RIGHTS ACTIVIST DRAGS NLNG TO COURT OVER ABUSE OF LOCAL CONTENT POLICY, N1B LIABILITY

Human Rights Activist, Mr. Festus Keyamo has been contracted by the Managing Director of Macobarb, Mr. Shedrack Ogboru to take legal action against the Nigeria Liquefied Natural Gas Limited over abuse of local content policy and about one billion contract liabilities. Mr. Ogboru has also appealed to the management of Shell, Total and Eni, joint owners of NLNG to investigate how the company mismanaged Macobarb contract with the hope that stakeholders could avoid such catastrophic mismanagement in future.

Below is the letter from Festus Keyamo Chambers to the NLNG

Wednesday, 28th February, 2018.
 
The Managing Director,
Nigeria Liquefied Natural Gas Limited,
Intels Aba Road, Estate,
KM 16, Port Harcourt,
Aba Expressway,
P.M.B 5660 Port Harcourt,
Rivers State.
 
Dear Sir,
 
DEMAND FOR URGENT PAYMENT OF THE SUM OF N1,060,463.562 (ONE BILLION, SIXTY MILLION, FOUR HUNDRED AND SIXTY-THREE THOUSAND FIVE HUNDRED AND SIXTY-TWO NAIRA) TO MACOBARB INTERNATIONAL LIMITED, BEING CONTRACT LIABILITIES AND SUNDRY ENTITLEMENTS THEREIN.
 
We are solicitors to MACOBARB INTERNATIONAL LIMITED, of Plot 4 Zone 1, Papanye Close, Finima, Bonny Island, Rivers State, (hereinafter referred to as “our Client”) and whose firm instructions we write your good office.
 
Our brief is as follows:
 
That our client is an indigenous contractor with proven track records in the Civil Construction Sector, with a decade of Cordial and excellent contractual relationship with your company, thereby successfully executing a total of Sixty-Two (62) Civil Construction Projects in favour of your Company, between 2006 and 2014.
 
That on the strength of the good relationship between our client and your company, predicated solely on our client’s ability to perform and deliver within time, high quality, our client was promoted by your company, to the highest class of its contractors i.e. Engineer, procure and construct and was awarded a contract, with reference No. B130142PPL, titled “Access Control to CLR Laboratory, Shutdown Village and Gas Plant area Improvement Project”, in 2014 precisely, on the 9th of January, 2014.
That in a bid to deliver the project on schedule, our client obtained a loan facility of the sum of N50,000,000.00 (Fifty Million Naira) from Diamond Bank Plc., on the 4th of February, 2014 and promptly swung into action and within Six (6) months into the life span of the project which was fixed for Eighteen (18) months, our client had successfully executed various aspects of the project after deploying the sum of N50,000,000.00 (Fifty Million Naira) into the execution of the job.
 
That consequent upon the fact contained in the preceding paragraph above, your Company representative to the contract, one Mr. Dweller Francis, the cost Engineer, Evans Brown, jointly valued the work already done by our client to the tune of N27,434,648.95 (Twenty Seven Million, Four Hundred and Thirty-four Thousand, Six Hundred and Forty Eight Naira, Ninety-five Kobo) and subsequently raised an interim certificate for payment of the said sum in favour of our client, they both signed the interim certificate for payment, including one Marek Poproch, the Senior Construction Supervisor, but our client was denied payment of the said sum due to the refusal of one Bayo Adenrele to sign the Interim Certificate, on his insistence that the sum of N19,161,894.80 (Nineteen Million, One Hundred and Sixty-one Thousand, Eight Hundred and Ninety Four Naira, Eighty Kobo) (being 50% of N38,323,789.60 – BoQ Cost of Turnstiles, Vehicle barriers & Accessories) Valuation of Nigeria Liquefied Natural Gas Limited should be removed and pay only the sum of N8,072,754.15 (Eight Million, Seventy-two Thousand, Seven Hundred and Fifty-Four Naira, Fifteen Kobo), to our client before he would append his signature on the certificate.
 
That upon the refusal of Bayo Adenrele to sign for the sum of N27,434,648.95 (Twenty Seven Million, Four Hundred and Thirty-four Thousand, Six Hundred and Forty Eight Naira, Ninety-five Kobo), the sum of N19,161,894.80 (Nineteen Million, One Hundred and Sixty-one Thousand, Eight Hundred and Ninety Four Naira, Eighty Kobo) was removed before our client was paid the sum of N8,072,754.15 (Eight Million, Seventy-two Thousand, Seven Hundred and Fifty-Four Naira, Fifteen Kobo) as against N27,434,648.95 (Twenty Seven Million, Four Hundred and Thirty-four Thousand, Six Hundred and Forty Eight Naira, Ninety-five Kobo), for the work done, diligently valued and approved by four of your company’s staff, for payment by your company, in line with the contract document, as at June, 2014.
 
