House of Rep, Deep Blue Project Contract and Recurring Allegations of Fraud

The House of Representatives Committee on Navy recently announced February 22 as the commencement date for another round of probe of the Deep Blue Project awarded to an Israeli firm, HSLI Limited.

The House committee had in November 2021 resolved to probe the contract which is the project of the Nigerian Maritime Administration and Safety Agency(NIMASA) and the Federal Ministry of Transport.

The Committee made its intention known in a letter dated February 9, signed by its chairman, Hon. Yusuf Adamu Gagdi, and communicated to relevant agencies including the Nigerian Ports Authority (NPA).

Allegations of fraud, subversion of due process, and other numerous complaints have not ceased to dog the award of the contract since 2017 when it was awarded. The 8th national assembly had picked bones in the contract right from its conception and award. The serious opposition mounted by the House had led to the cancellation of the contract by President Muhammadu Buhari the first time it was awarded. However, it was re-awarded following intense lobbying and marketing by the Minister of Transportation, Rotimi Amaechi.

After years of delay, the Deep Blue Project was launched on June 11, 2021 by President Buhari. But even with the launching, allegations have continued, and the House of Representatives members have refused to let go of the contract which they see as less than transparent and fraught with violation of due process.

Why Recurring Legislative Probe?

The House said it wants to investigate the legality of the Deep Blue Contract agreement, “whether it is in line with extant laws and regulations”, and the standard of all platforms purchased for the Nigerian Navy to “determine whether they are according to specifications.” That is the mandate given the House Committee.

The committee is also to determine the actual amount of money spent by the Federal Government on the Deep Blue project contract and “any other matter” relating to it. The committee was given eight weeks to report back to the House for further legislative action.

The House is peeved that the Deep Blue Contract was never captured in any Appropriation Act, alleging that those behind the contract illicitly financed the project from the Cabotage Financing Fund, a dedicated Fund set aside to increase the capacity of indigenous shipping companies.

The House is also worried that the payment of N59,839,930,000 made to the foreign company is astronomically higher than the annual capital expenditure budget of the Nigerian Navy, which was N27.2bn in 2019; N20bn in 2020; N26bn in 2021 and approved the proposal of N27bn in 2022.

A member of the House, Benjamin Kalu, who moved the motion at a plenary session on which the resolution for the investigation was based, said among other things:

“The House is disturbed by allegations that HLSI has purchased more security surveillance equipment that was not in the original contract, thereby covertly using funds meant for the benefit of Nigeria and Nigerians to finance the security acquisitions of a foreign entity.

“The House is also disturbed that the standards of most of the platforms are not good enough, which has also violated the contract agreement as it was alleged that some of the ‘newly procured ships have to be towed by Navy before they could even arrive in Nigerian waters.”

Kalu recalled that the Federal Ministry of Transportation, on July 27, 2017, and on behalf of the Federal Government of Nigeria, entered into a contract known as the ‘Deep Blue’ contract of $195,300,000, an equivalent of N59,839,930,000, with a foreign private company, HLS International Limited, for the supply of certain security and surveillance equipment and systems.

He said HLSI was also to establish the Integrated National Coastal Surveillance and Waterways Protection Solutions, with command and control of infrastructure in the nation’s territorial waters.

In addition to the contract sum of $195,300,000, Kalu said, the Nigerian Maritime Administration and Safety Agency agreed to pay the sum of $19,530,000 to HLSI as ‘Management Training Consideration,’ while according to Appendix 4 of the agreement, both sums would be paid in monthly installments over a period of 36 months from July 2017 to June 2020, as further payments were also made as of July 2017 to date.

Citing Section 80(3) and (4) of the Constitution, the lawmaker stated that the National Assembly is the only body constitutionally allowed to authorize any expenditure from all public funds of the Federation.

Kalu maintained that the National Assembly “has neither authorized nor appropriated any monies for the Deep Blue contract or any monthly expenditure, according to the foregoing payment schedule.”

The lawmaker recalled that the 8th House investigated the deep blue contract, following petitions from civil rights groups that the contract was fraught with sharp practices. He also recalled that in March 2018, the Committee on Public Petitions recommended an outright termination of the contract for violating appropriation laws, as it was not in the national budget.

He added, “The Deep Blue contract has since its execution, attracted public outcry regarding the grave national security implications of ceding the patrol of waterways from the statutory duties of the Navy to a private foreign firm, thereby undermining national sovereignty and security, following which President Muhammadu Buhari terminated the contract in 2018.

“The House is concerned that despite the foregoing, the Deep Blue contract has remained illicitly financed with monies neither appropriated nor authorized by the National Assembly.

Substandard Platforms?

The House said it is disturbed that the standards of most of the platforms supplied by HSLI International Limited “are not good enough” … and that it was alleged that some of the ‘newly procured ships have to be towed by Navy before they could even arrive in Nigerian waters.”

To lend credence to this weighty allegation, there have been reports that most the assets are still resting at the naval base in Lagos, and have not been deployed to sea where they should be combating piracy and criminality.

Pirates and criminals are still waxing strong on Nigerian waters despite the launching of the Deep Blue project which the country had boasted would bring an end to piracy and all forms criminality on Nigerian waters and the Gulf of Guinea. The procured platforms are yet to be seen in action. Some of the air and sea assets are reported to be still stationed in Lagos where they were received.

Observers attribute the drop in the rate of piracy in the Gulf of Guinea (GoG) to the presence of foreign naval forces which have been patrolling the sea lane.

More Spending

Curiously, while still in idle mode, the federal government, not long ago, approved the sum of N6.3billion which it said was to be used for procurement of equipment and training of personnel for the Project, some claim it is for “logistics support” for the project. Observers have questioned this extra expenditure on an already over-valued contract which originally covered procurement of assets and training of personnel.

Not done with expenses, most recently, there has been another approval of N2.7billion which, according to NIMASA DG, Dr. Bashir Jamoh, is for the clearing of outstanding assets of the Project.

Obviously, what might be driving the endless allegations and probes of frauds in the Nigeria’s House of Representatives, is the suspicion that Deep Blue Project is designed as a conduit pipe.