Hats off to Yar'Adua

[Richard Akindele]

Abuja - Nigeria has suspended a railway deal with China and threatened to revoke two oil licences awarded to South Korea in the latest move by President Umaru Yar'Adua to review contracts signed by the last administration.

The authorities suspended the rail contract with one of China's biggest engineering firms because the cost was inflated and there were no funds for the project, meant to modernise Nigeria's century-old rail system, Yar'Adua's spokesperson said.

Former President Olusegun Obasanjo awarded the contract worth $8.3bn in 2006 to China Civil Engineering Company (CCEC) and promised the firm an oil block in return as an incentive.

"The federal government had suspended the execution of the Chinese railway contract because this administration had discovered that the contract was over inflated," presidential spokesman Olusegun Adeniyi said.

"Everything about the contract was wrong. There was no fund allocated for the project other than a promise by the immediate past administration to give the Chinese company an oil block," he said.

He said the government had asked CCEC to submit a new proposal detailing its funding plans.

Foreign industry executives say widespread reviews of existing contracts by Yar'Adua's 17-month old administration have heightened investor uncertainty. The government says it wants to ensure that all deals are in Nigeria's best interests.

Adeniyi said Nigeria would revoke two offshore oil blocks, Oil Prospecting Licences 321 and 323, awarded to the Korean National Oil Company if the firm failed to pay a signature bonus of $231m waived by the last administration.

"This waiver is not acceptable (to) this administration because the constitution does not allow a waiver," he said.

"The oil minister is in dialogue with the Korean oil firm to pay the signature bonus due ... (if) they still refuse to pay, the company stands to lose the licences."

Obasanjo had made developing infrastructure central to the award of new oil acreages in Africa's top oil producer, but the policy was widely criticised as lacking transparency and not following due process.

Obasanjo offered preferential rights to mainly Asian firms during oil block auctions in 2005 and 2006 in exchange for promises to invest in infrastructure. The policy drew huge bids from several companies, many of which never produced the cash.

- Reuters

[Richard Akindele]

Ah yes! Doesn't this just give you a warm fuzzy feeling inside!

Well done Mr. President. That is the way to do it.

What do we stand to gain by awarding contracts to foreign nations at inflated prices? Particularly, when the nations in question are more advanced than we are. They are already wealthy, and we're unjustifiably giving them more? This is more of why we're not moving forward as a nation.

Instead of handing our financial resources to the Chinese and the Koreans, how about we spend some of that money to send our talented engineers to the best schools around the world? Let them go and learn how to build automobiles, trains, planes, railroads, tar roads, electronics, etc. Upon completing their studies, let them return home and start taking baby steps toward manufacturing these things domestically.

How come the Chinese can do it, and we can't? There are probably Nigerians in Germany, the UK, the USA, and so forth, working for the companies that manufacture those things we're paying through the nose for.

It baffles me to no end to know that former president Olusegun Obasanjo would allow such horrible deals to go through. What was he thinking? Where was his negotiating skills? Or did it just not occur to him that money needs to be spent diligently and judiciously? Take care of the pennies, and the Pounds would take care of themselves.

Again, thank you Yar'Adua for probing into these shady contracts. This demonstrates your interest in Nigeria's affairs, something very lacking in our leaders. It should be the hallmark of any presidency, to look out for what is best for its citizens.

Five Stars to Yar'Adua on this one!!