Contract Crisis: Witness Tells Court How NLNG Owes Macobarb N5.074bn

PORT HARCOURT – An expert witness, Prof. Yohanna Jugu, a Senior Partner at W.J. Jugu & Co., based in Jos, Plateau state, has told a Rivers state High Court sitting in Port Harcourt, how the Nigeria Liquefied Natural Gas (NLNG) is owing its contractor, Macobarb International Limited, the sum of N5.074bn.

Jugu, a professor of forensic accounting, told the court that he computed the owed sum from the contract document and performance history of contract number B130142PPI (Access control contract) awarded by the NLNG to Macobarb in 2014.

He affirmed to the court presided over by Justice Chinwendu Nwogu, during cross-examination on Monday, that he relied on Sections 2, 7, 8 and 9 of the contract to calculate the liabilities creditable to Macobarb by the NLNG, noting that Section 9 is the Macobarb Bill of Quantities.

He 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”.

Prof. Jugu also agreed when the lead defence counsel, Prof Mayo Adaralegbe, in the suit marked in the suit marked PHC/2013/CS/2022,

read out Subsection 12 (4) to show that any inferior materials or items supplied by the contractor shall be at the contractor’s account.

“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 a delay in the 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 Contract is on engineering design because according to him is elementary in design.

The defence counsel, Prof. Adaralegbe who drilled the witness for hours asked the witness if he was aware that the contract was terminated sometime in November 2015.

In his response, the witness said he saw a document like that, but 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.

Prof Adaralegbe, however, 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 the witness affirmed it was for a job done that was not paid for, and the breaches that occurred from the contract.

The witness further told the court that if he was mandated to calculate the time value of money arising from the contract crisis, that he would get another N800m to be compensated.

The fireworks which raged for hours prompted the presiding judge, Justice Nwogu to remind the two professors that they could profess all they knew, but that he would dwell only on the law.

Macobarb International Limited, an indigenous contractor had dragged the NLNG to court claiming over N1bn (now amended to N5.074bn) for alleged breaches to a contract (B130142PPI, Access Control) in the NLNG plant area with three years duration.

Macobarb in its claims said the contract also forbade delay of any kind in the project and provided for a penalty on whoever caused the delay. It also provided for an alert system should anything want to cause a delay.

Macobarb said it activated the alert clauses when payment delays began to happen, but that nothing was done to rectify the delays until the contract was terminated.

The judge at the end of the cross-examination, adjourned the matter till October 29 for continuation of the hearing and cross-examination of the managing director of Macobarb, Shedrack Ogboru, who is expected to tell the court what happened in the controversial contract from the witness box.