How Rivers wasted N8.54b on Karibi Whyte hospital, by perm sec

Image source 1reservior

Image source 1reservior

AFTER spending N8.54 billion on a proposed 1,000-bed Adolphus Karibi Whyte Specialist Hospital, the permanent secretary in Rivers State Ministry of Health, Somiari Harry yesterday said there is no physical structure at the site of the project.

Vital documents such as memorandum of understanding and shareholders’ agreement between the state government and Canadian-based Clinotech Diagnostic and Pharmaceutical Limited, which received the $39.2 million to build the contentious hospital are said to be missing.

Harry told the Justice George Omereji-led commission of inquiry investigating the non-execution of the 15-storey Adolphus Karibi Whyte Specialist Hospital after the payment of $39.2 million (equivalent to N4.6 billion in 2008), to Clinotech, that besides some parts of prefabricated buildings littering around, containers and other equipment, there is nothing at the site of the proposed hospital to justify the huge amount the state government paid to the contractor.

The permanent secretary explained that the mega hospital was conceived by the Amaechi’s government in partnership with Clinotech, to check Rivers people and other Nigerians from traveling abroad for medical treatment.

According to him, the concept was for the hospital to provide world-class medical services in Port Harcourt. He said the estimated cost of the project was $98 million and based on this a memorandum of understanding and shareholders agreement were signed by the parties, which required that the state government would provide 40 percent of the funding, while Clinotech would provide 60 percent.

According to him, state government paid off its own 40 percent equity valued at $39.2 m (N4.6 billion) at the time to Clinotech, which in turn failed to contribute its own counterpart funding for the project.

The permanent secretary, who told the commission that the documents relating to memorandum of understanding and agreement for the shareholding are missing from the ministry, said there are no documents to indicate that the government was advised not to pay up its 40 percent, until Clinotech, which he said claimed its international financier failed to avail it funds, had provided its contribution for the execution of the hospital project.

Harry explained that despite the demolition of the old University of Port Harcourt Teaching Hospital for the purpose of building the 15-storey hospital and failure of Clinotech to provide its counterpart funding for the project, the government did not take any action to recover its $39.2 m from the company.

He stated that instead, in 2010, the state signed another $150 million contract with Clinotech Turnkey Management Limited (a sister company) for the same project and paid additional N3.94billion being 20 percent of the $150 million.

According to him, under the new contract, Clinotech was to buy, operate, own and transfer to the state over a specified period. He disclosed that there was no public bidding process initiated by the state government for the hospital project.

He pointed out that after the payment of N8.54 billion to Clinotech, Amaechi visited the new site of the project at Igwuruta on the 5 May, 2010 to assess the level of work done and when he found out that there was no work had been done, he ordered the company to vacate the site and petitioned the commissioner of police accusing the contractor of diversion of state funds meant for the hospital.

Harry described the demolition of the old University of Port Harcourt Teaching Hospital and the payment of N8.54billion to Clinotech for a job not executed as a waste of Rivers State resources.

One of the investment managers of the Rivers State reserve fund said that the Governor Chibuike Amaechi’s administration contravened certain provisions of the law establishing the fund.

A director with Skye financial services, Mr. Dimeji Olufunmilayo, told the commission that his bank serves as a custodian of the Rivers state reserve fund and that a total of N53, 930,0000.000 (N53.9b) was withdrawn between 18 February 2014 and 26 Jan 2015 by Governor Amaechi’s administration.

He explained that the law establishing the fund requires that the state governor must give approval following House of Assembly resolution before any withdrawal could be made.

He also stated that each request for funds must be accompanied by a list of items, which the required money will be expended on. He however, admitted as custodians of the fund, his bank never saw this list for which the money was expended.

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