The Empowerment for Unemployed Youth has petitioned the Economic and Financial Crime Commission (EFCC) over the massive fraud, financial crimes, and economic sabotage perpetrated against Nigeria by General Electric International, Rockson Engineering Nigeria Ltd and their associates resulting in the crippling of the power sector
Addressing the EFCC official today in Abuja, Solomon Adodo who spoke on behalf of several Civil Society Organisations that made up the Empowerment for Unemployed Youth, he called on the EFCC to cause a detailed investigation of the facts contained in their petition and invite the key players to find out why they have continued to sabotage the Federal Government’s efforts and investments in the power sector.
Excerpt is the full text of the petition submitted to the EFCC:
26th SEPTEMBER, 2018.
THE AG. CHAIRMAN,
ECONOMIC AND FINANCIAL CRIMES COMMISSION,
EFCC HEAD OFFICE,
ABUJA.
MASSIVE FRAUD, FINANCIAL CRIMES, AND ECONOMIC SABOTAGE PERPETRATED AGAINST NIGERIA BY GENERAL ELECTRIC INTERNATIONAL, ROCKSON ENGINEERING NIGERIA LTD AND THEIR ASSOCIATES RESULTING IN THE CRIPPLING OF THE POWER SECTOR
The Empowerment for Unemployed Youth Initiative is a body duly registered with the Corporate Affairs Commission to champion the cause of the unemployed youth vis-à-vis the factors influencing unemployment alongside our sister Civil Society Organizations are deeply pained at the deafening silence accorded the House of Representatives Report of Investigation into the huge sums of money spent on power generation, transmission and distribution between June 1999 and May 2007 without commensurate result.
More worrying and utterly disconcerting is the fact that most of the companies that played key roles and/or were indicted by the said Report chronicling the grandest heist against the Nigerian economy and her good people have resurfaced under new consortiums to continue their spree of unfettered looting and defrauding of the Nigerian government while posing as Nigeria's technology partners in the power sector.
It is quite saddening to note that General Electric International and her Nigerian business partner Rockson Engineering Nigeria Ltd (which now hides under the nest of a corruptly contrived consortium with GE) have chosen the inglorious path of continuing in leading this unholy pack of looters having bribed their way out of the appropriate sanctions that should ordinarily have been visited on them for their conspicuous roles in the fraud and deliberate sabotage committed against Nigeria as revealed by the House Report which specifically recommended that General Electric, Rockson Engineering and their thieving cronies be subjected to thorough criminal investigation and prosecution.
We are further disenchanted at the fact that General Electric and Rockson Engineering still continue to bleed Nigeria of direly needed funds through highly over-inflated contracts skewed in a manner that they are doomed to fail such that the duo can maintain Nigeria as a feasting ground through a never ending circle of fraudulent activities that stand to Nigeria's development with negative economic consequences that further exacerbate the unemployment situation.
It is therefore highly imperative that the Economic and Financial Crimes Commission expedite action to halt this vociferous decimation of our economy while hounding the individuals behind these crimes to jail to serve as deterrent to other individuals or entities. Indeed, the avowed stand of the President MuhammaduBuhari led administration not only to fight corruption and economic crimes to a standstill but also to right the compounded wrongs of many years perpetrated against the Nigerian nation can not be shoved aside. To this extent this General Electric/Rockson Engineering Consortium fraud presents a clear litmus test and the EFCC is hereby called upon to do the needful.
The following incontrovertible facts should further help the EFCC in doing justice to this matter. From 1999 when Nigeria returned to democratic governance to date, the Federal Government has invested well over $20 billion to ensure that there is stable power supply but in spite of this huge investment, the Nigerian power situation continues to wobble due largely to the deliberate activities of GE and its conspirators who have sabotaged the efforts of the Federal Government.
As a starting point, during the administration of President OlusegunObasanjo, GCFR, between 2003 and 2007, the Federal Government of Nigeria came up with an intervention program in the power sector to improve generation with investments in a number of new gas to power projects. For inexplicable and unjustifiable reasons, the projects were awarded without any bid and in flagrant breach of relevant procurement laws and due process.
As later events have revealed, especially after these contracts became public knowledge, these contracts were awarded at outrageous and hyper-inflated sums without appropriate and requisite feasibility studies underpinning them or even post contract supervision to ensure they were executed let alone being executed efficiently. Partly, because GE promised to invest $100 million in a state-of-the-art repair and service plant for power turbines; a repair and service plant which never came to fruition like other GE empty promises used as a bait to defraud the Nigerian Government. However, today 10 of the 18 turbines supplied by GE in one scope are flown back to the US for refurbishment and repairs.
