By Jane Okafor, Abuja
ABUJA: Immediate past cabinet members of the Kaduna State Government during the administration of Mallam Nasir El – Rufai have advised the Independent Corrupt Practices and other related Offences Commission (ICPC) to allow the ongoing litigation process on the light rail project of the past administration to run its full course before seeking forfeiture of N1.3bn in escrow account.
The members of the Kaduna State Executive Council, 2015 to 2023, said that letting the litigation process to be concluded first before seeking forfeiture of any asset linked to the light rail project will enable the agency determine if anyone was guilty of any crime or not.
The team which gave the advice alleged that the Uba Sani – led Kaduna State Government was goading the ICPC to seek the forfeiture of N1.3bn in an Escrow Account with the CBN.
In statement seen by The Daily Crucible, they said that there was no basis for any forfeiture proceedings or court order being sought by the anti – graft agency, describing it as “sheer oppression and abuse of power to confiscate private assets and discourage foreign direct investments.”
They noted that the said N1.3bn was not Kaduna State Government’s money, stressing that it came about when the ICPC became hostile and decided to go after Sterling Bank and compelled it to deposit the N1.3billion into an Escrow Account with the Central Bank of Nigeria (CBN), pending litigation to determine if any fraud or crime had been committed.
They wondered why the agency was in a hurry to seek forfeiture when the pending litigation process on the matter hasn’t been resolved yet.
The statement in full:
The attention of the former members of the Kaduna State Executive Council (2015 to 2023) has been drawn to a biased and obviously twisted news report about the attempt by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to get a court order seeking the forfeiture of N1.3b said to have been allegedly paid into the account of an unregistered company in respect of the Kaduna Light Rail Project. We are obliged to set the records straight, if only for the sake of poserity by providing the following facts and clarifications:
First, we wish to state that the Kaduna Light Rail Project came about as part of the infrastructural revolution of the Mallam Nasir El-Rufai administration to turn Kaduna into a modern and developed state. The project was conceived as a landmark legacy project by the State Executive Council in October 2015, to be funded with part of the just secured World Bank Performance for Results loan of about $350 million.
Given the magnitude of the project, which was estimated to cost between US$600-700 million, we needed foreign collaboration and funding. We therefore started with adverts in reputable local and international publications including The Economist Magazine. A copy of the advertisement for Expression of Interest dated November 2015 in the national dailies is attached as Annex 1.
In the end, 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.
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.
Based on the Detailed Project Report and the Feasibility Study prepared by Systra and GTA Engineering, we secured an in-principle approval from the Indian EXIM Bank in January 2017; a copy of which is attached as Annex 4. One of the conditions precedent to the final approval of the loan from the Indian EXIM Bank is the provision of a Sovereign Guarantee by the Federal Government of Nigeria, which we initially understood would be made available to Kaduna State. However, 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. 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.
When it became obvious that the Sovereign Guarantee would not be granted, we recalled the money from Sterling Bank. The bank refunded all the funds except for the cost of the feasibility study (N890million as stated in Paragraph 4 above) that had been paid which remains the property of the Kaduna State Government. Anytime, anyone wants to embark on the project, he will just pick up the report and start the project. There were other costs that had been incurred by Skipper and GTA, which had to do with geo-mapping of corridors, land acquisition, domestic and international travels and other relevant expenses; for which an understanding was reached for a setoff against interest received on the deposit.
As a responsible and transparent administration, we engaged the services of a forensic audit firm to ensure that the refunds due to Kaduna State Government were received as per attached copy, marked Annex 5.
It would be recalled that when some senior officials of the immediate past Kaduna State Executive Council were arrested by the ICPC, the allegation was that the N13 billion for the light rail project was missing. But, when evidence of the refund that was made to the Kaduna State Government and the report of the forensic audit that was conducted by the El-Rufai administration were made available to the ICPC, the narrative changed! Surprisingly, ICPC became hostile and decided to go after Sterling Bank and forced the bank to deposit N1.3billion into an Escrow Account with the Central Bank of Nigeria (CBN), pending litigation to determine if any fraud or crime had been committed. Please note that the N1.3 billion which Sterling Bank was forced to pay into the Escrow Account is the addition of the N890 million cost of the Feasibility Study and about N400 million interest that accrued on the deposit in the joint venture account.
Now, instead of waiting for the litigation process to run through its course and see if anyone is guilty of any crime, ICPC, goaded on by the Kaduna State Government, is seeking for the money in the Escrow Account with the CBN to be forfeited. The question is: What is the basis for the forfeiture and why is ICPC circumventing the process?
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! 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 a yet to be registered company, there were divergent opinions as to whether we should use a limited liability company that is registered with the Corporate Affairs Commission or use a company established by the State House of Assembly. It took sometime to go with Skippers’ preference for a limited liability company. 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. Meanwhile, 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.
In conclusion, 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!
*Signed*
*Members of the Kaduna State Executive Council, 2015 to 2023.*
*18th February, 2025*
