© 2018 - International Centre for Investigative Reporting
INVESTIGATION: Why Osun MKO Abiola airport failed (2)
In the second part of this investigation, KEMI BUSARI explores the integrity and history of a firm that got the concession for the Osun airport and the Turkey connection to the whole scandal.
Read the first part of the investigation here.
NOT only does the company (AWOL) that got the Osun airport concession not have any experience whatsoever, it is also not known in the comity of aviation engineering companies.
In an email response to Premium Times, Centre for Aviation (CAPA), a global network source of market intelligence for the aviation and travel industry, said it has no traceable record of any company named AWOL.
“Our profile on AWOL reflects publicly available information. And we recognise AWOL only on the basis that it was reported to have received the airport concession and we do not have any traceable records on the company.
“Our level of knowledge of this particular matter only goes as deep as the available news sources provided in October 2017. We published one news item on the reported granting of the concession and established a profile for AWOL on our site, as we do for all relevant aviation-related entities.
“CAPA provides members with access to more than 400 news briefs each day, as well as analysis reports, research publications and a comprehensive data centre with extensive company profiles, MRO data, airline and airport databases, and more.
“Our profile on AWOL reflects publicly available information and we recognise AWOL only on the basis that it was reported to have received the airport concession and we do not have any traceable records on the company,” Peter Hickling, CAPA’s Manager of Data Integrity wrote.
AWOL deceived Osun Govt. – Commissioner
Mr Salami said Mr Ogunlade won the contract with juicy promises without assurance of funding, a situation which led to his inability to deliver. He noted that works on the project had reached 39 per cent before the concession.
“The concessionaire did not have the financial capacity to do the job. That was the reason for the failure. He deceived the state government on October 26 when we just had a MoU. He promised that in eight months’ time, he would deliver the first phase of the project. He promised heaven and earth. He even promised a maintenance wing, where other people will be able to maintain faulty aircraft, which will be a source of income to for the state.
“The kind of promises that he made with his sweet mouth, you would believe it would be the best in the country. Unfortunately, he doesn’t have a dime. He failed and that’s why the concession failed.”
Mr Kazeem said the contractor had done ‘nothing remarkable’ on the site before termination of the contract. He added that work had reached 39 per cent completion before the concession.
“Nothing remarkable,” he replied to inquiry on AWOL’s effort so far. “We told him to work on the runway. The site clearance that he said he did was not the place we said he should work on. There used to be an existing runway which they used to lift soldiers during Second World War. He cleared that (runway) but that’s not what we asked him to do.
“We were almost at the final level of the base course before he came in and said they would increase the scope. There were lots of promises. Most of the time you see us talking confidently that in eight months’ time there will be…but he failed.”
Mr Kazeem emphasised that the state government incurred no financial implication on the concession.
Like AWOL, like BIRAY Group
Even if the Osun State government had awarded the contract directly to Biray Group, AWOL’s supposed technical partner, desertion would have been its destined fate. The project would not have fared any better.
AWOL had chosen Biray as its abettor firm in order to access fund from the Exim Bank of Turkey.
Purportedly established in 1985, Biray Group had engaged in construction works in Turkey, Nigeria and other countries.
Checks however revealed that the company has never executed any aviation project before.
The company on its website www.biraygroup.com listed as ‘work we have already realized and the areas where we can offer solutions,’ to include “Residential Construction (Housing), Eco-Friendly Buildings, Industrial Construction, Shopping Mall & Hotels, Stadium & Sports Complexes, Highway Construction and Landscaping Layouts.”
Contrary to information on its website, the company does not have a regional office in Nigeria.
On July 2 when this reporter set out in search of the regional office, he later realised that the Plot MF 15, Murtala Mohammed Expressway, Abuja / Nigeria quoted on the website belongs to partner firm; Turkwin Nigeria.
One of Turkwin’s staff informed this reporter that Biray now “uses their residential building as office.” She linked this reporter with Salih Kebelek, Biray’s Technical Director and a key player in the signing of the agreement with the Osun government.
