Governor Hope Uzodinma of Imo State has spoken out on the disagreement between the state government and Innoson Vehicle Manufacturing Company (IVM) on a debt of N2.5 billion.
The company last week said it sued the state government over a 2021 settlement, in which it got some vehicles and their parts on credit.
He said the value of debt with a dollar value of $3.8 million has now risen to about $6.3 million, noting that the value of money has depreciated by more than 40 percent.
The state Information Commissioner, Declan Emelumba, would later criticize the claim, saying that the company was covering up some facts and trying to blackmail the state government.
He accused the company of intentionally refusing to admit that the government had made some payments and that the amount claimed by the company was only a balance of the total cost of the vehicles purchased by the government.
“The truth is that the total value of the contract that we had with them reached more than N5 billion, of which we have paid N3.5 billion. So, they are talking about balance,” said Emelumba.
In his reaction on Monday, Cornel Osigwe, the company’s spokesman, insisted that the state government had not yet paid the 2.5 billion naira debt for the purchase of its vehicles and parts.
He accused the government of trying to “water down the facts and substance” of the allegation, saying the current debt is due to the company supplying another set of vehicles in 2021, a year after the first transaction.
Osigwe also denied that there was an agreement with the state government that the company would set up a service center in the state.
The spokesperson explained that although the company was servicing and maintaining the vehicles supplied to the state before, they decided to withdraw the services due to the state government failing to pay for “the servicing of used parts, which have risen to more than N7 million.” .
But speaking about the accusation, Mr Uzodinma, in a Facebook post on Friday, He insisted that there was an agreement for the company to set up a mobile technical workshop to service the supplied vehicles.
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The governor said the vehicles were purchased to combat growing insecurity in the state and that the government decided to sponsor Innoson Motors to promote local products.
He said that the state government had remitted more than N3 billion to the company and waited for the company to fulfill the agreement to set up a service center for the vehicles, but failed.
“Instead of fulfilling its obligations to the Imo state government and fulfilling the terms of said agreement, the IVM management embarked on an unfortunate public outcry to stir up sentiment in order to mislead unsuspecting Nigerians and defraud state taxpayers. of Imo,” Mr. Uzodinma said.
The governor said that more than 70 percent of the supplied vehicles have broken down and others are in various stages of deterioration as the company failed to set up a service center for the vehicles.
“I’m saying, as promised, come and do the (service) shop so we can fix the vehicles and at least get money back from them before we can pay more money,” the governor said. he said in a video clip that accompanied his Facebook post.
“I also come from the private sector. We don’t throw money away. We have to get value for money,” she added.
However, he expressed optimism that the issue would be “resolved amicably.”
Uzodinma, who said he was awaiting legal action, added that the government was also open to an out-of-court settlement with the company.