EXCLUSIVE: UNIDO-led report knocked off German firm from Kano project – FG writes rejoinder to Newsdiary Online

By Danlami Nmodu

More facts have emerged about why the German firm Deutsch Africa Marketing Company was  dumped by the Federal Government when it awarded the contract for solving the ecological problem in Challawa,Sharada and Bompai areas of Kano State.

The fresh facts were contained in a rejoinder by the Federal Government to an Investigative story  published Monday this week by Newsdiary Online titled: Diplomatic Backlash,Legal Tussle Loom as FG Dumps German Firm over Kano Project.

Officials slam report, desire praise, not condemnation over Kano project

Even before the rejoinder was concluded, officials conversant with the Kano project slammed Newsdiary Online for allegedly  not reflecting government’s side of the story.

“Look the SGF, Boss Mustapha, ought to be  commended for reviving a dead project because  the matter had lingered for years without any headway.The Kano people  should  commend SGF for ensuring the project was  finally awarded and work going on,” a high level  official said. 

In the same vein, another Senior Civil Servant insisted “the Permanent Secretary Ecological Fund Office, Dr Habiba  Lawal equally deserves commendation and her thorough efforts on this project.She holds and PhD and she very conversant with the issue.Maybe people cannot manipulate her because of her knowledge of the issues at hand. Your paper should have heard from us before writing this story,” one of Newsdiary Online editors was told. However.despite assertions by some officials that the earlier investigative  story was one-sided, the online newspaper dutifully broke  an obviously  big story  based on evidence pieced together in the course of investigation.

Now to the heart of the matter as the the  alternative arguments  have  indeed trailed the Newsdiary Online report. What exactly is the Federal Government’s position on the matter? How was the contract for the Kano Project awarded? Which stakeholders influenced the decision and how? These  and many more points were addressed in the rejoinder exclusively to Newsdiary Online by the Federal Government  as compiled by the Ecological Fund Office,EFO (Office of the Secretary to the Government of the Federation (OSGF) in Abuja.

Newsdiary Online can report from the content of the official account  that the Federal Government’s decision to dump the German firm   was arrived at after  the report of a technical committee  the SGF set up on the several proposals on the project recommended an alternative technology considered more suitable than what the German offers. The  technical committee the Kano project had UNIDO its technical adviser appointed by the Federal Government.

OSGF’s   “Clarification”  begins

The Federal Government’s rejoinder titled:Clarification: Diplomatic Backlash, Legal Tussle   Loom As Federal Government Dumps German   Firm Over Kano Projectbegan with these words,  “Our attention has been drawn to the above captioned news item attributed to News Diary Online, dated 11th November, 2019, alleging the wrongful award of Contract for the Establishment of an Integrated Pollution Management Facility at Challawa, Sharada and Bompai Industrial Areas of Kano, Kano State (Phase 1).

Continuing the rejoinder noted, “The news item as reported alleged the following:“ that Messrs Deutsch Africa had developed in collaboration with Bremen Overseas Research and Development (BORDA) and the University of Bremen, Germany, and the Kano State Ministry of Environment, a Decentralized Solid Waste Management System (DESWAM) technology and Community Based Sanitation (CBS);

“Deutsch Africa Limited Company proposed a solution to tackle environmental hazards resulting from waste effluent from the tanning and textile industries in Challawa, Sharada and Bompai Industrial Estates of Kano State;

“Deutsch Africa conducted the preliminary research in conjunction with Kano State Government beginning from 2010 or thereabout;

“In addition to the technology solution, the company also claimed that it proposed to co-fund the project implementation with the Federal Government through the Ecological Fund Office, in the ratio of 1/3 (for Deutsch Africa) and 2/3 (for the Federal Government);

“Based on the foregoing Messrs Deutsch Africa holds the view that the Contract for the implementation of the Project ought to have been awarded to it through a selective tendering or direct Contracting and not to any other company, including Messrs Alps Global Links Limited.”

FG’s “facts” on the project

The rejoinder said, “in the overarching public interest, it has become pertinent to clearly present the facts of the matter as contained in our records for the entire transaction.

