Press Statement: How spent Rivers money under Governor Amaechi -Former Executive Council

Former Rivers State Governor, Amaechi

Former Rivers State Governor, Amaechi

PRESS BRIEFING BY FORMER MEMBERS OF THE RIVERS STATE EXECUTIVE COUNCIL UNDER THE RT. HON CHIBUIKE ROTIMI AMAECHI, CON, FORMER GOVERNOR, RIVERS STATE HELD AT THE ERNEST IKOLI PRESS CENTRE, MOSCOW ROAD, PORT HARCOURT ON SATURDAY OCTOBER 10, 2015

PROTOCOLS,
Good afternoon gentlemen of the press. We welcome you to this press briefing by the former members of the Rivers State Executive Council under the chairmanship of the Rt. Hon. Chibuike Rotimi Amaechi, CON; this press briefing has become imperative following the recent spate of attacks on the former governor and allegations of corruption against the regime.
As persons who served on the state executive council, and in keeping with the ethos of the Chibuike Amaechi administration to maintain” transparent and accountable stewardship,” we have decided to hold this press conference to set the records straight.
All of you as media practitioners in Rivers State are aware of the events leading up to and after the elections in Rivers state. You all are also aware of the controversy that trailed the setting up of the Justice George Omereji judicial commission of enquiry and our position as robustly espoused by the former Honourable Attorney General and Commissioner for Justice, Worgu Boms. Our position now as at then was based on the following:
PRESS BRIEFING BY FORMER MEMBERS OF THE RIVERS STATE EXECUTIVE COUNCIL UNDER THE RT. HON CHIBUIKE ROTIMI AMAECHI, CON, FORMER GOVERNOR, RIVERS STATE HELD AT THE ERNEST IKOLI PRESS CENTRE, MOSCOW ROAD, PORT HARCOURT ON SATURDAY OCTOBER 10, 2015

PROTOCOLS,
Good afternoon gentlemen of the press. We welcome you to this press briefing by the former members of the Rivers State Executive Council under the chairmanship of the Rt. Hon. Chibuike Rotimi Amaechi, CON; this press briefing has become imperative following the recent spate of attacks on the former governor and allegations of corruption against the regime.
As persons who served on the state executive council, and in keeping with the ethos of the Chibuike Amaechi administration to maintain” transparent and accountable stewardship,” we have decided to hold this press conference to set the records straight.
All of you as media practitioners in Rivers State are aware of the events leading up to and after the elections in Rivers state. You all are also aware of the controversy that trailed the setting up of the Justice George Omereji judicial commission of enquiry and our position as robustly espoused by the former Honourable Attorney General and Commissioner for Justice, Worgu Boms. Our position now as at then was based on the following:
1. It is illegal for a governor to set up a judicial commission of inquiry.
2. While inaugurating the commission Mr. Ezebunwon Nyesom Wike had charged the committee to amongst other things “investigate the illegal sales of the power plants.” This statement by itself was evidence enough that a position had been taken by the Rivers State Government.
3. The Chairman of the Commission itself had himself stated “ if it was before me and sitting as a judge of a serious biting – biting court, you would have seen what is going to happen to people that are corrupt. I would have ordered the arrest of those corrupt officials who decided not to follow procedure and lock them up and maintain it.” This comment long before all parties had appeared before him was another confirmation of our position that the Commission’s report was already pre determined.
4. Government is a continum and Government policy is as determined by the administration of the day. Decisions of the State Executive Council are implemented by Ministries, Departments and Agencies and all records are domiciled in the ministries. As former commissioners we had each submitted our hand over notes to the Secretary to State Government as well as our Permanent Secretaries and so every record required by the successor government are available with the MDA’s. Our attention would only be required for routine clarification where this may be necessary.
Regardless of this we wish to reiterate our position previously espoused on the matters raised by the commission:

THE MONO RAIL PROJECT

Ø The Rivers Monorail Project is a major transport infrastructure project undertaken by the Rt. Hon Chibuike Rotimi administration.

Ø The project is in line with the vision of the Chibuike Rotimi Amaechi administration that there is a need to reposition Port Harcourt to become a major business destination in the South-South.

