RSG to prosecute Saipem SPA, Saipem Contracting Nigeria Ltd for advance fee fraud, others; Nigeria’s Senate threatens Saipem, Daewoo

The Rivers State Government (RSG) has engaged the services of Mr. Godwin Obono-Obla, Senior Advocate of Nigeria (SAN), to prosecute Saipem SPA, Saipem Contracting Nigeria Limited, its Managing Director, Walter Peviani and four others over alleged conspiracy, fraud, obtaining credit by false pretence and cheating in respect of $119 million contract for the construction of the OCGT Power Plant in Port Harcourt.

The offences run contrary to sections 518 (6) and (7), 419 (A) (1) (b), section 421 of the Criminal Code Law of Rivers State, Cap 37 Vol. 2 Laws of Rivers State of Nigeria 1999.

Other defendants in the charge marked PHC/3106/CR/2021, include; Kelechi Chinakwe, Giandomenico Zingali, Vitto Testaguzza and David Anelli.

Specifically, the defendants as contractors to Rivers State Government of Nigeria and officers of Saipem SPA and Saipem Contracting Nigeria Ltd, in respect of the contract for the construction of the OCGT power plant in Port Harcourt between 2011-2018, were alleged to have conspired to cheat and with intent to defraud, obtained credit by false pretence from the Rivers State Government being advance payment of the total contract sum of $130 Million USD, when they have not kept their obligation under the contract.

The defendants in the suit scheduled for hearing on November 26, were also alleged to have obtained the credit of $20,467,942.00 by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b).

They were in addition accused of obtaining credit of N7 billion by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b).

“Obtaining credit of N318,640,173.54 by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b).

“Attempt to cheat $97 million contrary to Section 508 and punishable under Section 509.

“Attempt to cheat $15 Million USD contrary to Section 508 and punishable under Section 509; Conspiracy to receive a credit of $97 Million by false pretence contrary to Section 518 (6) and punishable under Section 518; Cheating $11 Million USD contrary to Section 421 and punishable under Section 421, among other charges.

From the Proof of Evidence attached to the Charge and the Statement made by Mr. Temple Azunda, Head, Power Generation/Mechanical of the Rivers State Ministry of Power, the facts constituting the case in hand are as follows: “Saipem SPA and Saipem Contracting Nigeria Limited and other officers of the duo, are Italian companies which services have been retained by the Rivers State Government in several projects, prominent amongst which is the AFAM Phase II Power Plant Project.

“By an initial tripartite agreement made on January 20, 2010, the RSG under the auspices of the Rivers State Ministry of Power entered a contract with Saipem Contracting Nigeria Limited, Saipem SPA for the construction of the OGCT power plant in Port Harcourt at a total cost of $119 million consequent upon which the Rivers State Government made advance payments, in instalments, to Saipem Contracting Nigeria Ltd and Saipem SPA amounting in total to a sum of $130 million in all which the defendants have acknowledged receipt of.

“The defendants were to be given an initial mobilisation of 20 per cent of the total contract sum which the RSG paid. It was part of the initial agreement – and indeed a condition sine qua non – that, to access the second tranche of payment of 25 per cent from the Rivers State Government, the defendants would mandatorily have installed the Gas Turbine into the foundations.

“By various pieces of correspondence misrepresenting facts to the RSG, the defendants have received by false pretences a total sum of $130 million which they have acknowledged in correspondence to the Rivers State Government Ministry of Power. This is $11 million in excess of the total contract sum while the contract is still at a preliminary stage only.

“To worsen matters, the installation of the turbines in the foundation which is a mandatory precondition for access to the second tranche of payment of 25 per cent of the total contract sum has not been done.

“In fact, the RSG is aware that the turbines which it had bought and the transport cost of which has already been paid to the defendants are lying in a seaport in the Netherlands and have accumulated demurrage of about $8 Million USD which the defendants insist must be defrayed by the RSG.

Meanwhile, Nigeria’s Senate has threatened to issue a warrant of arrest against $10 billion Train 7 project promoters, Saipem and Daewoo, for shortchanging the federal government in the execution of the project.

Train 7 project was aimed at boosting Nigeria’s liquefied natural gas output by some 35 per cent.

Speaking on the failure of the foreign companies to appear before the Senate Committee on Local Content, Vice Chairman of the Committee, Senator Abdullahi Sabi, said the companies were invited following the petitions about a breach of local content laws on the Train 7 project but declined to appear before the panel.

Senator Sabi said the companies’ absence would not be acceptable and gave the foreign firms till December 2, to appear or use the power available to Parliament to make the companies appear.

” We invited the operator of the Train 7 project (NLNG), the project promoters (Saipem and Daewoo), along with the regulators, Nigerian Content Development and Monitoring Board (NCDMB) to appear before us, following petitions of violation of local contents laws on Train 7 project.

“As a parliament, we would not fold our arms and watch our laws breached and trampled upon, particularly in the implementation of a project as important as Train 7, which is a $10bn project.

“However, we would offer all four another opportunity to appear before next week Thursday (2/12/2021) and have their say.

“We would want to advise those invited not to dare the Senate by again failing to honour our invitation.

“If they fail to appear, we shall escalate the matter into a public investigative hearing. It is advisable they appear before us before the matter is escalated, following which we shall use powers available to us under the law, to compel their appearance.

“As part of any investigative hearing, we shall look into the antecedent and future interest of all the companies and were found culpable, stop them in the future work. While we are happy to encourage foreign investment in Nigeria, it must comply with our local laws.”

 

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