When this reporter visited the following day, Mr Kebelek who had earlier agreed to an interview with this reporter, reneged on his promise.
“What is your business with that? You are a journalist but I don’t have to give you all information,” he snapped at this reporter in response to question on the nature of agreement with AWOL.
Asked why he would not answer questions on the projects, Mr Kebelek insinuated his caution was important because of other contracts the company may be invited to. “You don’t know in future what will happen,” he said.
“You can drop your phone number, when we start we’ll call you,” he said walking away from this reporter.
Why EXIM Bank refused to grant loan
But for the fact that Exim Bank of Turkey refused to grant AWOL loan, perhaps, the company would have been able to prosecute the project. It was agreed at the signing stage that the project would be fully-funded by AWOL through loan from the Exim Bank. This reason, again, explains why AWOL chose Biray Group, a Turkish construction firm as partner.
However, AWOL was not able to access the loan from the bank for reasons AWOL, Biray Group and the bank refused to divulge, and which the state government refused to give through a FOI request.
Exim Bank did not reply to multiple email enquiries by PREMIUM TIMES. However, a researcher who has worked widely on the airport project, Inwalomhe Donald, said the company could not access the loan because it failed to comply with relevant laws in Turkey.
Mr Donald was referring to Turkish ‘Law No. 4501 on Principles That Shall Be Complied with When There is Access to Arbitration for Disputes’ which states the process of arbitration for disputes arising from concession contracts.
The aim of this law is to determine the principles and procedures that shall be complied with where public service concession contracts contain access to arbitration for disputes arising from these contracts.
He noted that for any concession to succeed in Turkey, with or without loan, provisions of the law, enacted on January 21, 2000, must be fulfilled and legally binding.
“Government has fulfilled its own side by signing the N69 billion concession. This will be the first because we’ve never had an airport built by a private firm in Nigeria. It has never been done but unfortunately, AWOL and its group have problems.
“In Turkey, every privatisation agreement must pass through that law. Once it doesn’t comply, the company will not succeed. The problem now is between AWOL and its partners, it has nothing to do with the state government,” he said.
The law limits the type of collateral that borrowers may be able to offer and the parties’ contractual agreements over the security package. In Article 3(a), the law stipulates that dispute arising from a concession contract that contains a foreign element may be settled:
“(a) before an arbitrator or an arbitral tribunal, which will sit in Turkey, and which will apply either Turkish or foreign law.”
Analysts have however expressed worries over its application as, more often than not, the Turkish law is applied and Turkish partners hide under the law to get undue advantages of concession.
Had AWOL had a legal agreement with the company, it would have taken a court process to terminate the agreement as stated in Article 15 (a).
“First, the award can be cancelled on limited grounds if brought before the courts within 30 days running from the date of notification of the award. Article 15/A of the Law stipulates reasons for cancellation as follows:
(i) Reasons to be proved by the applicant party:
(a) A party to the arbitration agreement was under some incapacity; or the said agreement is not valid under the governing law or, failing selection thereof, under Turkish law.”
Retributors for breach of procurement law
The Head of Media and Publicity of the Infrastructure Concession Regulatory Commission (ICRC), Manji Yarling, told PREMIUM TIMES the agency was not involved in concession of the Osun project as the federal government had no stake. She said a concession as such must go through the state procurement law with supervision from assigned agency.
“Usually, states have their own procurement laws and they can do their PPP without coming through the ICRC. The only time they have to come through ICRC is if the federal government is giving a guarantee. That is if they are taking a loan (from the federal government),” she said.
The Osun public procurement law in sections 71, 72 and 73 states retributions for offences committed in the line of procurement in the state.
Section 71(3) of the law clearly states the retribution for individuals who worked in disagreement with the provision of the law.
“Any person whilst carrying out his duties as an officer of the Agency, or any procuring entity which contravenes any provision of this Law and its Regulations commits an offence and shall be liable on conviction to a cumulative punishment of: (i) a term of imprisonment of five (5) years without option of fine; and (ii) summary dismissal from government service.”
In subsection 5 of the same section, the law prescribed minimum of three years imprisonment for directors of companies that acted in contravention of the act.
