A professor of Forensic Accounting and Auditing, Professor Yohanna Jugu, has told a Rivers State High Court, sitting in Port Harcourt, how the Nigerian Liquefied Natural Gas Limited (NLNG), came about owing N5.074billion to an indigenous contractor, Macobarb International Limited.
Jugu, who is senior partner at W.J Jugu & Co, Jos, told Justice Chinwendu Nwogu that he (the expert) worked out the indebtedness from the contract document and performance history of number B130142PPI (Access control contract) awarded by the NLNG to Macobarb in 2014.
He told the court that he relied on Sections 2, 7, 8 & 9 of the contract to calculate the liabilities creditable to Macobarb by the NLNG. He also noted that Section 9 is the Macobarb Bill of Quantities.
The financial expert further agreed with the defence counsel who read out the content of Section 7, subsections: 5.11, 12.4, 13.2 thus: “If, by reason of any failure or inability of the engineer, the Company’s Representative and/or the Company to issue within a time reasonable in all the circumstances any drawing, instruction, approval or the like for which notice has been given by the Contractor, the Contractor suffers delay and/or incurs costs, then the time for the execution of the works shall be extended accordingly and the amount of such costs shall be added to the Contract Sum”.
He also agreed when the lead defence counsel, Professor Mayo Adaralegbe, read out Subsection 12.4 to show that any inferior materials or items supplied by the contractor shall be at the contractor’s account.
Jugu said: “Such costs shall include any standing time for pending delivery of acceptable Plant/equipment/tools/vehicles. Where Contractor’s programme for the Work is delayed as a result, the Contractor shall provide additional resources to recover the time lost so as not to delay the stage completion date/s for the works”.
This was interpreted to mean that whichever side caused delay of job shall pay the added cost. The witness said this was the provision he relied on to calculate the cost of delays caused by the NLNG.
The statement he submitted and affirmed in court indicated that the only standing time not provided for in the EPC Contract is on engineering design because, he said, it is elementary in design.
The defence counsel drilled the witness for hours and asked him (the expert witness) if he was aware that the contract was terminated sometime in November 2015.
He answered that he saw document like that but that when he asked his client (Macobarb), they informed him that the termination was a breach in the sense that the ‘Contract Holder’ was the one to have terminated the contract.
Adaralegbe pinned the witness to admit that the total sum of the contract was N95m and asked the witness how he calculated the debt (if any) at over N5bn, to which he answered that it was for job done that was not paid for, and the breaches that occurred from the contract.
He told the court that if he was mandated to calculate the time value of money arising from the contract crisis, he would be compensated with another N800m.
The hearing continues on October 29, 2024, when the managing director of Macobarb, Shedrack Ogboru, would be led to mount the witness box by his latest lead counsel, A.J. Okanje, to tell the court what happened in the controversial contract.
