Alltimepost.com Investigation By Bob MajiriOghene Etemiku
A year-long investigation has revealed new information from the Federal Government of Nigeria, indicating that the First City Monument Bank (FCMB) has been a cog in the wheel of the development of the Mbora District in Abuja, Nigeria.
Prior to Alltimepost.com investigative story on the state of the Airport Road in Abuja, titled: Ten Years After, Confusion Reigns As N19.9billion Mbora Abuja Dev Project Remains Stalled, that road was a death trap. It had no streetlights, and robbers took advantage of the unfortunate situation.
Two months after Alltimepost.com story, commuters on that road heaved a sigh of relief: streetlights were constructed on just one side of the road, and the criminals disappeared.
To get the authorities to act, Alltimepost.com wrote two letters: one to the Federal Government of Nigeria, and Sammya, the government contractor apparently responsible for the construction of the streetlights.
Our letters to Sammya and the Federal Capital Development Administration (FCDA), sought information concerning details of the N19billion contract that the Federal government of Nigeria awarded to Sammya Nig Ltd for ‘Provision of Engineering Infrastructure to Mbora District.’
In a response dated 25th November 2021, Sammya declined to offer Alltimepost.com any information on the N19billion contract awarded it by the FCDA. The company cited confidentiality issues related to the said contract and requested Alltimepost.com to approach the FCDA.
With the expiration of mandatory time as stipulated by the Freedom of Information Act 2011, Alltimepost.com went on to publish the story.
But in a letter dated 13th May 2022 with reference number FCDA/DES/CIN/44/3397/16, and signed by Engineer Musa Yahaya, the FCDA confirmed that it had indeed awarded Sammya Nig Ltd a contract for the ‘provision of Engineering Services to Mbora District’.
According to the FCDA letter to Alltimepost.com, the contract with a total cost of N19,952,798,155.76 was supposed to be ‘single contract’.
‘Upon presentation to the Bureau for Public Prosecution (BPP), for review and issuance of ‘No Objection, the BPP directed that the contract be split into two (2) phases due to budgetary constraints.
Because of this BPP requirement, the FCDA awarded Sammya Nig Ltd phase 1 of the contract worth N6,664,224,869.17 in February 2011 with a 36-month completion period. Because Sammya went to work almost immediately, the BPP approved the second phase of the FCDA contract to Sammya at a cost of N13,288,553,286.59 in October 2012.
Alltimepost.com investigation revealed that part of the reason why Airport Road had no streetlights was that they were part of the contract awarded to Sammya Nig Ltd which got stalled.
Other parts in the scope of work for the N19billion contract awarded to Sammya included the following:
(i) 36km of site clearance & Earthworks
(ii) 36km of various categories of roads,
(iii) Construction of 14 included the construction of box culverts of various types
(iv) 37km of water supply network with pipe diameter ranging from 600mm to 1,200mm
(v) 59km sewage drainage system with pipe diameter ranging from 150mm to 400mm of both concrete and extra strength PVC and 643 manholes,
(vi) Provision of 2 22/11kv injection substation, 6 15MVA power transformers and associated works
(vii) 30km telecommunication ducts network and manholes
(viii) 2242 street lighting poles and power supply cable network.
But by October 5, 2022, work on site had been stalled. Only 41% of the site clearance go done by the contractor. The contractor managed to complete a mere 25% of the earthworks it was supposed to do within the term limits of the contract.
Other areas where work on the development of the district is dragging include Culvert works (45%), Foul Sewer Line (3.9%), storm water drainage (16.7%), road works (2.3%) and water distribution (0.3%).
From Engineer Yahaya’s letter, the level of work remaining is huge. As at the time of putting this report together – October 5, 2022, there was yet 29km of site clearance & topsoil removal, 45.5km of earthworks to be processed, 35km of road works, an outstanding construction of 11 box culverts of various sizes.
Others include, 36.9km of water supply network with pipe diameter ranging from 100m, 34.22 storm water drainage system, 56.7km foul sewer, provision of 2 33.11kv injection substation, 6 15MVA power transformers, 30km telecommunications ducts network and manholes and 2242 street lighting poles and power supply cable network.
