Court freezes Obasanjo’s N37bn health fund

Lanre Adewole, Abuja - 29.01.2008

A Federal High Court in Abuja on Monday placed a temporary ban on the operational accounts for the construction of comprehensive health centres in each of the 774 local government areas of the country.

The accounts, domiciled with the Central Bank of Nigeria (CBN) and PlatinumHabib Bank (Bank PHB), currently contain N37,199,077,876.00.

The court, presided over by Justice Babs Kuewumi, temporarily froze the accounts during the hearing of a suit filed by the project contractor, Mathan Nigeria Ltd, challenging the revocation of the contract for the project by the Federal Government.

The administration of former President Olusegun Obasanjo had awarded the contract on behalf of all the local governments in the country, with the government of President Umaru Yar’Adua revoking it.

While ruling on an oral application by the counsel for the plaintiffs, Chief Adegboyega Awomolo (SAN), to stop all parties from tampering with the contract pending the determination of the suit, Justice Kuewumi directed that neither the plaintiffs nor the Federal Government should access the accounts opened for the project pending the outcome of the suit.

The judge noted that the order was to preserve the main issue of the case. Defendants in the suit are the Attorney-General of the Federation (AGF), the National Economic Council (NEC), the Central Bank of Nigeria (CBN), Association of Local Government of Nigeria (ALGON) and Bank PHB.

The plaintiff is asking the court for an order setting aside the December 10, 2007 decision of the Federal Executive Council (FEC) revoking the contract, contending that the revocation was illegal and unconstitutional.

In the writ, the contractor is asking the court to declare that FEC in its decision revoking the contract acted in excess of the power given to it by the 1999 Constitution.

In a supporting 38-paragraph affidavit attached to the suit, the plaintiff said that the Federal Government was not a stakeholder within the conception of the contract.

The contractor claimed tha, ``NEC has no constitutional role to consider, interfere with or decide the fate of the contract between local government councils and the plaintiff.”

The plaintiff also asked the court to restrain the CBN and other defendants from giving effect to the December 10 directive of FEC as it relates to the contract.

It was further claimed that the project was designed to be contractor financed but payment to be made through instalmental deduction from allocation due to the local government council from the federation account monthly.

The project, according to the plaintiff, was 25 per cent completed when the administration of Yar'Adua wielded the big stick. While announcing the revocation of the contract last year, the CBN governor, Professor Chukwuma Soludo, had said, ``The National Economic Council agreed that the MOU between ALGON and Mathan should be terminated and that the outstanding balance in the accounts of BankPHB and the CBN that has not been deducted, be returned.”

Meanwhile, the Federal Government has filed an objection to the suit, asking the court to dismiss it. In the objection filed Mr. Aikhunegbe Malik, government argued that the court had no jurisdiction to entertain the case and that necessary conditions precedent to the commencement of the suit has not been fulfilled.

Malik, who appeared for the AGF said, ``the suit is premature and strips this court of jurisdiction. The reliefs being sought by the plaintiff in this suit are inchoate, incompetent and not maintainable in law.”

The matter has been adjourned till February 13 for the hearing government’s objection.