That the deliberate refusal of Mr. Bayo Adenrele to sign his column in the Interim certificate authorizing payment for work done by our client and its anticipated danger to the smooth and proper execution of the contract was communicated to your company by our client, in order for your company to prevail on the said Bayo Adenrele to approve payment according to the work done and valued by your company’s representative, but our client was ignored and was advised to seek alternative medium to fund the contract despite your company’s liability for work done, valued and approved for payment, by majority of your staff.
 
That the refusal of Bayo Adenrele to approve the payment for the valued work done, in the course of executing the contract, practically crippled the operations of our client and was on a “standby time period”, from the month of August, 2014, when she could no longer proceed with the execution of the contract without your company liquidating its liability to our client, in line with the contract document, which envisaged payment in line with the value and progress of work done.
 
That while our client was still on a “standby time period”, to the knowledge of your company, awaiting positive response to her email dated 30th of July, 2014, conveying her inability to further continue the execution of the contract as conceptualized, due to your company’s deliberate refusal to pay for work done, the second millstone being equipments ordered from abroad, were delivered from Abroad, and they were equally approved and valued by your company staff in 2015, to the tune of N33,588.401.76 (Thirty-three Million, Five Hundred and Eighty-eight Thousand, Four Hundred and one Naira, Seventy-Six Kobo) backed with interim certificate for payment duly raised and signed, by your company’s contract representative, one Dweller Francis, Evans Brown, Cost Engineer, Joseph Kikiowo, Senior Cost Engineer, Marek Poproch, Senior Construction Supervisor, all as representatives of your company, except again, Mr. Bayo Adenrele, as a result our client was again denied payment and the needed opportunity to waive whatever frustration brought into the contract by your company and proceed to complete same.
 
That our client was compelled to protest on several occasions vide emails, letters and meetings, the frustration of the contract by your company through its agent, Bayo Adenrele and the need to remedy the situation to avoid the continuous daily accumulation of cost on our client’s equipments and personnel already on a standby time on site, in line with the agreement of the parties not to reassign, remove, replace or reclassify any key personnel or equipment or plant while on site for the duration of the project, but all her protests were ignored and regarded as inconsequential, notwithstanding the fact that your company was fully aware that both personnel and equipments duly approved by her for the contract were on standby, at the site, with increasing cost on a daily basis.
 
That consequent upon the failure of your company to address the respective concerns raised by our client, her equipments and key personnel approved by your company and deployed to site for the purpose of executing the project were on a standby time, for a period of Five Hundred and Fifty-Nine (559) days commencing from 1st of August, 2014 to 10th of February, 2016, when a contract close out was performed. And applying your company’s standard figures in computation of payment for contractors on a standby time, as reflected in the table below, your company became indebted to our client to the tune of N973,463, 562.00 (Nine Hundred and Seventy Three Million, Four Hundred and Sixty-Three Thousand, Five Hundred and Sixty-Two Naira) between 1st of August, 2014 to 10th of February, 2016, plus the accumulated bank charges of N87,000,000.00 (Eighty Seven Million), making it a total of N1,060,463.562 (One Billion, Sixty Million, Four Hundred and Sixty-Three Thousand, Five Hundred and Sixty-Two Naira), the subject of this demand notice, herein.
 