Strangely, while payments under these contracts were specified against identified milestones, payments were made without the attainment of any milestone whatsoever. Now, as GE produces both single cycle and combined cycle gas turbines, it was ordinarily expected that they know the technical specifications of turbines especially with regards to efficiency. Generally, the single cycle gas turbines have an efficiency factor of 27%, while the combined cycle gas turbine has an efficiency factor of 47%. This is a fact known to GE as producer of these turbines. Sadly, GE supplied the Federal Government with single cycle gas turbines instead of the more efficient combine cycle gas turbines, despite that they have held themselves out (howbeit pretentiously) as Nigeria’s technology partner. It is rather baffling why they did not recommend to supply combine cycles which are more efficient with additional investments per project.
In respect of these power projects, GE International and its Nigerian partner, Rockson Engineering were engaged to provide the country with technical assistance and guidance and also to supply all the turbines through letters of credit fully established and paid in advance in USD to be delivered at Nigeria Seaports of Lagos and Onne, in Rivers State. When GE indicated that the turbines were ready, the Federal Ministry of power, having realized that the sites were not ready for the turbines, instructed GE to keep the turbines in the warehouse until when the sites were prepared and ready to receive the turbines. However, not only did GE refuse to keep the turbines in the warehouse, they shipped and dumped the turbines at the Lagos and Onne Ports without proper preservation because neither GE nor Rockson Engineering accepted that it was their responsibility to do so.
Understandably, whatever loss that would be occasioned would be borne by the Federal Government while these entities get their maximum and hyper-inflated payments.
In order to save the turbines from deterioration, the Federal Ministry of Power had to again award a separate service contract to GE to, among other things, assess the conditions of the very turbines they supplied for which the sum of $5million was paid by the Federal Government of Nigeria to GE.
After the assessments, GE was also contracted to supply replacement spare parts for the same turbines at the sum of $15 million USD for repairs of the turbines. The implication of the foregoing is that GE successfully stole from the Federal Government of Nigeria an additional sum of $20 million USD for what was apparently the fault and misconduct of GE.
Additionally, whereas GE supplied the turbines referred to above, that is, 18 nos. GE frame 9 x126MW turbines for total sum of $404 million USD, in the case of Egbema, Amoku and Gbarain the same GE supplied 9 nos. GE frame turbines of 126MW each through Rockson Engineering at a whooping sum of $1.55 billion USD. In other words, while GE supplied 18 units at $404 million USD in 2007, the same GE, as a consortium with Rockson Engineering supplied only 9 units of the same turbines at $1.55 billion USD. While GE was bleeding the nation to death as shown above and in many other instances too many to recount in this Petition, Rockson was also hammering away on the already fragile walls of the Federal Government’s finances. Thus, between the duo of GE and Rockson, Nigeria lost billions of dollars and with nothing to show or justify such humongous pillaging of our resources.
THE HOUSE OF REPRESENTATIVES PROBE
On the basis of the facts highlighted above among many others, the House of Representatives, in 2008 constituted an Ad-hoc Committee to investigate the power sector expenditure. The report of the Ad-hoc committee which is annexed to this Petition did not only thoroughly berate and deprecate the fraudulent, outlandish and sordid acts of GE and its allies, notable among whom was Rockson, the report specifically recommended that GE, Rockson and their cronies be subjected to criminal investigation and prosecution. Furthermore, while the EFCC was investigating Rockson Engineering Nigeria Ltd in 2009 of fraud involving the sum of over N347billion, GE and Rockson Engineering Nigeria Ltd entered into a Consortium Agreement.
The aim of this consortium agreement was to provide a cover for RocksonEngineering which was blacklisted as at that time due to its fraudulent activities as per the Report of the House of Representatives. By reason of this consortium agreement, they were awarded the EPC contract for 215MW Kaduna Power Plant by the Federal Ministry of Power for $256million USD.
The performance period (timeframe for execution) for the Kaduna Power Plant project was 36 months from the date of the award.
Equally, the various other power projects awarded to GE and Rockson prior to the Kaduna Power Plant (the pre-2009 projects) were also slated for completion within 48 months during which these projects ought to have been completed and handed over to the Federal Government to contribute to the national grid of electricity generation and supply. Thus, by all reasonable estimation, Nigeria would have had thousands of megawatts produced and aligned for utilization sometime about 2011. Sadly however, none of these projects has been delivered up to date (2018) but the Federal Ministry of Power, Works and Housing continue to pay GE and Rockson Engineering on the said service contracts, apparently with the connivance of project staff of the Ministry of Power.
Some of the projects designed and intended to generate electricity are as shown below:
GbarainUbie - 378MW
Amoku - 378MW
Egbema - 378MW
Kaduna - 215 MW
TOTAL 1349MW
It is therefore clear that the activities of GE International has deprived Nigeria of at least 1349MW of electricity over a period of about six (6) years. Still further, the choice (preferred) fuel for the Kaduna 215MW power plant as per the EPC contract was LPFO and natural gas. GE, Nigeria’s Technology Partner knowing that LPFO is available at Kaduna Refinery and Petrochemicals Company, but that pipeline gas is not available eliminated in the fuel mix post contract execution and commencement, leaving only the unavailable natural gas. This would create an impossible situation and leave the nation to only make recourse to diesel with its severe economic repercussions. Consistent with their shameless tradition of abuse, brazen acts of defrauding the nation and mindless scheming, perhaps aided and emboldened by some unpatriotic elements in positions of authority, GE and Rockson have written to the Ministry of Power, Works and Housing requesting for $15million USD to re-introduce LPFO into the fuel mix of Kaduna 215MW Power Plant. The request is still pending.