It said, “Following series of complaints about the effects of increasing pollution from industrial activities discharging into the Challawa and Salanta rivers and Jakara dam from Challawa, Sharada and Bompai Industrial Areas respectively, the need arose for an intervention. The complaints centered on the waste effluent from these industries which are subjected to natural decomposition in the environment thereby making the health, agricultural and economic losses enormous;

According to the OSGF, “The public outcry on the resulting ecological challenge triggered the interest of many solution providers. Amongst others, the EFO received technology-based proposals and cost estimates from several companies/entities, proffering solutions for treating the effluents.

These companies/entities were listed in a table including the proposed technology each company planned to deploy

S/NO. COMPANIES/ENTITIES PROPOSED TECHNOLOGY
1 FMEnv  2002 Carried out Studies on the problems
2 UNIDO  2003 CETP
3 BORDA/Deutsch Africa Marketing in 2008 under NCEP DEWATS
4 BORDA/Deutsch Africa Marketing Reviewed in July, 2016 DEWATS
5 NARICT Nov. 2016 DEWATS FENTON
6 Millcon & Millcon Consult Ltd. Nov. 2016 DEWATS BIOFILTRATION
7 ‘’ FENTON TREATMENT
8 Osprey Group Dec. 2016 DEWATS FENTON
9 Archivisual  Solutions Ltd. March, 2018 TREATMENT PLANT

(Table above shows the various companies that have made proposals –Source: Document released to Newsdiary online by EFO,OSGF).

The Technical Process: The  UNIDO angle 

The OSGF also said in its response to Newsdiary Online story that “In line with due process and in keeping with the objective of finding a sustainable solution, government constituted a Technical Committee with membership drawn from EFO, FMEnv, Kano State Min. of Envr. and UNIDO;

It “Appointed the UNIDO as a technical adviser given its over three decades of experience with leather-based industries development  programme. The Technical Committee reviewed all previous efforts, cost effectiveness and international best practice with a view to proffering a Best Applicable Technology (BAT) for a sustainable end-to-end effluent treatment.

The OSGF added that “Drawing from outcomes of extensive studies of international best Practice/country expensive in comparable industries in jurisdiction such as kenya, India, Ethiopia, Austria, etc, the Technical Committee (TC) recommended the central effluent Treatment Plant (CEPT) which UNIDO had deployed in over 40 Countries around the World, as the prefered management model for Kano tanneries and textiles effluent treatment.

In order “To arrive at the choice of technology, the Technical Committee (TC) Juxtaposed the technologies (Centralised and Decentralised) proposed by different companies/entities as shown in the table below:

S/N CETP (CENTRALIZED) DEWATS (DECENTRALIZED SYSTEM
a.             b.       c.         d.                 e.             f.           g. Centralized collection system that collects wastewater from many waste water producers to a centralized effluent treatment plant outside the tannery clusters. Especially in an Urban Areas such as Kano.   It is an off-site effluent management system.     Current best applicable technology around the world and it is linked to the development of urbanization and life style in urban areas such as Kano.   CETP has been successfully deployed to large industrial clusters such as tanneries, textiles and other industries that discharge heavy metals such as chromium.     In a CETP, primary treatment is a physico – chemical process (solids and chemicals can be removed).         The end products (treated effluent) is deployed for irrigation).         CETP can provide treatment for a minimum of 5000m3 of effluent per day. Tannery/Textile clusters in Kano averages 15,000m3 per day. Wastewater Management System which collects/treat and disposes at or near the point of collection.       It is an on-site effluent management system.     It was historically common until the end of the 19th century when CETP became the preferred strategy.   It has been successfully deployed to hospitals, hotels, schools, orphanage, markets and a range of agro-businesses. There is no evidence of its deployment to tannery clusters.     Deutsch Africa Company did not indicate primary treatment capability of DEWATS. The DEWATS process is just physical removal of settable solids only.   Treated wastewater is dis-charged in open land, which would generate mosquitos, facilitate the growth of algae and is always having some odour.   DEWATS provide treatment for a maximum of 1000m3 of effluent per day.
h.       i. CETP would result in the lowest plant construction cost per treated volume of wastewater.   The current proposed cost for CETP solution for the three Kano effluent sites is N5.134 Billion   DEWAT may result in up to five times cost for the required effluent treatment.   DEWATS proposed solution in 2016 for two of the three sites is N8.878 Billion.   Wetlands need to be constructed for the ‘’secondary’’ treated water to pass through underground for the plants to ‘’purify’’ before discharge into the river. This is underutilization of arable land for food production.

