Delayed payment syndrome: Indigenous contractor drags NLNG to Buhari, says some others are dying

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* Warns of ‘economic implications’ of destroying local contractors

* Says NLNG uses payment denial to stifle indigenous contractors into non-performance

* NLNG washes off hands, says Macobarb failed to perform

(Culled from BD Sunday By Ignatius Chukwu)

An indigenous contractor has cried to the table of President Muhammadu Buhari asking for presidential intervention for him and other such Nigerian contractors allegedly being snuffed out of existence in the mega-corporation, the Nigeria Liquefied Natural Gas (NLNG) company located in Bonny, Rivers State.

Shedrack Ogboru, chief executive of Macobarb International, who has since tabled N1.147Bn (then) owed his company by the NLNG, has told President Buhari to compel NLNG management to resolve the matter and pay his firm so he and his workers do not die like some others. He has painted a gloomy picture of what he called ‘economic implications’ of deliberately snuffing out a set of entrepreneurs and contractors through deliberate act of ‘payment denial’.

He said a powerful group exists in the place that overrides whatever the due process system approves and end up destroying any person so marked. He said most top officials in the NLNG especially the foreign ones believe in due process and smooth operations but that a few other persons form a strange cabal that do any thing or destroy any indigenous firm without any rescue from the system because, according to him, everybody would just shake their heads and walk away.

The NLNG in response to public outcry by Ogboru had washed off its hands, saying Macobarb did not perform a project awarded to it and suffered contract termination as a result.

Ogboru however told President Buhari in a lengthy petition that ‘payment denial’ for job well done was used to knock contractors off the feet and get excuse to terminate the contract, as he said was the situation in his own case.

He said some other contractors who could not withstand the torture have died and workers belong to such targeted contractors have continued to die or fall into wretchedness and inhuman situations.

Ogboru, Delta State-born entrepreneur, had earlier told newsmen in Port Harcourt, that his firm, Macobarb International, is now heavily indebted to a commercial bank due to N68m loan obtained since 2014 to execute the first phase of the job that has turned into a protracted debt with unmentionable interest accumulation all due to the NLNG refusal to release payment.

He said the failure of the NLNG to honour payment schedules without any reason led to his firm being blacklisted by the Central Bank of Nigeria (CBN) for bad debt all because of contract liability of about N1.147Bn that the multinational corporation (NLNG) has refused to redress to this moment.

Economic implications

Macobarb CEO said the Nigeria oil and gas industry is usually closed to the generality of

the public and information of this nature is often silenced and prevented at all costs from being aired or made public such that crimes committed against individuals and Nigeria as a country are often not known, hence this privileged information should be given the attention it deserves.

He said: “The action of NLNG in unlawfully and abruptly terminating the Macobarb contract has caused Macobarb untold hardship, psychological trauma and health challenges and NLNG is not prepared to reconsider the unlawfulness of its actions.”

He narrated how he has tried amicable resolution or seek redress in many quarters but that the initial enthusiasm or sympathy usually goes cold and that such authorities begin to avoid him or even urge him to seek legal action. He said the NLNG knows that small firms cannot withstand them in court.

Hard blows:

Ogboru told Buhari that most local contractors working for the mega-corporation have been going through all manner of arbitrariness as typical of the Macobarb situation. He mentioned a company handling Road Shoulder/Car Parks Works who he claimed died over such payment strangulations on projects. He said his firm, Macobarb, participated with other local contractors on same project. Every Month, he stated, the debit alert on loan taken from a bank in Bonny Island to finance the project pelted the man. The man was so concerned, and often hospitalized and which eventually killed him.

He said Macobarb among other contractors participated in several HSE briefings on same contract (Road Shoulder Contract) and contractors (including the man now late) repeatedly drew NLNG attention to the payment problems regarding the contract and It’s consequential effects on contractors and their personnel.

He told Buhari of an instance when labourers working for such strangulated local firms would stray into the residential areas to seek daily paid menial jobs just to feed.

According to him; “It is on record in NLNG that on same project, because of Macobarb inability to pay workers for several months just as it was with the other company, a labour personnel went in search of daily paid job in NLNG Residential Area just to scrape something to feed his family. The white woman he so approached raised a

security alert for which all Macobarb personnel were barred access to the NLNG RA on the contract. NLNG investigations regarding the issue later revealed that local contractors on the contract were being owed several months of payments. It took the intervention of an NLNG engineering manager then (name withheld) who vouched for Macobarb as a highly competent and responsible contractor before NLNG Human

Resources Manager permitted Macobarb resumption of Work. The expatriate then immediately addressed the contractors’ payments backlog.”

Ogboru also told Buhari that NLNG as a lead player in the Nigerian gas sector, the company’s actions and in-actions have far-reaching implications and NLNG therefore owes Nigeria certain responsibilities. The letter said the abuse of local contractors by

withholding their payments  for no cogent reason as these instances can’t be a service to the country’s economy. “More so, when it is a known fact that most contractors solicit for loans at high interest charges for realization of contracts. This is a major challenge which has stunted the growth of most local contractors with the attendant effect that most local contractors’ contribute poorly to the nation’s economy.”

