Atiku Abubakar, Panama Papers and Lagos-Calabar superhighway
A Policy Paper by Independent Media and Policy Initiative
In a criminal court in Panama, the trial of the first batch of 27 individuals accused of money laundering related to the global “Panama Papers” revelations began on Monday, the 8th of April, 2024.
The owners of the Mossack-Fonseca legal business, which was central to the major document leak in 2016, are among those on trial.
A compilation of 11 million confidential financial records from the Panama Papers shows how some of the wealthiest people on the planet conceal their wealth.
The revelations had far-reaching effects, leading to the resignation of Iceland’s prime minister and heightened international scrutiny of Russian President Vladimir Putin, Chinese legislators, and the governments of Argentina and Ukraine.
At number 68 on the list of exposed former top government officials in the Panama Papers is Atiku Abubakar, former Vice President of Nigeria. Mossack Fonseca is accused by US federal prosecutors of plotting to break US laws to protect its clients’ riches and hide taxes that should have been paid to the IRS.
They claimed that the plan, which began around 2000, featured shell corporations and fictitious foundations in the British Virgin Islands, Panama, and Hong Kong.
Interestingly, while investigations are reportedly ongoing on the next batch of individuals listed in the Panama Papers which may include the Waziri Adamawa, the two-time presidential candidate of the People’s Democratic Party (PDP) is waging his own war of attrition, demanding transparency in the procurement process of the economically strategic Lagos-Calabar coastal road.
We have observed the back and forth between Waziri Abubakar and the Federal Minister of Works, Senator Dave Umahi, in this curious public activism initiated by the former Vice-President.
Our concern, however, is the deliberate obfuscation that is unfortunately being clothed as grounds to traduce the economic and social basis of the commencement of the coastal road.
We consider this an unhealthy, diversionary, and deliberate manoeuvre to discredit the whole essence of the Lagos-Calabar coastal project.
Without a doubt, the Lagos-Calabar Coastal Highway, as it is also called, is a grand project. It is designed to connect nine states and regions at both the national and international levels, serving as a vital link between South West, South East, South-South, and other regions of the country. It will also integrate with existing federal roads, promoting economic and social development across the country in addition to the integration at the national level for Southwest, Southeast, and South-South, including the Niger Delta region.
It will connect with Federal Roads going from Badagry in Lagos to Sokoto. From Warri to Kaduna, from Port Harcourt to Kano/Maiduguri, and from Calabar to Maiduguri. Starting at Victoria Island near Eko Atlantic City, the Lagos-Calabar Coastal Highway will pass through the Lekki Coastal Road, Lekki Free Trade Zone, and the Dangote Refinery, connecting Ogun, Ondo, Delta, Edo, and reaching Calabar.
The Lagos-Calabar Coastal Road is a 700km highway that would be constructed in phases, with the completed sections being opened for use and toll collection. The project, described as ambitious, will connect the Lagos-Badagry Expressway, the Fourth Mainland Bridge, Lekki Deep Sea Port Road, and various points in Northern Nigeria through the Ogoja-Ikom axis.
It is expected to stimulate tourism and include industrial clusters, such as hotels, factories, housing estates, and other amenities, including rail lines running in the middle of the main carriageways.
According to Umahi, the road is to be built with 11 inch thick concrete and 20-millimetre reinforcement. The innovative use of concrete and steel reinforcement will improve local cement manufacturing and boost steel production from Ajaokuta. It will also take advantage of Nigeria’s abundant bitumen resources. It is acknowledged that a combination of construction methods, including pile-supported decks, sand filling, and retaining walls, will be employed to overcome the challenges of such project since it will cut through mangroves, mashy land, flood plains, and various soil types.
Indeed, we agree with analysts and pundits who had submitted that the Lagos-Calabar Coastal Highway is a groundbreaking project and ranked as the first of its kind in Africa.
However, Waziri Abubakar holds a huge grudge against this project in spite of immense benefits of the project. He has continued to express his grouses, taking advantage of the mass media through press statements.
We have reviewed each of these statements and the various responses to them by the Minister of Works. Coming from this, we note that the statements are manifestations of errors of judgment, deliberate misrepresentation and a lack of contextual understanding of due processes. We clearly discern obvious confusion with issues pertaining to the eras of former Presidents Goodluck Jonathan and Muhammadu Buhari on the Coastal Rail, which was misrepresented as those of the Coastal Highway. There obviously has been a clear indication of not paying attention to details of the project as presently conceived.
Be that as it may, because we subscribe to the totality of the social and economic essence of the Coastal Road and Rail projects, and desire to interrogate any form of obscuration by any of the parties involved in the public spat as it had turned out, with intent at resolving the contentious issues being bandied about, we decided to review real issues and sentiments around the project that is being controverted by Waziri Abubakar.
Starting with the statements issued in the name of Waziri Abubakar Atiku, we distilled his expressed resentments into three broad spectra. First is that the award of the contract for the construction of the Coastal Road did not go through the required public procurement processes as outlined in the Public Procurement Act 2007 and, his insistence to the effect that the essence of a competitive bidding will ensure that Nigerians can get the best value for money.