Engineer Yahaya’s letter indicated that instead of the completion date of 30th April 2022 (which has already passed), a new date, 30th of April 2023 is being considered. But completion of the Mbora project on this new date seems unlikely.
First, of the contract sum of N19, 952,798,155.76, Sammya Nig Ltd has received only N4,111,636,730.42. There is an outstanding N15billion with inadequate budgetary provisions and some encroachment on some of the Mbora land.
What appears the biggest reason for the contractor’s inability to complete the development project is the First City Monument Bank (FCMB). In the letter we received, the FCDA said that ‘the contractor, ie, Sammya Nig Ltd has been unable to access funds from the FCDA because of its failure to renew Advance Payment Guarantee (APG) with FCMB to cover part of the mobilization fee in his custody.’
Omoruyi Ebueku is a former banker. He told Alltimepost.com that Advance Payment Guarantee is when a bank takes responsibility for the transaction of a customer and gives a guarantee that its client has the capacity to make payment to its customers.
‘Most banks acting in this capacity usually earn a commission for this service to its customers/clients. Refusing clients access to funds is discretionary. In most cases even if the customer meets all the conditions that the bank sets for the customer to meet, they can withhold access to funds.
It may even be because the bank does not like the customer or his political or economic ties. There are no hard and fast rule regulating APGs’, Ebueku told Alltimepost.com.
Horeb Agu works with Sammya Nigeria Ltd. He confirmed to Alltimepost.com that FCMB indeed has refused to let Sammya Nig Ltd access to funds for the completion of the Mbora project.
In a letter dated August 29, 2022, Alltimepost.com contacted FCMB, requesting information on all (past and present APGs that the bank has had with Sammya Nig Ltd with respect to the ‘provision of Engineering works’ contract.
FCMB declined to release details of those transactions. In a letter dated September 11, 2022 and sent to Alltimepost.com from its Primrose Tower on 17a Tinubu Street, Lagos, the bank said that ‘the First City Monument Bank Limited is not a public institution contemplated under the Act’.
Section 31 of the Freedom of Information Act 2011, states and perhaps in anticipation of responses as the FCMB, defines ‘public institution’, thus:
‘Public Institution’ means any legislative, executive, judicial, administrative or advisory body of the government, including boards, bureau, committees or commissions of start: and any subsidiary body of those bodies including but not limited to committees and sub-committees which are supported in whole or in part by public fund or which expends public fund and private bodies providing public services, performing public functions or utilizing public funds.
According to information on the website of the bank, the FCMB started in 1977 as City Securities Ltd. It became licensed in 1982 as First City Merchant Bank, becoming the first local bank in Nigeria to established without government support.
Nobody knows why, but by 2001, the bank changed its name from First City Merchant Bank to First City Monument Bank, thereby becoming a ‘universal bank’. By 2004, the FCMB had private placement of shares to the tune of N7bn, followed by conversion to public liability company.
That same year the bank was listed on the Nigerian Stock Exchange. In the following year 2005, the FCMB through an initial offering raised over N16bn towards the N25bn share capital stipulated by the Central Bank of Nigeria, CBN.
Arising from its position as a public liability company, plc, FCMB acquired Cooperative Development Bank, Midas Bank and Nigerian American Bank. It added FinBank to its list of banks it had acquired, in 2012.
From just 26 branches in 2005, FCMB bank has nearly 150 branches in Nigeria today. In 2013, FCMB assumed a holding structure in accordance with the regulations set by the Central bank of Nigeria.
It became a group, the FCMB Group, a holding company for FCMB Ltd and its subsidiaries. To cap this, the FCMB (UK) in 2018 obtained a personal and business license and began operations in the United Kingdom.
Even though FCMB is privately owned, it appears to have utilized public funds, done business with the public, and engaged in transactions where public funds were involved. It has grown since 1977 from doing business with the public and fits the description by Section 31 of the FOI 2011 as a ‘public institution’.
Available options for interested parties are basically legal, basically an order of mandamus that forces the bank to disclose relevant information on why it withholds funds for the development of the Mbora district is critical in public interest.
