Senate queries FMBN over payment of N14.2bn for unexecuted housing project

The Senate Committee on Public Accounts has queried the Federal Mortgage Bank of Nigeria (FMBN) over the payment of N14bn to a contractor for the construction of 963 units residential building without execution of the project.

The Senate Committee, chaired by Senator Matthew Urhoghide, hinged the query on the 2018 report of the Auditor-General for the Federation, which is being considered by the lawmakers.

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The audit report stated that the housing project, called Legacy Estate, was awarded for N10bn.

However, N14.2bn was disbursed to the contractor between November 22, 2012, and April 29, 2013, resulting in an overpayment of N4.2bn, it added.

The Auditor-General, in the report, said: “Audit observed that the Bank (FMBN) awarded a contract for the construction of 963 units of a residential building called Legacy Estate, with all the facilities and services of a modern urban setting at a contract price of N10,000,000,000.00.

“However, a total of N14,281,749,370.71 was disbursed to the contractor between 22nd November 2012 and 29th April 2013, thereby resulting in an overpayment of N4,281,749,370.71.

“No reason was provided for the additional payment; neither was any evidence of contract variation presented for audit.

“The audit further observed, from physical inspection of the site on 7th July 2017, that the project had been abandoned since 2014, some months after payments were made, with less than 10% of work done.

“Yet the bank did not only pay the full contract sum but the contractor was also overpaid to the tune of N4,281,749,370.71, without any justification for the over-payment.”

The Managing Director of FMBN, Ahmed Musa Dangiwa, in his written response, said the bank’s management had engaged all relevant stakeholders to recover the assets expended on the project.

He said: “Our investigation report has been sent to Honorable Minister for Works, Power and Housing, as well as the board, which later directed us to send same to DSS, EFCC, ICPC and Special Presidential Investigation Panel for Recovery of Public Property.