Ø Recognizing that Port Harcourt is the oil capital of the country. The aim of the Monorail Transportation system is to ease traffic on the major road corridor in the state and in doing that, galvanize business and jump start the local economy.
Ø The Rivers Monorail project is not a stand-alone project. For the project to be appreciated, it needs to be seen in conjunction with the complete developmental vision of the administration.eg the building of a new city; the Greater Port Harcourt Development Area, the on-going Transport Sector Reforms, the construction of the Mega Terminals. The aim of all these, is the repositioning of Port Harcourt.
Ø The Monorail project is a well-considered option after exhaustive analysis of all other options. For instance, the National Railway is comatose and also there is an extent to which you can expand the roads.
Ø The Decision to construct the Rivers Monorail Project was jointly adopted by the Rivers State Executive Council during the first tenue of Rotimi Amaechi when the present Governor, Chief Nyesom Wike was the Chief of Staff to the Governor at the time.
Ø When the decision to construct the Monorail was taken, there were no Due Process laws in existence in the state. But it should be noted that after the enactment of the Due process laws, The Monorail Project owner engineers; Arcus Gibb and officials of the Rives State Ministry of Transport were constantly briefing and keeping the Due process team up to date on all issues as they relate to the project. This fact can be backed up with several minutes of meeting between Due Process and officials of the Ministry of Transport/Arcus Gibb.
Ø It should also be highlighted that after the PPP (Public Private Partnership) partners; TSI Property and Investment Holdings Ltd pulled out of the project because of her inability to contribute her own 80% equity contribution (Due to the financial crash of 2008), The Former Deputy Governor Engr. Tele Ikuru headed an Executive Council committee to review and recommend if the Rivers State Government should continue with the project. The committee recommended that the Rivers State Government should continue with the construction of the Monorail Project with Arcus Gibb acting as the project consultants.

Ø The monorail project is even more significant now given the recent fall in the price of oil and the need for governments to create conducive environment for local business to thrive. There is no better way of helping local businesses thrive than putting in place a proper transport infrastructure network.
Ø As at the end of the tenure of Rt. Hon Chibuike Amaechi, 2 stations has been completed; Azikiwe and UTC Stations. The Depot and Sharks Park stations were already 80% completed. The train has been mounted and tested. In fact, the first phase of the project (2.6 Km stretch) could be said to have been technically completed.
Ø It is infantile and the height of gross irresponsibility to request that the sum of N33Bn be returned to the Rivers State Government. It shows a complete lack of understanding of the rudiments of governance and infrastructural developments. Pertinent issues to be raised;
1. The N33Bn in question, is it the money that has been spent on the project?
2. Has the “so called” panel established any case of financial impropriety?
3. What is the Wike administration’s position on securing the assets of the project e.g. the trains that are just wasting away at the station?
It is important to compare this situation with the scenario in Lagos when British investors went on an inspection of the Lagos Rail Mass Transit Project; Blue Line project (a public transport infrastructure project started by the former administration of Babatunde Fashola) and pledged the support of the UK private sector to the expansion of the project. That is what governance is all about. Continuity!

Ø The present construction is on the busiest road corridor in the state and is broken down into 2 different phases. Phase 1A: 2.6km stretch, UTC-Sharks Park, 3 Stations and 1 Depot. Single track, 1 Train in operation. The train will have 7 coaches and will be able to accommodate 172 passengers with access for the handicapped. The train will be operating at a speed of 70km/hr. and is expected to travel within end stations in 8 minutes. Passengers will be expecting a train to stop at a station every 8 minutes.
Ø Electric Supply for the system will be coming from the Trans Amadi Sub-Station with back-up generators installed.
Ø Phase 1B: 3.9km stretch UTC-Waterlines. 3 proposed stations; Waterlines, Garrison and Isaac Boro, 6 trains.
Ø Our construction strategy is in phases (All over the world the rail system is done in phases. In India it took 22 years to complete 1 line. Even in Dubai, it took them 8 years to complete their Monorail and it was done in phases).We started construction in February 2010. We have a commitment to make Phase 1A operational by April 2015. We are also deploying manpower and machinery for Phase 1B.
AGRICULTURAL CREDIT SCHEME
· This scheme was intended to facilitate the flow of credit to farmers to enable them expand and consolidate their holdings.
· Sums were set aside for disbursement to farmers in the various LGAs of the State by way of grant.
· The programme concentrated on cropping, fishing, livestock, processing, storage, forestry, marketing etc.
· A total no of 380 mother cooperatives were engaged after scaling through the eligibility criteria
· There were a total no of 2553 subgroups engaged by the mother cooperatives.
· A total of N4bn was earmarked for the implementation this programme and the completion of the fish farm projects.
· So far, about N3.1bn has been disbursed from the funds living behind about 900million with Rivers State Ministry of agric account for the completion of the projects.

