Reps question NIGCOMSAT’s $500.8m insurance contract

The House of Representatives on Monday uncovered over $500.8 million insurance contract awarded by Nigerian Communications Satellite (NIGCOMSAT) since 2013 without due process.

Adekunle Akinlade, chairman, Ad-hoc committee investigating insurance companies pay out by ministries, departments and agencies (MDAs), disclosed this during an interactive session with Bimbo Alale, NIGCOMSAT Managing Director.

Akinlade who accused the agency of breaching the Public Procurement Act, expressed concern over the award of $500,794,181 insurance contract to unlicensed insurance companies.

According to the documents obtained by the Committee, the agency spent the sums of $188,883,845 in 2014; $168,135,252 and $143,775,084 in 2015 on insurance without also advertising the jobs.

While ruling, the chairman directed the NIGCOMSAT Managing director to provide all documents covering every transaction from 2013 to date.

He also summoned Ahmed Rufai, former managing director of NIGCOMSAT and all former directors of finance to appear before the committee next Monday.

While responding to inquiries by the Committee, Alale argued that NIGCOMSAT selected insurance companies based on a list recommended by the National Insurance Commission of Nigeria (NAICOM) and approval from the Presidency.

She said until 2016, “we never advertised. We just call for a meeting of firms recommended by NAICOM and organize a workshop for them. It is after that we choose which participating firm to use.”

On the appointment of unlicensed brokers, the managing director who denied knowledge that  the firms were unlicensed, however explained that most indigenous firms refused to give cover because the risk was high.

According to her, “Most of the local companies refused to take the cover because the risk is high but we have been able to split it into two. The cover is split 30 percent/70 percent. 70 percent is taken by foreign underwriters while 30 percent is taken by local insurance underwriters.”

She added that “to be honest, in that 2013, I didn’t know that they were not licensed and no Nigerian company was ready to take the risk.”

While responding to the money paid to Standard Chartered Bank, instead of an insurance company, Alale argued that it was a typographical error.

In his remarks, Onyewife Gabriel (APGA-Anambra) cited section 34, 35, 35 and 37 of the Insurance Act, which prohibits doing business with such companies said: “Madam, I will like you to know that you risk a two year jail term if you are convicted for the violation of any of these sections.”

Also speaking, Prestige Ossy (APGA-Abia) alleged that “if you did not advertise the jobs, it means you brought in people of your choice with your own interest thereby shortchanging the government.”

Also commenting on the issue, Emma Oghene (PDP-Lagos) asked the Managing Director, “So, you deliberately didn’t advertise these jobs thereby violating the BPP Act?”

KEHINDE AKINTOLA