TABLE 1: KEY PERSONNEL Standby Costs using ‘Personnel standby Hourly Rates’ (X 10 Hours a day/Personnel)
S/N DESCRIPTION NO. OF PERSONNEL STANDBY RATE PER DAY NO. OF DAYS AMOUNT
Standby Daily Hourly rate Standby Day Rate
(Standby daily hourly rate x 10hrs)
1 PROJECT MANAGER 1 3,750 NGN37,500.00 559 NGN 20,962,500.00
2 QA/QC ENGINEER 1 1,500 NGN15,000.00 559 NGN 8,385,000.00
3 DOCUMENT CONTROLLER 1 1,500 NGN15,000.00 559 NGN 8,385,000.00
4 HSE OFFICER 1 1,500 NGN15,000.00 559 NGN 8,385,000.00
5 MATERIAL CORDINATOR 1 1,500 NGN15,000.00 559 NGN 8,385,000.00
6 LEAD DESIGN ENGINEER 1 4,218.75 NGN42,187.50 559 NGN 23,582,812.50
7 DESIGN ENGINEER 3 2,250 NGN22,500.00 559 NGN 37,732,500.00
8 SUPERVISOR 3 1,500 NGN15,000.00 559 NGN 25,155,000.00
9 FOREMAN 1 900 NGN 9,000.00 559 NGN 5,031,000.00
10 EQUIPMENT OPERATOR 3 750 NGN 7,500.00 559 NGN 12,577,500.00
11 SKILLED WORKERS 3 712.50 NGN 7,125.00 559 NGN 11,948,625.00
12 UNSKILLED 7 487.5 NGN 4,875.00 559 NGN 19,075,875.00
SUB-TOTAL NGN 189,605,812.50
 
TABLE 2: EQUIPMENT Standby Cost using Contract ‘Equipment Standby Day Rates’
 
DESCRIPTION QTY Standby Day Rate NO. OF DAYS AMOUNT
Dewatering Machine 1 NGN 70,000.00 559 NGN 39,130,000.00
Compacting Machine 4 NGN 187,000.00 559 NGN 418,132,000.00
Air Compressor 1 NGN 41,250.00 559 NGN 23,058,750.00
Electric Jackhammer 1 NGN 25,250.00 559 NGN 14,114,750.00
Poker Vibrating Machine 1 NGN 15,000.00 559 NGN 8,385,000.00
Concrete Cutting Machine 1 NGN 25,000.00 559 NGN 13,975,000.00
Concrete Mixer Machine 1 NGN 45,000.00 559 NGN 25,155,000.00
Power Generator 1 NGN 18,750.00 559 NGN 10,481,250.00
Grinding Machine 1 NGN 9,000.00 559 NGN 5,031,000.00
Toyota Hilux Van 1 NGN 22,500.00 559 NGN 12,577,500.00
Prado Jeep 1 NGN 22,500.00 559 NGN 12,577,500.00
Toyota Dyna Truck 1 NGN 22,500.00 559 NGN 12,577,500.00
Mercedes Menz Hiab Truck 1 NGN 150,000.00 559 NGN 83,850,000.00
Accommodation Unit 3 NGN 60,000.00 559 NGN 100,620,000.00
Office Unit 2 NGN 3,750.00 559 NGN 4,192,500.00
SUB-TOTAL NGN 783,857,750.00
That the sum of N1,060,463.562 (One Billion, Sixty Million, Four Hundred and Sixty-Three Thousand Five Hundred and Sixty-Two Naira), the subject of this demand notice, represents the additional cost incurred by our client, while on a standby time, due to the refusal of your company, through its agent, Mr. Bayo Adenrele to effect payment for the work duly executed by our client and diligently valued by your company personnel, accompanied with relevant certificates for payment in favour of our client, as at when due and demanded on two different occasions, between 2014 and 2015.
 
That in line with Section 7 Article 5.11 of the contract agreement, your company is under strict obligation and liable to pay for any additional cost and if need be, extend the contract duration as a result of any delay caused by your company, as in the instant situation.
 
It is in the light of the fact stated above, taking into account all other relevant information available to our office, both oral and documentary, we are compelled to state, that your company through its agent, without any regard violated the contractual terms between your company and our client with impunity, an action which did not only make it impossible for our client to service its loan and liquidate same, but also kept our client’s personnel and equipments on a perpetual standby time period, between the month of August, 2014 to February, 2016, when the contract was formally closed out.
 
Flowing from the forgoing, we have the firm instructions of our client to demand the immediate payment of the aforesaid sum, and we do HEREBY DEMAND, that unless the sum of N1,060,463.562 (One Billion, Sixty Million, Four Hundred and Sixty-Three Thousand, Five Hundred and Sixty-Two Naira), is paid to our client within Twenty-one (21) days, from the date of receipt of this letter, we shall be left with no other option but to commence cogent legal action against your company for redress, upon the expiration of the period stated.
 
Please, accept the assurances of our highest regard, as we look forward to your positive response.
 
Thanks in anticipation of your urgent attention.
 
 
Yours sincerely,
For: Festus Keyamo Chambers,
GABRIEL OTOR, ESQ. SAMUEL O. ESHAREFASA, ESQ.
Counsel Counsel
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