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Revealed: The Truth Behind $2.2 Billion Lagos-Ibadan Railine Project “Amaechi Not Part Of High Cost Of Contract”

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Reports of the proposed Ghana Railway line construction of 560km, which cost was put at $2.2b have once again brought to the fore Nigeria’s 146 km lbadan-Lagos railway line contract put at the same cost with critics accusing the government of former president Goodluck Jonathan government of inflating the cost of the project.

Those who know about the project have alleged that it was three times more expensive when compared with the cost of the proposed two rail projects in Ghana.

Some insiders in the Ministry of Transportation in Nigeria have however, described the comparison as unfair, especially as it is coming at a time when they said those who awarded the contracg have left office.

Investigations revealed that the reports, which appeared in the website of the Ghana Ministry of Railways Development have unsettled some people in the Ministry of Transport in Nigeria and that “they felt the matter should be given all the attention it deserved.”

They maintained that the revelations were coming at the wrong time and that it was the handiwork of “some enemies of progress that are jealous of the achievements of the immediate past Minster of Transport in Nigeria, Mr. Rotimi Amaechi.”

According to them, the contract was awarded during the era of former president Goodluck Jonathan and Amaechi had no hand in the contract since it was awarded before he got into office.

“We know where this is coming from. They are doing this to rubbish the humble achievements of Mr. Rotimi Amaechi as Minister of Transport. Where were they when former president Goodluck Jonathan was in office. Why are they bringing the reports out now?

“Amaechi had nothing to do with the contract at all. It had been sealed before he got into office.

“He achieved a lot in his time and he could not abandon the project because the government of President Muhammadu Buhari believes in completing all the projects it inherited from the last government.

“So, it is totally unfair to criticise Amaechi for the recklessness of the government of former president Goodluck Jonathan, which awarded the Lagos-Ibadan railline project.

“We didn’t start the project, it was inherited by our government and so whoever wants to point any accusing finger should point it at ex-president Goodluck Jonathan and his co-travellers,” said a source in the Transport Ministry in Nigeria.

It was gathered that the Managing Director of Lakeland Group, the local content partners for CRCC, Mr. Henry Djaba Jnr, who was mentioned in one of the reports described the comparison as unfair, arguing that there was no basis for comparing the differences in the costs of the projects considering the circumstances under which each contract was reached by each country.

Sources stated that the enemies of Amaechi were behind the saga and that “they are doing all within their power to ensure that they discredit Amaechi so that he would not be reappointed as a minister in the next dispensation, “but they will fail, Buhari knows those who are useful to his government and he would do the needful at the right time.”

Investigations revealed that the first difference between the cost of the Ghana rail construction cost and that of Nigeria was that the Lagos-Ibadan project is greenfield and a particularly challenging construction, whereas, the Ghana projects were part rehabilitation and part construction.

It was also revealed that the other differences were that the different funding arrangements have impacted the relative costs of the projects and the fact that the Nigerian project was an uncompleted project by the former Nigerian government was another factor.

It was however, revealed that the CRCC had offered to rehabilitate and construct a 560-kilometer standard gauge railway line in Ghana at $2 billion, whereas 340-kilometer standard gauge railway to be constructed by Ghanaian–European Railway Consortium (GERC) will cost $2.2 billion “as against what is being peddled by mischief makers.”

It was added that the Ministry of Transport in Nigeria would soon reveal the details of the project and “some other ones that were inherited from the last administration by the ministry so that the whole world would know who did what and when.”

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Poor tax collection: Fowler replies Buhari’s query

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The Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, has responded to a memo from Abba Kyari, the chief of staff to the president, who said there were significant variances between the tax budgeted collections and actual collections for the period 2015 to 2018.

However, Fowler in his response explained that the recession experienced by the Nigerian economy in 2016 as well as lower oil prices affected the revenue collected by the FIRS.

See Fowler’s response: “I refer to your letter dated 8th August, 2019 on the above subject matter and hereby submit a comprehensive variance analysis between budgeted and actual collections for each main tax item for the period 2012-2018 as requested (see appendix 1).

“Your letter stated that actual collections for a 3-year period were significantly worse than what was collected between 2012 and 2014. Total actual collection for the said period wasN14,527.85 trillion, while total actual collection between 2016 to 2018 was N12,656.30 trillion.

The highlight of these collection figures was that during the period 2012 to 2014, out of the N14,527.85 trillion, oil revenue accounted for N8,321.64 trillion or 57.28% while non-oil accounted for N6,206.22 trillion or 42.72% and during the later period of 2016 to 2018, out of the N12,656.30 trillion, oil revenue accounted for N5,145.87 trillionor 40.65% and non-oil revenue accounted N7,510.42 trillion or 59.35%.

FIRS management has control of non-oil revenue collection figures while oil revenue collection figures are subject to more external forces.” He wrote: “The non-oil revenue collection grew by N1,304.20 trillion or 21% within the period 2016 to 2018.

