The House of Representatives has accused the management of Nigerian Communications Satellite (NIGCOMSAT) of violating the Public Procurement Act for three consecutive years by awarding insurance contracts worth over $500 million.
The House ad hoc committee investigating insurance companies pay out to ministries, departments and agencies (MDAs), disclosed this yesterday when the Managing Director of NIGCOMSAT, Mrs. Bimbo Alale appeared before it in Abuja.
The ad hoc committee has consequently invited the former managing director of NIGCOMSAT, Alhaji Ahmed Rufai and all former directors of finance to appear before it next Monday.
Mrs. Ale is also expected to provide all documents covering every transaction from 2013 to date.
Chairman of the ad hoc committee, Hon. Adekunle Akinlade (APC, Ogun), who presided over the session said they discovered that the contracts were not advertised as required by the public procurement act and were even awarded to unlicensed insurance brokers.
The breakdown of the amount shows that in 2013, NIGCOMSAT expended $188,883,845 million; in 2014, $168,135,252 million and in 2015, $143,775,084 million on insurance without advertising the jobs.
The grand total was $500,794,181 million. Defending her agency, Alale informed the committee that until 2016, NIGCOMSAT selected insurance companies based on a list recommended by the National Insurance Commission of Nigeria (NAICOM), adding that it also relied on approval from the president.
She said until 2016, “we never advertised. We just call for a meeting of firms recommended by NAICON and organize a workshop for them. It is after that we choose which participating firm to use”.
Responding to queries on the use of unlicensed brokers, the managing director noted that she was unaware that the firms were unlicensed and explained that most indigenous firms refused to give cover because the risk was high.
According to her: “Most of the local companies refused to take the cover because the risk is high but we have been able to split it into two. The cover is split 30 per cent and 70 per cent. 70 per cent is taken by foreign underwriters while 30 per cent is taken by local insurance underwriters”.