(Table source: Document released to Newsdiary Online by  EFO,OSGF)

Officials drew attention to  the fact that “CETP would result in the lowest plant construction cost per treated volume of wastewater.

According to them and as shown in the table above, “The current proposed cost for CETP solution for the three Kano effluent sites is N5.134 Billion.

This contrasts with the fact, according to the official document, that “DEWAT may result in up to five times cost for the required effluent treatment.

“DEWATS proposed solution in 2016 for two of the three sites is N8.878 Billion.” In essence, the official view is that the DEWAT proposal is not cost effective.

Kano project: How two categories: Equipment/Technology and Civil Works Emerged

Given the facts above, the FG further outlined  some fundamentals issue drawn from the UNIDO-led Technical Committee’s Submission thus: “that in line with Technical Committee submission, the project execution was designed in Phases and categorised in to (a) equipment/technology and (b) Civil works.

“That UNIDO as Technical Advisors has the obligation to deploy the CEPT technology for the project.”

OSGF has also insisted Due Process was followed on contract award.

“Due process was followed and the No Objection of BPP was obtained before the Contract for the civil works was awarded to Messrs Alps Global Link Limited, a company already captured in the database of the EFO and  had demonstrated competency in handling ecological projects;

It also said “Deutsch Africa never submitted any bid to participate in the civil works components;

According to the OSGF, “the claim of Deutsch Africa Company Ltd that a joint Committee of the Federal Ministry of Environment and EFO had recommended the award of the contract for the project to it is untenable and lacks merit as the said Committee was neither in charge of the procurement nor a part thereof;

Furthermore, the rejoinder said, “Ecological Fund is a special fund deployed at the absolute discretion of Mr. President to intervene in national environmental and ecological emergencies as may be considered expedient. It is therefore apparent that ‘counterpart funding of projects’ claimed by Deutsch Africa was never contemplated by the Federal Government as there was no relationship whatsoever. In addition the Counterpart Funding proposed was the proposal to train 500 staff of the textile and tannery factories. It is neither in cash nor equipment(.) Furthermore, the factories do not have up to 500 staff.

“Deutsch Africa company ltd. submitted two proposals in 2008 and 2016  containing financial estimates set at  N6.678 billion and 8.878 billion respectively for two of the three sites. These financial proposals far exceeded the global government project cost for all three sites put at NGN5.134 billion.”

Officials of government who spoke with Newsdiary Online made government’s position clear, and that was reiterated in the rejoinder that “Deutsch Africa Company Ltd. could never have been in contention for the civil works as the company registered with the CAC as Consultants and not contractors.”

FG’s rejoinder also revealed that “Nothing in the interaction between Deutsch Africa and the EFO, leading up to their petition, is capable of creating a legally binding relationship between the company and the federal government, in that the company is just like any other entity that submitted proposals for consideration.

The rejoinder equally said “Available records at the Bureau of Public Procurement (BPP) shows that Deutsch Africa Marketing Company Limited is registered as a consulting firm and not a Contractor. There is also no evidence to show that the company had executed any job(s), either as Consultants or Contractors, in Nigeria.

Further, the OSGF said, “By government regulation, payments for Contracts are based on Interim Payment Certificates (IPC) issued by the project Consultants. In the present instance, government has only paid the first Interim Payment Certificate while the second IPC is still undergoing processing. These payments are legitimate based on milestones in the agreement and could never have been suspicious in any manner.”

According to the OSGF, “Deutsch Africa Marketing Company Limited was never part of the process ab initio and never (bidded) for the job with EFO. Accordingly, the SGF could not have forwarded its name to Mr President while applying for funds for the project.

“In Conclusion, it must be emphasised that transparency and due process were strictly observed in the technical selection process leading to the award of contracts for civil works. The EFO settled for CEPT based on its diverse deployment globally and cost effectiveness.”

