The former members of the Kaduna State Executive Council (2015 to 2023) have debunked allegations that N1.3 billion for the Kaduna Light Rail Project was paid into the account of an unregistered company.
The former cabinet members made this known in a statement on Friday, February 21, 2015.
This was in reaction to a report that the Independent Corrupt Practices and Other Related Offences Commission (ICPC) was planning to get a court order for the forfeiture of N1.3 billion allegedly paid into an unregistered company’s account.
The former council members noted that the Kaduna Light Rail Project was part of the infrastructural revolution of former Governor Nasir El-Rufai’s administration to turn Kaduna into a modern and developed state.
They stated that the project conceived as a landmark legacy project by the State Executive Council in October 2015 was to be funded with part of the just secured World Bank Performance for Results loan of about $350 million.
They said: “An Indian company known as Skipper secured the award of the project following the competitive tender process. They were to be responsible for securing a loan of about 85% of the project cost from the Indian Export Import Bank, whilst Kaduna State Government was to pay 15% as equity.
“The contract term was consequently changed from an EPC to a Build, Own, Operate and Transfer so that Skipper will be responsible for ensuring the efficient operations of the light rail system and the repayment of the loan. A copy of the Public Private Partnership agreement is attached as Annex 2.
“In order to secure the loan from Indian Eximbank, we were required to submit a Detailed Project Report/Feasibility Study, for which a well known French group with requisite expertise – Systra, was engaged along with GTA Engineering Limited.
“After working for about six months with a team of experts from France, UAE and India, they submitted a 291-page feasibility report – the cost of which was $2.8m (then about N890million). A copy of the Feasibility Study is attached as Annex 3.
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“A memo was then submitted to the Kaduna State Executive Council (Exco) in November, 2017 to seek its approval/ratification of the report and payment which was duly granted. Then came a time that we wanted to do the ground-breaking, a request was duly sent to the Governor for the ground-breaking and the release of the first tranche of N1.2b deposit to the Joint Venture company’s account – Indo Kaduna Mass Rail System.
“An account was opened for the joint venture company with Sterling Bank. The Kaduna State Government was required to fund the account as part of its 15% equity contribution and a gesture of good faith.
“The approved payment of N1.2 billion was transferred to the new account whilst Skipper was handling the incorporation of the joint venture company with the Corporate Affairs Commission.”
The former council members disclosed that one of the conditions precedent to the final approval of the loan from the Indian EXIM Bank was the provision of a Sovereign Guarantee by the federal government.
They noted that the then Minister of Finance pushed back, saying the nation’s foreign debt burden was becoming too high and that she would be accused of being partial towards Kaduna State if they gave the Sovereign Guarantee.
They added: “So, because of this, we could not continue with the project. Meanwhile, during the intervening period, we had increased our down payment to N12 billion as part of Kaduna State’s 15% equity contribution.
“Of course, it is not our money and we would gladly support any legitimate process that will raise funds for our beloved State.
“But, we, as members of the former Kaduna State Executive Council (2015 to 2023), want to make it clear to the whole world that there was no iota of any wrongdoing. What we did in respect of the Kaduna Light Rail Project was as transparent as it was legitimate and lawful.
“All that is playing out is that the Kaduna State Government is using ICPC to harass Sterling Bank to make it look as if what we did should not have been done in trying to build a modern and developed state for Kaduna.
“The money they are asking to be forfeited was not anywhere. The ICPC forced Sterling Bank to produce and deposit the money with the CBN. Now, Sterling Bank is in turn trying to force Skipper to pay them the money even when the company had rendered services to the Kaduna State Government.
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“The project and payments were duly approved by the Kaduna State Executive Council and the Governor. The feasibility study and other documents relating to the Kaduna Light Rail Project are now the properties of the Kaduna State Government.”
On the issue of paying money into the account of an unregistered company, the former council members said there were divergent opinions as to whether they should use a limited liability company registered with the Corporate Affairs Commission (CAC) or use a company established by the State House of Assembly.
The former Kaduna council members said they later settled for Skippers’ preference for a limited liability company, adding: “In any case, opening an account in the name of a company pre-incorporation is not a crime under our laws. It only means that the signatories to the account are personally liable for pre-incorporation activities.
“The same joint venture company, Indo Kaduna MRTS-JV Nigeria Limited had been registered in India. That was why the Indian NEXIM Bank agreed to transact with the Kaduna State Government. But for the Sovereign Guarantee that could not be secured from the Federal Government, the Kaduna Light Rail Project would have been completed or be nearing completion.
“These are the facts. There is no basis for any forfeiture proceedings or Court Order. It is sheer oppression and abuse of power to confiscate private assets and discourage foreign direct investments.
“We challenge the purveyors of lies and falsehood to come forward with genuine documents to contradict any of the foregoing facts and we will respond accordingly.”
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