News

Many of the firms bidding for infrastructure jobs in Nigeria’s $100 million Fadama development have been ‘found wanting’ and are being blacklisted by the Federal Capital Territory Administration.

When bids were opened for construction of the Fadama development project’s headquarters at Gwagwalada in Kaduna State recently, the acting head of Nigeria’s agricultural and rural development secretariat Mrs. Luois Maikori said that the bids of more than ten ‘erring construction firms’ had been rejected.

Mrs. Maikori did not say why they were blacklisted, nor would she name any of the offenders, but the errors may have been due to non-compliance with World Bank procurement guidelines.

Such compliance is a condition of the $100 million credit award in support of the Fadama project by the International Development Association, the World Bank agency which provides interest free loans aimed at boosting economic growth in the world’s poorest countries.

With its rich natural resources however, Nigeria is not included in the tally of highly indebted poor countries (HIPC) and the IDA credit will one day have to be repaid.  Though debt cancellation is a popular movement of the day, the World Bank and still less its subsidiaries has no power to cancel the advances.

Fadama land, consisting of flood plains and low lying areas found along Nigeria’s river systems, has high potential for employment.  Vast tracts of land can be kept in production during the long dry seasons, mainly by installing tube wells for small scale irrigation using advanced drilling technology.

Some 50,000 of these wells were installed when the technique was tried out on a smaller project started in the 1990s. But it was marred by conflicts between people who were competing for access to the newly irrigable land. The current project aims at a strategy whereby such problems can be avoided. 

But though the tender list for the Gwagwalada office building was whittled down to those accepted as compliant with the procurement rules, there were complaints among the contractors about the demand for completion within 12 weeks from the date of signing the contract.

They thought this would be a tight, if not impossible, schedule. But Mrs. Maikori, under instructions from her boss at Federal administration level, insisted that there would be no extensions of time.

Misgivings about payment were met with the assurance that the department would make full payment for the job, except for a retention pending completion. This in itself might well raise apprehensions among the Nigerian contractors.

Their spokesman, Uzeoma Anyanwu of Superplus International Construction, voiced the contractors’ opinion to members of the press as welcoming the attempt at transparency in the bidding procedures, but warned that the completion period allowed for this World Bank project was not realistic.

Nigeria is one of IDA’s top borrowers in the financial year 2006, amounting to $422 million. Though the client is relieved of the burden of interest by this form of credit finance, it still adds to the heavy burden of debt which is causing such controversy.  There are also annual service charges.

As one Nigerian writer said in a recent commentary on his country’s debt and corruption problem, Nigeria is angry that it is not classified as HIPC. But even if such status was granted, he argued, it would not make much difference to the problem of indebtedness.

“Scant attention is paid to the reality that neither the World Bank nor the IMF was set up to make poor economies stronger or independent of the controlling global economies and superstructure.

“The purpose of the HIPC initiative is merely to help selected countries bring their debt burdens to a sustainable level.”

The most recent development in this field has been approval of a $200 million credit from the International Development Association for the Lagos Metropolitan Development and Governance project which aims to increase sustainable access to basic urban services through investments in critical infrastructure.

This is a 40-year loan which attracts a service charge of 0.75 per cent allowing for a 10-year grace period, and there is a 0.35 per cent commitment charge at the outset.