SALE OF POWER PLANTS
ALLEGED FRAUDULENT SALE OF RIVERS STATE POWER ASSETS AND CONVERSION OF PROCEEDS AMOUNTING TO SIXTY BILLION FOUR HUNDRED AND EIGHTY MILLION (N60,480,000,000.00) NAIRA ONLY

These allegations are not true as can be discerned from the following:
i.​The Rivers State Executive council after extensive deliberations on 15th and 16th August 2012 (See attached extract from the Minutes of the Executive Council meeting) took a decision to sell seventy percent (70%) of its equity in the power assets of the State. The sale of this equity was particularly informed by the following considerations:
1. The Federal government had commenced a privatization process to unbundle the Power Holding Company of Nigeria (PHCN) to drive efficiency.
2. PHCN was not paying River State Government for electricity contributed to the national grid
3. The state was spending heavily on purchase of gas from Shell Petroleum Development Company (SPDC) and Nigeria Agip Oil Company (NAOC) to fuel the plants. At this time the State was indebted to Shell and Agip to the tune of Seven Billion (N7,000,000,000.00) Naira.
4. The State was spending over one billion Naira annually on maintenance of the plants without commensurate returns in the form of electricity supplies
5. Need to engender efficiency in the management of the power assets so that its benefits can be felt by the generality of the people of Rivers State.
6. The State Government does not have the requisite manpower to manage the facilities.
7. Need to augment revenue in the face of dwindling federal allocation to the State.

Similar considerations informed the lease/concession of entities like RISONPALM which before then had shut down for over ten years, Supabod stores (Now SPAR) which was shut down since the 1980s and Olympia Hotel (Radisson Blu Olympia) which had ceased to function since 1993 and was being used as a Police Barracks. These entities were leased and not sold as being mischievously peddled by some individual in Rivers State. At the end of the lease period, these revived assets will revert to the State Government.
ii.​Proceeds from the sale of the assets was properly recognized in the 2014 Appropriation Law of Rivers State as one of the sources of revenue to fund the 2014 budget. Please see Extract below:

Revenue​​​​​Amount in N
​​
FAAC​​​​​​241,000,000,000.00

IGR​​​​​​92,000,000,000.00

Proceeds from sale of Assets​​33,000,000,000.00

Cash Bal B/F​​​​​10,717,000,000.00

Bond/Loan​​​​​100,000,000,000.00

World Bank/ADB loan​​​6,984,000,000.00

Total​​​​​​485,524,000,000.00

iii. ​The Power assets were priced and sold at a premium at $800,000 per mega watts which is higher than the rate of $358,000 per megawatts used by the Federal Government in disposing its power assets at Afam. Whereas River State earned $302,000,000.00 for seventy percent of its power assets of 542 megawatts, the Federal Government received $260,000,000.00 for the 726 megawatts plant situated adjacent to the Rivers State facility.

iv.​Payments for the assets were made in several tranches between 2012 and 2014

v.​All Proceeds of the sale made in US Dollars were lodged in the Rivers State Power Assets Sale Account with Access Bank

vi.​The USD proceeds were sold to willing buyers at a rate higher than the prevailing CBN rates, and the Naira equivalent lodged by the buyers into the Rivers State revenue Account at Zenith Bank.

vii.​The companies that were erroneously portrayed as fronts for looting of the funds were actually those that bought the USD and made remittances of Naira equivalents into the given Account with Zenith Bank. Please see details below

viii.​Once the funds were received into RVSG account they were used alongside others from other revenue sources to finance various Government projects and activities (Please see attached Statement of Account for the relevant period).

