On Wednesday, the senate began an investigation into the alleged plan by the Ministry of Power, Works and Housing to secure the release of $350m domiciled in the Nigerian Sovereign Investment Authority to finance electricity projects.
The lawmakers specifically criticised the ministry for allegedly spending $35m out of the money on power projects without approval by the National Assembly.
The decision followed the adoption of a motion moved by Senator Dino Melaye (Kogi-West), at the plenary on Wednesday, which was entitled, ‘Monumental Fraud in the Power Sector.’
Granting a prayer of the motion, the Senate mandated its Senate committees on Power; and Public Accounts to invite the Minister of Power, Works and Housing, Babatunde Fashola (SAN), “to render a detailed account in terms of public funds spent on the Fast Power Projects (Afam Fast Power Project in particular); evidence of feasibility study indicating the viability of the projects; requisite appropriation by the National Assembly as required by the constitution; and the controversial presidential approval for the projects.”
Another prayer was also granted to mandate same committees “to investigate and consider summoning the Nigerian Sovereign Investment Authority, the Nigeria Electricity Bulk Trading Company, etc., to generally establish the status of the funds ($350m) and to report back to the Senate within two weeks.”
The Senate also unanimously granted the prayer to “direct the Federal Ministry of Power, Works and Housing to stop or suspend all attempts or efforts to pressurise the NSIA to release $350m meant for NBET to the ministry for use on the controversial fast power projects.”
The Senate President, Bukola Saraki, in his remarks, noted that the issues had previously been raised concerning the power sector in the chamber. He also noted that the law establishing the Nigerian Sovereign Investment Authority was due for a review.
Saraki’s suggestion on the review of the NSIA Establishment Act was presented as an additional prayer and it was unanimously granted.
In the motion, Melaye recalled that the Federal Government raised $1bn through a Eurobond issue in July 2013, while the government released $350m out of the sum to the Nigeria Electricity Bulk Trading Company Plc as shareholder contribution to shore up its capitalisation.
Melaye said, “The Senate observes that this fund has been with the NSlA since 2014 and has helped build market confidence especially among new investors in the electricity market who see NBET’s positive balance sheet as a form of security that their investments are safe and that NBET has the wherewithal to meet its payment obligations.
“The Senate is alarmed that there is now a desperate attempt by the Federal Ministry of Power, Works and Housing to retrieve this fund ($350m) and divert same to fund the so-called Fast Power Projects, which the ministry has already spent $35m of public funds not appropriated by the National Assembly.”
“The Senate is further alarmed that since the introduction of the Fast Power Project by the Federal Ministry of Power, Works and Housing, a total sum of $35m has been spent by the ministry on Afam Power Project alone to pay $29m to General Electric as cost for turbines and $6m in consultancy fees to other entities respectively, all without requisite feasibility study of the projects and appropriation by the National Assembly as required by the constitution.”
The senator said “a lot of questions are begging for answers” as regards the $29m paid to General Electric and the $6m paid to other consultants.
He asked who the consultants were and how were they procured. He also asked if there was observance of due process in the award of the contracts. He further asked why the transaction was cloaked in secrecy and what was the true value of Afam Fast Power?
Melaye added, “Why is the ministry engaging in constructing new power plant while the government has several idle plants that is seeking buyers for? Why is the ministry that is supposed to be making policies, dabbling into constructing new power plants that we have all agreed is better handled by the private sector?”
He added, “The Senate is concerned that the Federal Ministry of Power, Works and Housing is determined to persist in this brazen violation of the Constitution and extant laws on due process by insisting that the NSIA should release the $350m meant for NBET on the pretext of acting under a purported presidential approval.
“The Senate is convinced that there is an urgent need to bring the .ministry to order regarding its planned diversion of the sum of $350m meant for NBET and further demand a detailed account of unappropriated public funds spent on the controversial fast power projects.”
Seconding the motion, Senator Mohammed Hassan (Yobe-South) noted that apart from the $350m released to NBET, the Transmission Company of Nigeria also got $150m and the Nigerian National Petroleum Corporation got $500m for some gas projects.
He said, “These monies will be maturing and they will be due for return by next year. Our concern is on these contracts that were awarded; I think that is the area that the Senate should look at. I will want to recommend that the Senate Committee on Power should look at that, not only ascertaining the credit balance of the $350m, we need to find out what is the status of the $500m with NNPC and $150m with TCN. I think that is the way to go.”