The rejoinder to Newsdiary Online also said, “For emphasis, the Federal Government never had any formal relationship with Messers Deutsch Africa Company that could have warranted counterpart funding.

“The Office of the SGF shall remain undeterred and focused on the delivery of public goods to Nigerians at all times. It shall remain open and committed to keeping members of the public adequately informed so that spurious claims would never have any space in our national affairs,” the rejoinder said finally.

EFO responds to Deutsch Africa’s petitions to AGF, BPP

Official documents also made available to Newsdiary Online by the OSGF  showed that the Ecological Fund Office EFO had responded to petitions sent by Deutsch Africa to BPP and the Office Attorney General of the Federation,AGF .The German firm asked the respective offices to intervene in the saga.The points raised by the EFO in its response to BPP and AGF were fundamentally in line with the facts stated in FG;s rejoinder rejoinder to Newsdiary Oline about how UNIDO-led technical committee’s report knocked off the German firm.

Among other facts, however, the EFO told the AGF about the fact that key stakeholders like Kano State Government, Kano State Ministry of Environment, Federal Ministry of Environment had “carried out several preliminary studies and made different recommendations and varied costs which continued to increase with inflationary trend

The PS EFO told the AGF,“You may also know that no further action was taken on the matter of Kano Effluent until April 2018,when the Kano State Commissioner for Environment visited the EFO and introduced another Company proposed for the project – Archivisual Solutions Ltd.(See Annex III for the letter introducing Archivisual Solutions Ltd)”.

“On account of the foregoing, the SGF gave a fresh impetus to the search for  a sustainable solution in May, 2018 by approving  the constitution of a Technical Committee with membership from EFO,Federal Ministry of Environment,Kano State Ministry of Environment and UNIDO.This  was followed by the appointment of UNIDO as the Technical Adviser given their wealth of experience  with leather-based industry development program since 1971, and also the engagement of a competent Management Consultant with appropriate Terms of Reference.

The EFO asserted therefore that, “the claim of Deutsch Africa Ltd/BORDA with regards to a close collaboration with Kano State Government is not supported by available evidence,especially having regard to the fact that the same Kano State Government, in 2018, recommended a different Company,Archivisual Solutions Ltd , as its preferred Contractor to provide the remediation solution to the Effluent problem”.

The AGF was also told that, “ it has been established that the DEWATS technology proposed by Deutsch Africa, is no longer the Best Applicable Technology (BAT).The table in paragraph 8 clearly shows that CETP is the BAT and a more cost effective technology; and” the reply  to the AGF’s enquiry continued, “nothing in the interactions between Deutsch Africa and the EFO,leading up to (these) petitions, is capable of creating legally binding relationship between the Company and the Federal Government, in that  the company is just like any other entity that submitted proposals for consideration. This is more so as the technology proposed by Deutsch Africa is no longer relevant to the project.”

The PS, EFO also  told the BPP among other facts, that adopting direct procurement method  for the project “as wished by Deutsch Africa would jettison the spirit of Accountability,Transparency,Value for Money and Competition as enshrined in Section(1b,d,e, & f) of the PPA,2007.”

EFO further argued that”Messrs Alps Global Link Limited had  demonstrated competency in handling Ecological projects with Ecological Fund Office in the past and was among the companies cleared by BPP in the letter of “No Objection” granted to the Office for the execution of 3rd Quarter 2018 Ecological Intervention Project.”

The EFO  noted that, “available records at the Bureau of Public Procurement(BPP) shows that  Deutsch Africa Marketing is registered as a consulting firm not a Contractor.Added to this is the lack of evidence that the company has executed any job(s), either as Consultant or Contractors in Nigeria.It would therefore amount to an awful disservice to the Country to use such a huge project as a test case.”

It concluded that, “the EFO could not have settled for DEWATS  Technology which is yet to be deployed to any known Tannery site(s) unless the Kano sites were to  serve as  laboratory guinea pigs

“The alleged ‘adoption and recommendation’ of Kano State Government would not have been satisfactory reasons for the Federal Government to adopt a solution (DEWATS) that is neither sustainable, cost effective nor the Best Applicable Technology(BAT) to meet the identified challenges at the Kano tannery and textiles sites”, the PS, EFO  told the BPP.

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