The Federation’s Office of the Auditor General has questioned the management of the Ogun-Osun River Basin Development Authority for selling off government plant, property, and equipment worth over N2 billion for a pittance of N13.618 million.
As a result, the House Committee on Public Accounts summoned the Minister of Water Resources and the Permanent Secretary of the Ministry to explain the auction.
On Friday, the committee grilled OORBDA’s Managing Director, Olufemi Odumosu.
Odumosu justified the disposal at the investigative hearing, telling the committee that the PPE were auctioned off by auctioneers appointed by the Federal Ministry of Water Resources, who also approved the auction.
According to auction records, an 800KVA Perkins diesel generating set purchased by OORBDA in 2006 for an undisclosed sum was sold for N550,000 in 2018 after being classified as ‘unserviceable.’
A CAT payloader purchased in 1982 for N70,000 was sold for N40,000, and other earth-moving equipment such as bulldozers, graders, and escalators were sold for between N350,000 and N550,000 as unserviceable items.
A Toyota Camry 2.5L purchased in 2013 for N8.150m with a book value of N1.222m, which would have cost the agency N1.2m to repair, was also sold for N22,500.
Trimmers purchased in 2004 and lawnmowers purchased in 2005 were similarly sold for N2000 and N6500, respectively.
OORBDA also sold three Peugeot 504 station wagons purchased for N2.9m each for N26,400, while a Mitsubishi Canter lorry purchased for N8.55m was scrapped for N80,000 and a DAF (1000) lorry purchased for N5m was auctioned for N90,000.
The authority also sold for N187,500 a Toyota Hilux pick-up van purchased for N3.75m that would have cost N187,500 to repair.
Odumosu told the committee that the auction was transparent and that it was overseen by the ministry.
He claimed the PPE auctioned dated back to the late 1970s and early 1980s, but documents presented to lawmakers revealed that the oldest of the property was purchased in 1980 and the most recent in 2013.
While being grilled by the lawmakers, Odumosu requested that the documents be withdrawn and replaced with another, which the lawmakers denied.
The MD had said in his written submission dated May 16, 2022, that “your (committee’s) observation which is, however, noted was premised on the fact that at the time of disposal, the authority could not hand on all schedules of historical cost relating to these unserviceable items.
“This primarily was because they (unserviceable items) were procured dating back to the late 1970s to early 1980s at the commencement of the operations of the authority spanning over a 35 to 40-year period.
“Meanwhile, most officers directly involved in the purchase had either died or retired or both. However, through frantic efforts made (in the past which has been resumed) at recalling relevant living retirees to assist in archival retrieval of records relating to the purchase of the items had yielded significant results.”
The committee’s chairman, Oluwole Oke, criticized the auction while also questioning the method of selecting auctioneers and the ministry’s usurpation of the OORBDA’s board function.
Oke pointed out that the provisions of the Public Procurement Act were not followed in the sale of the items, potentially costing the government money.
As a result, the committee requested that the Minister of Water Resources and the Permanent Secretary appear before it on June 9, 2022, to explain their roles in the auction.
The committee’s Deputy Chairman, Abdullahi Abdulkadir, also requested that the authority submit the valuation report performed on the items prior to their sale, noting that the letter from the ministry to the auctioneers stated unequivocally that the items must not be sold for less than the government valuation.