According to the Waziri: “It is so that you can compare prices and pick the company that can afford …the project.” The Waziri has a point here. But apparently, because of a lack of attention to details, he overlooked the implication of the preamble to Part IV of the Act in Section 16 (1) which asserts that: “Subject to any exemption allowed by this Act, all public procurement shall be conducted by open competitive bidding; in a manner which is transparent, timely, equitable for ensuring accountability and conformity with the Act and regulation deriving there from.” Waziri Abubakar decidedly ignored the implication of Section 16 (1) and determinedly made Section 16 (c) and (d) the substance of his argument to score his point. Undeniably, the Act provides for two broad exemptions, one as stated in Section 40 (1a) which notes that: “Subject to the approval by the Bureau, a procuring entity may for reasons of economy and efficiency engage in procurement by means of restricted tendering if: The goods, works or services are available only from a limited number of suppliers or contractors.
The Federal Ministry of Work, which is the procuring entity, depended on this sub section to award the contract to Hitech Construction Company, Nigeria. His attention must have been eventually directed to Section 40 (2a), which states that: “Where a procurement entity engages in restricted tendering on the basis that the goods, works and services are available only from a limited number of suppliers of contractors, it shall invite tender from all the suppliers and contractors who can provide the goods, works, or service. If there was only one capable contractor to deliver on the work.”
In averting his mind to it in a subsequent press release he issued in response to the Minister of Works reference to the section, he would, rather, the bid was opened to companies outside the country as he insists that: “It is wrong for him (Minister of Works) to have concluded that only Hitech could handle this project when such a project has been done by other reputable firms in the United States, China and South Africa.” To this extent, Waziri Abubakar did not also reckon with Section 34 (1) of the same Act which concludes that: “A procuring entity may grant a margin of preference in the evaluation of tender, when comparing tenders from domestic bidders with those from foreign bidders or when comparing tenders from domestic suppliers offering goods manufactured locally with those offering goods manufactured abroad.”
This should be taken together with Section 34 (2) which asserts that: “Where a procuring entity intends to allow domestic preferences, the biding documents shall clearly indicate any preference to be granted to domestic suppliers and contractors and the information required to establish the eligibility of a bid for such preference.” The implication of this subsection, speaks, ab-initio, to the Federal Government’s preference for awarding contracts to qualified domestic companies.
Though Waziri Abubakar had raged in his press statements that the only reason Hitech got the job was because of its owner, Gilbert Chagoury’s relationship with President Bola Ahmed Tinubu, this, in our consideration, is rather pedestrian. Our checks show that Chagoury, who is a Nigerian by birth, has friends in very high places including Waziri Abubakar himself who was one of his guests on 7th of July, 2007, when he had a wedding organized in Monaco.
The Chagoury wedding attracted former military Heads of State, Generals Ibrahim Babangida and Abubakar Abdulsalami, head of the interim government, and late Chief Ernest Shonekan
Also in attendance were the then former Lagos governor, Bola Tinubu, and former Vice President Atiku Abubakar himself, who reportedly flew in from Dubai. Former Governor of Delta State James Ibori was also in attendance.
With this array of friends, if the rule is not to award Federal Government contracts to an individual because of his link to people of influence, it will translate to Chagoury going hungry because of the nature of his coterie of friends.
We do not think the Public Procurement Act harbours such intention.
To establish Hitech’s fit into the capabilities to deliver on the coastal road contract, we made both discreet and open enquiries on the company’s credentials and contracts portfolio and records. We can assert, based on evidence garnered, that Hitech may pass as the only Nigerian company able to construct the coastal road as conceived. The only other company that may claim near capacity is the construction behemoth, Julius Berger Plc. But over the years, Hitech has shown a specialization in shoreline and coastal roads construction than Julius Berger. A typical reference in this regard was the Bar Beach shoreline contract awarded to the two companies at different times and how they performed therein.
In June 2003, approval was given by President Olusegun Obasanjo for a permanent solution to the menace of the Atlantic Ocean, which threatened at that time to engulf major parts of Victoria Island, Lagos. Funds were released to Julius Berger and other contractors to put in place a permanent structure to stop the sea’s advance, which had ebbed major portions of the Ahmadu Bello Way. Three years later, by April 2006, the evaluation of the work done by Julius Berger showed that nothing had changed at Bar Beach. Analysts, at that time, submitted that: “Unless the ongoing restoration of the shore line of the depleted Bar Beach in Victoria Island, Lagos is quickly completed, the likelihood of stopping what may be another Tsunami disaster, akin to the one that occurred in Asia in a not too long ago, is very slim.”
In addition, the analysts averred that already, the ocean had claimed one lane of the ever busy Ahmadu Bello Way, forcing motorists from both sides to make do with the single lane, which was also not spared of threats by the ocean.
