, and consultants before they are paid their claims. Mahmood

told Newswatch that only persons who are able to pay the bribes are

paid their claims.

 

Adamu told Newswatch that the N5 million allowance was to make the

members comfortable and prevent them from being corrupted by

contractors whose contracts and projects are being reviewed. He said

the allowance is not too much for a committee handling an investment of

N250 billion.  He also challenged the contractors to name any of his

officials who are extorting money from them so that he can discipline

such an official. He, says that such claims by contractors amount to

pure blackmail meant discredit or distract his committee from the job

it has been asked to do in PTF. The last, it appears has not been heard

about the PTF controversy.

Additional reports by Ibrahim Modibbo, Tunde, Abuja and Janet Mba-Afolabi

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