UNLAWFUL PAYMENT TO AND CRIMINAL CONVERSION OF N4,633,440,000.00 BY CLINORIV SPECIALIST HOSPITAL

The facts of this transaction are stated below:

i. The Justice Adolphus Karibi-Whyte Hospital was conceived by former Governor Amaechi to address the huge tertiary health care deficit in Rivers State and indeed the country and help reduce the high cost of referrals to hospitals overseas.
ii. River State government in January 2008 signed a Memorandum of Understanding with Clinotech Diagnostics and Pharmaceutical Inc. Canada for the building and operation of a mega specialist hospital and leisure facility in Port Harcourt on a Public Private Partnership basis (PPP) with equity participation of Government 40% and Clinotech 60%.
iii. Clinotech conducted feasilbility studies, completed architectural designs of the hospital and moved to the given site at the old UPTH using its own funds, before a decision was taken by RVSG to relocate the hospital to Greater Port Harcourt as one of the anchor projects for the new city.
iiii. In May 2008 the Rivers State Government released the sum of Four Billion, Six Hundred Million Naira ($39.2m) representing its 40% equity. However Clinotech that was supposed to make 60% equity contribution to the project was unable to meet its own obligation citing issues associated with the global financial meltdown..
v. The River State Executive Council therefore suspended the joint venture and subsequently awarded it as a turnkey contract to Clinotech with direct funding (100%) by the Government
vi. On 5th March 2010, Rt. Hon. RC Amaechi reported Dr. Harrison Ofiyai, CEO of Clinotech to the then Rivers State Commissioner of Police alleging a case of breach of contract and fraudulent diversion of funds. The Police conducted its investigation into the matter and issued a report on 24th March 2010. (See attached copy of report).
vii. The Former Governor during a routine inspection of the site of the hospital on 5th May 2010 ordered the immediate suspension and evacuation of Clinotech from the hospital construction site, on the believe that the work done was not commensurate with the amount of money released for the project by the Rivers State Government
viii. Subsequently, on 12th December 2010, the former Governor approved the setting up of a Technical Committee to determine the way forward for the project. The Committee upon completion of its work submitted a report which valued the job done by Clinotech (including material at site) at the sum of Three Billion Nine Hundred Million Naira (N3,900,000,000.00) only
ix. The final financial position between the parties (RVSG and Clinotech) on the project has been determined as reflected in the ‘Agreement for the resolution of the failed 1000-Bed (Justice Adolphus Karibi-Whyte) mega specialist hospital contract’, executed by the parties on 19th March 2014 (copy attached).
x. The Rivers state Government executed a Memo of Agreement (MOA) on 9th May 2014 with VMS-WILLEMEN consortium for the completion of the JAKWH on a Build, Operate and Transfer (BOT) basis.
xi. It is clear from the foregoing that RT. Hon. Chibuike Amaechi, did not maintain ‘a studied silence for seven years without making any efforts’, but is also not involved in any unlawful enrichment and criminal conspiracy to convert public funds to private use.

Disappearance of Fifty-Three Billion Naira (N53, 000, 000, 000.00) from the Rivers State Reserve Fund Between 2014 and May 2015 Under Amaechi’s Watch

Neither the sum of Fifty-Three Billion Naira (N53, 000, 000,000.00) nor any amount for that matter “disappeared” from the Rivers State Reserve Fund between 2014 and May 2015 Under Amaechi’s Watch.

The first point to be made here is that the Administration of Governor Chibuike Rotimi Amaechi believed in saving for the rainy day. It is a mark of prudence that the Administration committed to a mandatory saving early in its life. However, unfortunate developments in the management of our national resources and the down turn in the economy accelerated the rainy day.

The second point, which is more of clarification and information relates to the amounts in question. At the inauguration of the Justice Omereji Commission, the claim was that the sum of Ninety-Six Billion (N96, 000, 000, 000.00) was withdrawn from the Fund by the Administration of Governor Amaechi.

The third point is that every withdrawal from the Fund complied with the extant controls governing the Fund. Following severe shortfalls in expected revenues, the Administration made three (3) withdrawals in 2014. Each withdrawal was in line with the governing law and the proceeds were applied for the purposes of government.

The total savings by the State over the life of the Administration was under Thirty-Nine Billion Naira (N38, 530,000,000.00) only. Earnings from the investment during the period were over Sixteen Billion Naira (N16, 000,000,000.00). The Fund had a Net Asset Value of over One Billion, Two Hundred Million Naira (N1, 200, 000, 000.00) only at the end of the Administration in May 2015.

CONCLUSION
Gentlemen of the press, we have gone to this extent because of the belief of the Amaechi admisteration that the people come first and have a right to know. These details we have put before you were all available to the Rivers state Government and the Omeriji panel respectively. We have again put it before you and the public to enable you judge for yourselves. We are confident of our stewardship as former members oft he Executive Council and we are certain that posterity would deal us a fair blow. We thank you for coming. God bless you!

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