Home News Senate berates Saipem over breach of Local Content Act on Train-7 gas project

Senate berates Saipem over breach of Local Content Act on Train-7 gas project

by OtownGist

The Senate Committee on Local Content has expressed displeasure at Saipem Contracting Nigeria Limited, a company handling the Train-7 gas project, for what it termed “deliberate breach” of Nigeria’s Local Content Act.

The company’s management has been evading appearances before the Committee until Wednesday after the panel threatened to compel their appearance with sanction.

However, the panel, chaired by Senator Teslim Folarin, after inference from evidence made available to the panel, demanded an explanation from Saipem Contracting Company why the gas project company awards contracts to foreign companies for supply of steel, rods, among other materials for execution of the project contrary to local firms in clear breach of LCA.

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According to the Committee, they have been flooded with petitions from the public over the sharp practices of the company in connivance with some Nigerians.

The Committee said it was based on that the Train -7 gas project was invited while pointing out the breach of the local content act on the award of contract for the purchase of items for the gas project.

The Committee however regretted the non-appearance of Nigerian Liquified Natural Gas (NLNG), Nigerian Content Development and Monitoring Board (NCDMB), Saipem and Daewoo, which they said their appearances would have deepened investigation on why foreign firms habitually shortchange the nation.

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It rescheduled the meeting and asked the Committee Clerk to issue fresh letter of invitation to the absentee organisations.

Senators Folarin and Sabi Abdullahi in reference to a petition pointed out that Saipem management is aware of contracts to foreign firms than Nigerian companies for supply of materials running into millions of euros in breach of the provision of the local content act.

Teslim said: “Can you explain, how you came about awarding the contract for the supply of steel for 4 million euros, to TK Corporation, a Korean company, and 4.27million euros, contract to another Korean company for pipes, 3.86 million euros to an Italian company and another 5.5 million euros.

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“All these are not Nigerian companies.”

He said the local content act provided for 50 percent Nigerian content in the execution of the project.

In his response, the Managing Director of Saipem, Mr Walter Peviani said execution of the project by the company was based on a contractual agreement, and documents presented to the company by the NLNG and the NCDMB.

“Within the contractual documents, which we received, entailed, a project Nigerian content plan and entry procedures for Nigerian companies compliance certificate,” he said.

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Unfortunately, the Executive Secretary of the National Content Development Management Board was absent despite invitations, a development, the Committee said was deliberate and suspicious.

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