A 2018 report of the Office of the Auditor General of the Federation has indicted the Federal Mortgage Bank of Nigeria (FMBN) for non – execution of a N14.2 billion housing estate project for which fund was released.
This is as the Senate Committee on Public Accounts chaired by Senator Mathew Urhoghide queried the Federal Mortgage Bank to clarify the allegation.
The Senate Committee’s action was consequent upon consideration of the 2018 report from the office of the Auditor General of the Federation.
The committee demanded an explanation from Federal Mortgage Bank of Nigeria over payment of N14.2 billion for contractor for the construction of 963 units residential building called Legacy Estate without execution of the project.
In the report pending before the Committee, the Auditor General stated that contract for building of Legacy Estate was awarded at a cost of N10 billion but a total of N14. 2 billion was disbursed to the contractor between 22nd November 2012 and 29th April 2013, leaving a balance of of N4.2 billion as overpayment.
The Auditor General in the query had said,” Audit observed that the Bank awarded a contract for the construction of 963 units of residential building called Legacy Estate, with all the facilities and services of a modern urban setting at a contract price of N10,000,000,000.00.
“However, a total of N 14,281,749,370.71 was disbursed to the contractor between 22nd November 2012 and 29th April 2013, thereby resulting in an overpayment of N 4,281,749,370.71.
“No reason was provided for the additional payment; neither was any evidence of contract variation presented for audit. Audit further observed, from physical inspection of the site on 7th July 2017, that the project had been abandoned since 2014, some months after payments were made, with less than 10% of work done.
Yet the bank did not only pay the full contract sum, the contractor was overpaid to the tune of N 4,281,749,370.71, without any justification for the over-payment.”
The Managing Director of FMBN, Ahmed Musa Dangiwa in his written response explained that,” the contract was conceptualized in 2012 by previous Management and present Management, in its efforts to recover the Bank’s asset expended on the project, engaged all stakeholders.
“Our investigation report later sent to Honorable Minister for Works , Power and Housing , as well as the board who later directed us to send to DSS, EFCC, ICPC and SPIP .
“While the Economic and Financial Crimes Commission and Independent Corrupt Practices and other Related Offences Commission (ICPC) were to assist in investigating into the loss of funds on the Good luck Jonathan Legacy Estate Project to enable bank recover its money .
“The then, Special Presidential Investigation Panel for Recovery of Public Property (SPIP) was also to investigate and recover sum of N11 billion from Messr. Good Earth Power Nigeria Limited (the developer).
“Nord Consult was engaged to file an action for the recovery of the funds guarantee by GT bank on the Advance payment Guarantee it issued , for which the bank appointed Intel Cost Associate Limited to carry out the current valuation of the project in order to serve as expert witness in the suit filed against GT Bank.