“Where a Corporate body or firm is convicted pursuant to subsection (4) of this section, every Director of the Company shall be guilty of an offence and is liable on conviction to a term of imprisonment for not less than three (3) years but not exceeding five (5) years without an option of fine unless he proves that the offence upon which the conviction was based was committed without his knowledge, consent or connivance,” the law states.
Ogunlade threatens this reporter
All efforts to get comments from the CEO of AWOL, Mr Ogunlade, failed. For over two months since first contact in June 26, staff of the company and Mr Ogunlade himself frustrated efforts to pin him down for an interview.
This reporter paid a visit to AWOL’s office at 86, Ofatedo/Ede Road, Ofatedo, Osun State, on Tuesday June 26, and observed that the company has no visible sign of machinery normally used by engineering companies.
Three members of staff, who all declined to comment on the project, informed the reporter that Mr Ogunlade was out of the country and would not grant a phone interview or have questions sent to him in a mail.
“Our boss is the only one who can grant anybody access to the site but he is not in the country now,” a staff who simply identified himself as Anu, told this reporter.
This reporter kept calling Mr Anu to ask if his boss is back, but each time, he got the same answer; ‘he is not around yet.’
On Sunday July 22, after several follow ups, the Personal Assistant to Mr Ogunlade, Theresa Eniola, informed this reporter his boss was back in the country. However, Mrs Eniola said would not arrange an interview with him.
Pushing further, this reporter visited AWOL’s office again on Tuesday July 31 and conversed with a staff on the importance of having AWOL’s side of the story. It worked, but not quite.
On Thursday August 2 when this reporter finally got Mr Ogunlade on phone, he pleaded that the story be held for two more weeks when he was willing to grant an interview.
“I appreciate what you are doing but I can’t grant any interview now,” he said.
When this reporter informed him of prior efforts to get his side of the story and thereafter declined his request of delaying the story, he threatened legal action against him and his media house.
“I wouldn’t want you to publish anything whereby…because if you publish anything which doesn’t go down well with my company, our lawyers also will seek redress in the court of law,” he threatened.
Community still hopeful
Despite the challenges and eventual abandonment of the project, the Ido-Osun community is still hopeful an international airport will still take off in their backyard. However, they cannot ascertain when that will happen.
The traditional ruler, Emmanuel Abidogun, Olu of Aduramigba, Odi-Osun, said the nature of contract matters less to residents. He said the joy of having an airport still envelops their thoughts.
He captured the mood of residents when work started on the site.
“When they started work on the project site, the whole community was joyful. Both the old and young prayed for him (Mr Aregbesola). The land has been abandoned for a long time. We couldn’t develop it, we couldn’t sell it. We couldn’t even go there because it belongs to the government.
“If you see the kind of stones they brought to the site, we knew they wanted to really work and thought it would be completed but when everything died down again, the joy now waned. It created confusion as we don’t know where the situation is going.
“There is nothing we can do more than to continue to pray for them. The award of contract doesn’t matter to us, what we want is its completion. How it will come to reality is our prayer for them. What we are thinking is that this expanse of land should turn to airport. The model brought by Mr Aregbesola is beyond our imagination and we can only pray he fulfills it.”
While addressing a news conference in November 2017, Mr Ogunlade, the AWOL chief, said the projects would provide about 10, 000 jobs during construction and 2,000 after completion.
For this benefit and others, Mr Abidogun believes the airport will eventually be concluded despite the challenges.
“When they brought caterpillar there and we saw the rate of work, if they said all residents of Ido-Osun should come there and work, all of us will go, or if we have money somewhere, all of us would have contributed and given to government to complete it. That’s to tell you how much we envisaged its benefits to the community. If it is the police station that will be there, many banks, every offices, everything. Ido-Osun and neighbouring communities will change. But we believe that this will come to reality one day.”
However, until a new way of funding the airport project, perhaps with a new concessionaire, is found, the dream of having a record-breaking airport will continue to elude Osun State.
* This investigation was supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting (ICIR).