We find it incomprehensible that the duo of GE and Rockson would be so bold to not only deprive the nation of a critical operational component of the equipment they contracted to deliver (as per the LPFO fraud) but also turn around to demand for an additional whooping sum of USD15 million as harvest in furtherance of their malevolence. How can a contractor who breached the contract by excluding the LPFO component in the equipment feel so confident to demand for such outrageous sum in the name of remedying its design defect?
ROCKSON AS A CHRONIC DEBTOR
It is important to state here that in the midst of all of this, Rockson Engineering has severally been listed as a bad debtor and that AMCON has bought over some of its bad debts.
It is as well important to state that whereas the activities of Rockson Engineering and its CEO, Sir Johnson Arumemi-Ikhide with regards to their relationship with Rivers State Government, Dr. Peter Odili and Arik Air has been a subject of previous investigation by the EFCC, the aspect covered by this petition which is of far more national consequence, has never been investigated.
Rockson has not only aided and abetted the criminal and fraudulent acts of GE on the nation, it has yielded itself as an active instrument by which these frauds have been practiced on and perpetrated against Nigeria by GE. On reading of the contract in respect of the Kaduna power plant brings to the fore certain curious features and occurrences of very significant proportions. Firstly, GE’s choice of Rockson in the midst of previous indictment and the House of Representatives’ investigation and damning report. Secondly, the decision by GE and Rockson to enter into a consortium arrangement with liability specified as several and not joint despite that they bided for the contract as one entity, with GE as leader of the consortium to protect and cover Rockson completely. Thirdly, the acceptance by government officials to award and execute the contract with GE-Rockson on the basis of several liability despite that both entities were awarded the contract as a single Contractor. Many more flashpoints abound in the contract. The character of its execution is a sad tale of public knowledge.
THE SABOTAGE AND ECONOMIC REPERCUSSIONS.
The acts of sabotage done to the efforts of the Federal Government and the economy of Nigeria by GE and Rockson are quite monumental and include the following:
Defrauding Nigeria of $1.348 billion USD over and above the standard international price of single cycle GE frame 9 turbines.
Loss of over 1349MW of electric power to the national grid for a period of over 6 years which, when sold at N40/KWh would have directly generated at least, the sum of N1,388,202,105,600.00 as detailed below:
Avg. power Available (MW)
Years delayed
Annual Loss of Revenue (NGN)
Total Loss of Revenue (NGN)
Kaduna
105.1
6
36,823,536,00
220,941,216,000.00
Egbeme
185.7
6
64,847,827,200.00
389,086,963,200.00
Omoku
185.7
6
64,847,827,200.00
389,086,963,200.00
Gbarain
185.7
6
64,847,827,200.00
389,086,963,200.00
GRAND TOTAL
1,388,202,105,600.00
Loss of over $7 billion USD in direct foreign exchange on importation of generators and diesel fuel imported and used for self-generation by Nigerians (from 2011 to 2018).
Loss of revenues and jobs in textiles and other industrial clusters across the country expected to gain from increased and stable power.
Loss of approximately $150million USD for non-proper preservation of the turbines, consultancy fees and procurement of spare parts.
Loss of small scale self employment opportunities for the youth.
PRAYERS
Given all that has been said above, and the much that may further be revealed in the course of investigating this petition, it is our prayer that:
EFCC would cause a detailed investigation of the facts contained in this petition and invite the key players to find out why they have continued to sabotage the Federal Government’s efforts and investments in the power sector.
The key actors who would provide relevant information include:
GE Nigeria, CEO,
Mr Lazarus Angbazo and representatives of the various GEentities in Nigeria including but not limited to GE International Operations Nigeria Limited, General Electric NP Nigeria Limited, Pressure Control Systems Nigeria Limited, among others
Rockson Engineering Nig. Ltd/Rockson International Group Limited, CEO, Sir Johnson Arumemi-Ikhide
LiyelImoke, former Minister of Power.
Esther NenadiUsman, Former Minister of Finance.
Project Managers and staff of Federal Ministry of Power, Works and Housing of Egbema, GbarainUbie, Amoku, Kaduna and Alaoji power plants.
Project Consultants of Egbema, GbarainUbie, Amoku, Alaoji and Kaduna Power Plants.
Officials of Bureau of Public Procurement.
Officials of AMCON
It is our firm belief that a detailed investigation of the facts contained in this petition would help to determine the actual economic losses and havoc done to Nigeria by GE, Rockson and other actors in the despicable developments set forth herein with a view to recovering them and preventing future losses in the national interest.
Please accept the assurance of our commitment to the Nigerian project.
Thank you.
Yours faithfully,
Solomon Adodo
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