How Buhari ran PTF, missing N500m – Newswatch

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[Courtesy 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

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body, it discovered that the money had been withdrawn by unidentified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