In 2009, the contract for the Bar Beach beach line management was awarded to Hitech Construction Company. Construction experts have since submitted that handing over the project to Hitech became a strategic move for Nigeria because not only did the company stopped the flooding along the axis, it also reclaimed a lot of land and has turned the area into another Dubai in the name of our own, Atlantic City. Besides, Hitech has a strong presence in countries of the West African region. In Togo, the company is responsible for the rehabilitation of the National Route NR 14 – from Sokodé to the Benin border, that country’s 85 kilometres coastal road. In Benin Republic, Hitech is constructing the 12.5 kilometres Cotonou Fisheries Road Development Project, another coastal road.
As to the accusation concerning how the Lagos-Calabar Coastal Road is shrouded in secrecy, our independent investigation shows that before the contract was eventually awarded to Hitech by the Federal Ministry of Works, officials of the company met with the Ministry’s management team at various times. One of such meetings was held on 25th September, 2023, when Hitech engineers met with the Minister of Works and engineers in the Ministry to review designs. At another meeting in October 2023, the construction agreement was ratified.
The second issue that Waziri Abubakar had raged about, has to do with the cost of the project. The former Vice President, had variously controverted possible cost of constructing what the Minister of Works had insisted is a 10-lane express road which would start from Victoria Island near Eko Atlantic City and go through Lekki Coastal Road, Lekki Free Trade Zone, Dangote Refinery, and then link Ogun, Ondo, Delta, Edo states up to Calabar,Cross Rivers state.
According to Umahi, the highway will be delivered at a cost of N4.329 billion per kilometre of standard gauge reinforced concrete across 10 lanes, with a lifespan of between 50 – 100 years. In response to the cost as announced by Umahi, Waziri Abubakar declared that the tentative total cost of N14trillion was the equivalent of the total budget of all the 36 states which is about N15.91 trillion and that it was outrageous.
Waziri Abubakar, despite his apparent show of outrage over the cost as announced by Umahi, is yet to offer a possible real cost of the project which he has sensationally described as “highway to fraud and waste.” But is the costing truly a reflection of fraud? Our international comparative analysis of average road construction cost per kilometre shows otherwise.
We are of the opinion that Waziri Abubakar merely desires to scapegoat the project and eventually discredit the positive public image accruable to President Tinubu from the implementation of the project.
We note that there is no unified standard pricing template for the cost of building a kilometre of road anywhere in the world. The realities of road building have much to do with a number of variables: location, terrain, type of construction, number of lanes, lane width, surface durability, and the number of bridges, to name a few. Yet, for the purpose of engagement, we reviewed some cost estimates in some other countries to establish the context of fraud or otherwise that Waziri Abubakar is trying to throw up. To build a 2-lane road of 12 metres wide of each lane with no bridges in states of North Eastern United States of America is $3.34m per km (when converted to Naira using the N1200/$ adopted by Umahi, it comes to N4.08bn per km) while same 2-lane road in South Eastern USA with no bridges is $3.78m per km (N4.53bn per km). According to the Texas Department of Transportation, the average cost of building a concrete road in rural areas is around $2.5m per mile, while in urban areas it can cost upwards of $5m per mile.
In California, the estimated cost of building a concrete road ranges from $3m to $6m per mile, depending on location and other factors.
In Australia, average road project costs were around $5.1m (N6.12bn) per lane kilometre in 2017. But in Bangladesh, according to the World Bank, the estimated cost of construction is $6.6m (N7.92bn) per kilometre for the Rangpur-Hatikumrul highway, $7m (N8.4bn) per kilometre for Dhaka-Sylhet highway, $11.9m (N14.28 bn) per kilometre for Dhaka-Mawa highway. This underscores cost differentials in road construction because of peculiarities in terrains.
These figures are far higher than the N4.329bn per kilometre of 10 lanes of Coastal Road with very peculiar terrains that Umahi says Hitech has commenced construction of.
For clarity, a technical analysis of the features of the road will suffice: The Lagos-Calabar Coastal Road is designed to have 10 lanes with a total pavement of 59.2 metres with 100 metres corridor. Of this corridor, there will be five lanes on the right and five lanes on the left. This comes with a 25-metre train track. It is also commendable that the Works Minister prudently reduced the cost of the legacy design of the four-lane Lagos-Calabar highway of the Niger Delta Development Commission (NDDC) from N8.52bn/km to N4.329bn/km.
On appropriation, we note that the former Vice President referenced the N500m captured in the name of the project in the 2024 budget but finds fault with the approval of N1.06 trn by the Federal Executive Council (FEC) for the take-off of the project. Again, we believe that Waziri Abubakar deliberately chose to ignore the convention of anticipatory approval by which FEC can increase funds allocated to a budgetary item for exigency purpose with intent at submitting same to the legislative arm for consideration and approval.
Our general submission is that Waziri Abubakar’s vaunted interrogation of the award process of the Coastal Road to Hitech Construction Company lacks substance and rational logic. It smacks of public exhibitionism to showcase his personal alternative reality.
We commend President Tinubu and his Works Minister for their prudence in reducing the cost outlay for the construction of the Coastal Road. We are also impressed with the speed and pace of construction since the Federal Government awarded the contract to Hitech Construction Company Limited, which has so far completed 1.3 kilometres of the required filling.
Signed
Chief Niyi Akinsiju
Chairman
Independent Media and Policy Initiative
17th April, 20