“Kindly note that the total budget collection figure during 2012 to 2014 stood at N12,190.52 trillion compared to N16,771.78 trillion for the period 2016 to 2018, which represent an increase of 37.58%.

“Please note that the variance in the budgeted and actual revenue collection performance of the Service for the period 2016 to 2018 was main attributed to the following reasons:

“1. The low inflow of oil revenues for the period especially Petroleum Profit Tax (PPT) was due to fall in price of crude oil and reduction of crude oil production. Notwithstanding government efforts to diversify the economy, oil revenues remains (remain) an important component of total revenues accruable to the Federation. The price of crude oil fell from an average of $113.72, $110.98 and $100.40 per barrel in 2012, 2013 and 2014 to $ 52.65, $43.80 and $54.08 per barrel in 2015, 2016 and 2017. There was also a reduction in crude oil production from 2.31mbpd, 2.18mbpd and 2.20mbpd in 2012, 2013 and 2014 to 2.12mbpd, 1.81mbpd and 1.88mbpd in 2015, 2016 and 2017 respectively.

“2. The Nigerian economy also went into recession in the second quarter of 2016 which slowed down general economic activities. Tax revenue collection (CIT and VAT) being a function of economic activities were negatively affected but actual collection of the above two taxes were still higher in 2016 to 2018 than in 2012 to 2014. During the years 2012, 2013 and 2014, GDP grew by 4.3%, 5.4% and 6.3% while in 2015, 2016 and 2017 there was a decline in growth to 2.7%, -1.6% and 1.9% respectively. The tax revenue grew as the economy recovered in the second quarter of 2017.

“3. It is worthy of note that strategies and initiatives adopted in collection of VAT during the period 2015-2017 led to approximately 40% increase over 2012-2014 collections. In 2014 the VAT collected was N802billion, compared to N1.1 trillion in 2018. This increase is attributable to various initiatives such as ICT innovations, continuous taxpayer education, taxpayer enlightenment, etc embarked upon by the Service.

“4. Furthermore, it is pertinent to note that when this administration came on board in August 2015, the target the target for the two major non-oil taxes were increased by 52% for VAT and 45% for CIT. Notwithstanding the increase, FIRS has in line with the Federal government’s revenue base diversification strategy has grown the non-oil tax collection by over N1.304 trillion (21%) when the total non-oil tax collection for 2016-2018 is compared to that of 2012-2014.

“I am confident that our current strategies and initiatives will improve revenue collection and meet the expectations of government.

“Please accept the assurance of my highest regards.”

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We’re not aware of Oyo-Ita’s purported retirement – Presidency

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The Presidency on Monday declared that it was not aware of the purported move of the Head of Service of the Federation, Mrs. Winifred Oyo-Ita, to retire from service.

The Economic and Financial Crimes Commission (EFCC) had last week Tuesday grilled Oyo-Ita over alleged N3bn scam. The Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, in a text message said that the Presidency was not in possession of any letter of intent from Oyo-Ita to retire from service. “Thanks.

We have no such letter here, in the event that such a letter exists. This is our position,” he stated

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Alleged N3bn Contract Scam: Winifred Oyo-Ita sends retirement letter to Buhari

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Winifred Oyo-Ita, the head of service of the federation, has offered to immediately proceed on retirement in a letter to President Muhammadu Buhari.

The widow had been under pressure from her immediate family to retire after news reports emerged that she was being probed over an alleged N3 billion contract scam.

Although she has vehemently denied involvement in any scam, she bowed to family pressures and sent in a letter on Sunday offering to proceed on retirement, we can report.

Buhari is yet to take a final decision on it but reports say he is favourably disposed to the option.

“Mrs Oyo-Ita has sent in her letter of retirement,” a family member, who asked not to be named, said on Monday morning.

She was absent at the presidential retreat for ministers-designate, federal permanent secretaries and top government functionaries held at the state house conference centre in Abuja.

The Economic and Financial Crimes Commission (EFCC) recently questioned Oyo-Ita over allegations that she used front companies to get contracts when she was a permanent secretary before her appointment as head of service by Buhari in 2015.

There were insinuations that she was being “punished” for “falling out” with Abba Kyari but it was learnt that the president’s chief of staff was unaware of the EFCC probe until it was leaked to the media.

Oyo-Ita has also told her associates not to drag Kyari into the matter because “it is not true”, according to a family member.

The EFCC said the petition against her was written in 2014 when President Goodluck Jonathan was still in office. It was however, learnt that Oyo-Ita was not the subject of the probe.

It was also reported that N600 million was traced to the account of one of her aides who has been quizzed by the anti-graft agency and released.

However, Oyo-Ita also denied the allegation, saying the money was meant for the death benefits of staff and was meant to be kept in a designated account for that purpose by the project accountant.

“She denied knowing anything about where the money was kept and said there was no fraud involved, at least not from her end,” the family member said.

The Cable

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