He reported that the bank that backed Macobarb in the NLNG contract job has developed cold feet with a new disposition to funding oil and gas projects in Nigeria as a result of the NLNG payments summersault in the subject contract.

He further lamented: “Macobarb and its 32 workers that the NLNG inducted for the contract and their dependants have been forced into the labour market since 2014 as a result of NLNG’s inexplicable actions. It is an open secret that most local contractors are discriminated against by Nigerians working in the industry than their foreign counterparts but for the Local Content Initiative of the Nigerian Federal Government. Most of usNigerians (contractors) now feel less confident of NLNG as a credible business entity.”

The entrepreneur further pursued: “NLNG who subscribes to international best practices, as an international player in the industry, seems to ridicule Nigeria when it portrays Nigerians as people who do not respect contracts willfully signed, as in these instances. For a fact, many Nigerian contractors have folded up their businesses, engulfed in litigations for no fault theirs just as NLNG now aims to stifle Macobarb into litigation. As in the Macobarb case being highlighted in this appeal, often contractors are forced willfully or otherwise, to take responsibility for clients failures on contracts (in this case, NLNG), to protect themselves. Otherwise, such contractors are forced to the courts to annihilate, blacklist them and are forced out of business.”

Ogboru wondered why NLNG shunned all forms of mediation and as provided in contract but insisted that Macobarb seek redress in court, probably aware of the delays and peculiarities of the Nigerian judicial system. “This attitude can only be seen as a mockery of Nigerian judiciary, which is a huge disservice again to Nigeria and this accounts for the disrespect international operators seem to have for our Judicial system. This is not what Nigeria is or should be, and NLNG should not so ridicule the country.”

He said his firm was not in the category of local contractors perceived to be incompetent based on its track record of excellent performance in over 60 previous jobs and its being upgraded to higher level. He said this was why Macobarb was found worthy to collaborate with top international high-tech companies such as Bi-Protech of Poland (A Core Engineering Company) and Assignia of Spain (A medium Term Engineering/Construction Company with over 1000 Workforce).

He appealed to President Buhari to intervene so that the FG/NNPC is not misunderstood to be encouraging the NLNG to portray or ridicule Nigerian courts as places where offending parties (as NLNG) gleefully goad their victims to seek redress after breaching their contracts, willfully avoiding the mediation provisions of its contract with a view to annihilating it’s victim in court processes. “NLNG, by it’s resources and as a Wellspring to the Federal Government of Nigeria, should not be allowed to think it can destroy any Nigerian or another Nigerian entity as Macobarb at will and can’t be reined in by NNPC/FG, and be accountable.

Cry for justice:

Macobarb’s grouse is that it delivered the first phase of the job and merited payment which he said was turned down on the strength of one man’s action in the NLNG whereas four others signed. He said the continued withholding of payment frustrated further execution of the job. He said the contract terms barred Macobarb from removing equipment or men from NLNG yard and thus incurred cost of over N1Bn in over 600 days. He said the man frustrating the job now paid the amount he declined to pay all this while and terminated the contract on ‘poor performance’ without caring to pay what the contract said should be paid in such a circumstance.

Ogboru said trapping equipment and 32 workers in Bonny for over 600 days was supposed to be paid for going by the terms of contract. This is the amount he wants President Buhari to help him get from the NLNG.

NLNG reacts

Reacting to media inquiries earlier before the matter got to the presidency, the NLNG, through Andy Odeh, its Manager, Corporate Communications and Public Affairs, stated thus: “That claims by Macobarb International Limited (Macobarb) regarding its dealings with NLNG are false and ludicrous. Macobarb was awarded the contract for Access Control to the Central Control Room, Laboratory, Shutdown Village and Gas Plant Area Improvement Project in 2014 after a competitive tender process, based on the company’s technical and commercial submissions as well as possession of financial capability and standing to execute the contract within the stipulated timeframe to the expected standards and stipulations.

“A contract was signed between NLNG and Macobarb and valued N95,479,057.86 with 18 months delivery schedule commencing in January 2014. It was never contemplated, neither was it written into the Contract Documents, that the contractor would take a loan to execute this project. The decision for any contractor to take a loan is purely on its own account and for its independent purposes. In this case, that delineation was prominent as NLNG was not privy to any loan transaction by Macobarb.

“Macobarb was unable to execute the project, thereby incurring protracted delays, despite several interventions by NLNG to help the company overcome its inability to finance the project in line with its obligations.

“It should be stated clearly that it was on this ground of non-performance, not on any act or omission attributable to NLNG or any of its personnel, that the contract was terminated in November 2015, after the date stipulated for its completion. Upon termination, Macobarb was paid N41.261m for work it was able to accomplish and the materials it elected to handover to NLNG during the close-out process.

“Therefore, there is no truth in Macobarb’ s claims that it was denied any payment. Furthermore, NLNG is not liable to Macobarb in the sum of N950 million, or any other sum that MACOBARB has claimed or will claim in different quarters, on the footing of bank charges for a purported loan which NLNG did not authorise, request, or guarantee.”

Conclusion:

If the matter does not end at President Buhari’s table, both Macobarb and NLNG may well test strengths in court. Fears are that ants cannot survive in a wrestling contest with elephants.

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